Inadequate employment or employment-related hardship, such as employment that is less than full-time (including unemployment) and/or is inadequate with respect to training or economic returns (Lichter and Constanzo, 1987). Economic underemployment includes discouraged, unemployed, part-time for economic reasons, and working poor workers.
Who Are Underemployed
Nonmetropolitan areas are characterized by higher rates of underemployment than metropolitan areas. The most prevalent types of economic underemployment in rural areas are working poor and unemployed. A complex set of factors influence underemployment and include individual, family, structural and spatial characteristics. Underemployment directly affects the economic resources of many rural families and can disrupt family interaction processes, leading to increased stress and loss of community ties.
Level of underemployment in the U.S. in 1990 was about 22 percent of the civilian labor force. About 13 percent of the civilian labor force were economically underemployed. Although the level of economic underemployment in rural areas in 1990 decreased compared to its level in 1980 (Lichter and Constanzo, 1987), it remained slightly higher than that of metropolitan areas. About 13 percent of nonmetropolitan workers in 1990 were economically underemployed compared to 12 percent in metropolitan areas. In rural areas, four out of 10 full-time workers in rural areas in 1987 earned below poverty wages (Deavers and Hoppe, 1992). On farms, three out of four workers had poverty earnings (Gorham, 1992).
Women workers in nonmetropolitan areas are more likely to experience economic underemployment than their metropolitan counterparts. They are more likely than men to work part-time in absence of fulltime jobs. Among those underemployed, men are more likely than women to be unemployed and work for poverty wages. Younger workers (less than 25 years of age) are more susceptible to unemployment than those aged 25 or more. In contrast, workers aged 25 and over are more likely than younger workers to be underemployed due to low income. Nonmetropolitan non-White residents are more likely than Whites to be unemployed, to work for poverty wages, or to work part-time in absence of full-time jobs.
Agriculture and extractive industries in rural areas have higher proportions of underemployed workers than manufacturing and service industries, particularly workers earning below poverty wages. In manufacturing industries, most underemployed workers are working poor and unemployed. In service industries, the working poor and part-time for economic reasons workers are the most frequent categories of underemployment.
The South is more likely to experience greater underemployment compared to other regions. The South has higher levels of unemployment and working poor rates compared to other regions. The Northeast has a lower rate of economic underemployment. The West and Northeast have a higher level of underemployment by occupational mismatch. The essential questions remain, Why is underemployment so prevalent in nonmetropolitan areas? and What social, economic, political and other factors have contributed to its higher levels in rural areas?
What Explains Underemployment
Research on rural underemployment examined the demographic, industrial and occupational positions of underemployed workers focusing on workers‘ characteristics, thus neglecting structural, institutional and organizational bases of underemployment. The challenge is to integrate individual, family, structural and spatial variations with multi-level analytical approaches to explain the social, economic organization, and spatial aspects of underemployment.
Determinants of rural underemployment include a limited opportunity structure which is the outcome of both past social and economic development policies and current economic transformation. Many rural areas lack stable employment, opportunities for upward mobility, investment in local communities, and diversity in the economy and other social institutions. Moreover, levels of underemployment are shaped by family organizations and individual characteristics. Finally, they are exacerbated by the fact that rural areas are increasingly socially and spatially isolated and particularly vulnerable to adverse effects from structural economic change.
Personal attributes and qualifications, such as age, skills and education, and work history, are important in that they represent investments in skills enhancement that are rewarded in the marketplace. Job skills and education are more poorly rewarded in rural areas with underemployment at each level of education higher in nonmetropolitan areas. These educational disadvantages are considerably higher among women and minorities (Swanson, 1988). Rural workers suffer deficits in education, cognitive skills and work experience.
Differences in earnings returns to education and workplace experience account for the largest portion of metropolitan-nonmetropolitan differences in earnings (McLaughlin and Perman, 1991). Although individual characteristics, especially educational factors, determine who receives low-paying or part-time jobs, as opposed to adequate employment, these characteristics alone cannot explain the persistent high poverty, unemployment and underemployment in rural areas or explain the poor rewards and persistent wage differentials in rural areas, especially among women and minorities (Lichter et al., 1993). The low skills and education of rural workers do not attract high-skilled jobs, so employment growth and industrial restructuring are not likely to benefit rural workers. Underemployment results from both skills gaps between rural workers and available jobs, and from a lack of good jobs available to rural workers.
