Underemployment Rate and Its Impact on Job Satisfaction


According to, underemployment is a situation in which workers are employed below their educational skills or ability. There are three types of underemployed workers, including skilled employees in low-paying jobs, skilled employees in low-skill jobs, and part-time workers preferring full-time hours.

In most cases, the causes of underemployment has been attributed to adverse economic conditions. For example, recession that occurs when there is decline in economic activity. It can also be caused by workers supply that is greater than the demand. Thus, the high recession, unequal supply and demand, layoffs, as well as technological changes often displace workers which will cause to underemployment. Moreover, these reasons also lead to employees who want to find a new job have to accept low-paying, low-skilled position, or part-time work to earn some pocket money.

A study conducted by Guntur Sugiyarto on underemployment shows that mismatch employed workers shares of 23 percent and 33 percent of total workers. It is the same as 21.3 million workers suffer from underemployment. Additionally, this issue cannot be ignored because underemployment can cause a huge bad impact on job satisfaction as well as employee’s personal life.

The effects of underemployment is just the same as to those who are unemployed. Usually, underemployed workers will perform poor in their workforce as they are not satisfied with their job position. A working study on “underemployment and its impact on job satisfaction” which focused in Australian part-time employment shows that “ underemployed are less satisfied than those who report no working hour mismatch between actual and desired hours.” Likewise, underemployment will also cause higher poverty levels and employees lose their ability to update their skills.

The Society for the Psychological Study of Social Issues has also listed some of impact employees will get caused by underemployment, including:

  • Poorer mental health

It is said that people who are employed at stable jobs have better mental health than those underemployed. It has to do with stress and anxiety that comes with being unable to make ends meet or too much work that mismatch their skills.

  • Relationship stress

Relationship will suffer as a result of underemployment. In line with mental health, when underemployed staff cannot deal with the feeling of anxiety and stress, it will eventually affect how they treat others. They can also have a profound impact on relationship with jobs, co-workers, or even family.

  • Physical health issues

It is found that there are links between reduced life expectancy and underemployment which later will result on individual’s physical health such as dizziness, stroke, or any other illness. Additionally, alcoholism and other addictive behaviours can result from these situations as you try to self-medicate.  

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