Underemployment varies by demographic structure (age, sex and race) and by demographic processes, particularly life course, family structure, birth cohort and migration. Also, the demographic composition of the labor force has changed substantially since World War II. Metropolitan and nonmetropolitan differences in underemployment in part reflect differences in demographic composition by age, sex and race of their workforces.
Wages and employment are the main economic reasons for migration from nonmetropolitan areas. Those with higher human capital levels tend to migrate. Yet, many who remain in nonmetropolitan areas have higher education and continue to experience negative returns on their human capital investment. This implies that there are non-economic factors that influence the decision to migrate such that local communities provide residents with feelings of security and stability, along with strong ties to family and friends.
Poverty and Underemployment
Demographic evidence of poverty, unemployment and underemployment, especially in urban areas, shaped the debate about persistent poverty and its relationship to family structure and policy, especially welfare. The popular perception is that the poor in the U.S. are Black, urban, underclass and female-headed households. Poverty in female-headed households, especially for children, is much higher and lasts longer than that in married-couple households. Yet, changes in family structure have less causal influence on poverty than is commonly thought. In rural areas, traits often associated with families of urban poor—female-headed households, marginal parental attachment to workforce, and welfare dependency—are less in evidence (Lichter and Eggebeen, 1992). But, poverty in femaleheaded households is increasing in rural areas and the growing problem of rural poverty cannot be disassociated completely from changing family structure (Duncan and Tickamyer, 1988).
Childhood poverty and deep poverty both remain prevalent, especially in nonmetropolitan areas. Increasing rates of child poverty attributable to higher prevalence of female-headed households more than offset the economic improvements attributable to increases in female employment, rising levels of parental education and family size. Black children continuously living in two-parent families were as likely to experience poverty as White children who always lived in female-headed households.
Economic Organization and Underemployment
Underemployment is a structural problem that cannot be understood by reference to individual characteristics alone. The economic organization perspective or new structural perspective focuses on the nature of opportunities within the work place, including the quantity and quality of employment, but mainly the organization of work. Large work organizations offer higher wage rates. The relatively low earnings of rural workers is due in part to the disproportionate share of small firms in rural areas. The paternalistic organization of rural work may provide benefits such as personal loans for home improvements, automobile purchases, or to meet sudden financial crises. However, while paternalism implies commitment to reciprocal social relations between employers and loyal employees, the structure of interpersonal relationships involves unequal exchanges (Doeringer, 1984). Workers who quit their jobs generally have difficulty finding reemployment in the area because quitting is seen as evidence of a disloyal and unreliable worker. Opportunities for informal employment in rural areas offer low-wage jobs and are supplements for other sources of income. Low levels of remuneration for most informal work results because the products of such work are sold in highly competitive markets marked by uncertain demand.
Rural occupations have lower earnings potential. Farmers, for example, have one of the lowest earnings potentials as do rural services and semi-skilled manual jobs (Spenner et al., 1982). Thus, the persistence of rural poverty seems partially due to the prevalence of career lines in rural areas with limited earnings potential. For rural workers employed either in farm or service occupations, the option to switch careers in order to improve their earnings potential becomes more limited as they get older. The high poverty of many rural workers results from limitations in the earnings potential and exit portals of their career lines (Bloomquist et al., 1993).
The increased informalization in work is a strategy to reduce labor costs, not only in terms of wages but also in terms of benefit packages, maintenance of health and safety standards and other production costs related to the state regulation of economic organizations. Few analysts of informal activities, except Gringeri (1994), focused on rural social contexts in the U.S. or the resurgence of homework. Homework usually is paid by the piece or unit of production rather than labor- time, and offers limited if any fringe benefits or job security.
Studies of spatial division of labor focus on competitive advantages of different-sized places for the location of particular sustenance activities or industries. The advantages of rural areas from an ecological perspective are the relatively low cost for land and cheap labor availability, and access to natural resources and rural amenities (Bloomquist et al., 1993). Generally, rural areas serve as sites for routine, low-skilled work activities. Also, within most industries, routine production is located in rural areas while managerial and professional- technical jobs are concentrated in large metropolitan areas. The increase in rural working poor is related to these routine production jobs that pay low wages.
New industries attracted by rural areas‘ low labor costs and non-unions bring new jobs with low wages in peripheral and secondary sectors (Tickamyer, 1992). Few of these industries greatly assisted local economic growth and major financial transactions. In the rare case of industries that require higher skills and better paid jobs, they are usually performed by outside workers. Also, many rural plants quickly relocate operations in search of cheaper labor. Despite the fact that industrial growth in rural areas, particularly in depressed areas, improves the number of employment opportunities and the distribution of income across different groups, levels of underemployment may remain high. New jobs in peripheral industries and the secondary sector may create new forms of working poor (Tickamyer and Duncan, 1990).
Gender and Underemployment
Feminist perspectives note that women’s economic opportunities are conditioned and shaped by their disadvantages in the wage labor market; by their high participation level in informal and unpaid labor, both productive and reproductive; and by state policies toward women, work and welfare (Tickamyer et al., 1993). Gender plays a central role in enabling, sustaining and integrating both relations of production and reproduction in a couple of ways. First, without women’s domestic labor in social reproduction, waged labor geared toward production could never take place. Second, women engaged in waged labor are exploited not only as members of a particular class, but also as women. Rural women increasingly join the paid labor force. Yet, rural women have higher levels of underemployment than their urban counterparts. Underemployment among rural women has been a significant aspect of employment-related hardship in nonmetropolitan areas during the post-1970s period. One of every three rural female workers today experience some form of economic distress (Lichter, 1989). Women are less likely than men to become or stay adequately employed, a gender effect that cannot be explained by gender differences in human capital, job characteristics or spatial location (Lichter and Landry, 1991). Jobless and low wages are the greatest barriers for females seeking an adequate job. Overall, women are especially vulnerable to tight labor markets and limited opportunities (Tickamyer, 1992).
In formal employment, women tend to be concentrated in secondary occupations and peripheral industries with low wages and less prestige. Despite the increase in women’s participation in the non-agricultural labor market, sex segregation has increased in rural communities. Women have much more limited employment opportunities and flatter earnings curves in areas dominated by agriculture and mining (Tickamyer and Bokemeier 1988). Women’s wages and incomes are often the resources that sustain both family and farm in times of severe economic need. Yet family ties are more likely to constrain women than men; men are more likely to change jobs in order to improve their employment situation while women are more likely to change employment for reasons related to marriage, family or personal circumstances (Tickamyer and Bokemeier, 1989).
Women have always contributed to the survival of the family through paid and unpaid work in and out of the home. Rural women spend much time in domestic work, with major responsibility for child rearing and household chores, in work on farms and in gardens, and in other activities to sustain their families. Women’s work both in the informal economy and households limit their opportunities to generate income, especially through jobs in the formal sector. Within many rural areas in the U.S., exploitative informalization has resulted in the development of unregulated enterprises and home-based industries targeted specifically to women (Gringeri, 1994).
The most commonly used indicator of economic hardship and employment marginality in prior research of labor market conditions has been the official unemployment rate. Yet the unemployment rate ignores workers who are marginally employed because it measures job seeking rather than true joblessness or job inadequacy. Underemployment indicators as developed by Clogg and Sullivan (1983) in the Labor Utilization Framework include six components: 1) Not in Labor Force; 2) Subunemployed; discouraged workers who are: a) persons not currently working because unable to find work, and b) part-year workers who are currently out of the labor force but looking for full-time work; 3) Unemployed, includes: a) persons without work but who are seeking employment, and b) employed persons in the process of job transition or layoff; 4) Underemployed by Low Hours, the involuntary part-time and officially part-time for economic reasons who are working less than 35 hours a week, but who desire a fulltime job; 5) Underemployment by Low Income, the working poor including those with earnings less than 1.25 times the individual poverty threshold; 6) Underemployed by Occupational Mismatch, refers to the overeducated, and workers whose completed schooling exceeds the educational level typical of persons holding a similar occupation; and 7) Adequately Employed Workers who are employed but not in any of the preceding categories. Voluntarily part-time workers are included among the adequately employed. The sum of categories 2, 3, 4 and 5 provides a composite measure of economic underemployment because of its direct link with individual labor-market earnings (Lichter and Constanzo, 1987).
Underemployed individuals are affected by changes in their economic resources and feeling about changes or losses of their jobs. For families, when a spouse is underemployed, both spouses may experience trouble in their communication, increasing conflicts and stress. Families adapt various employment strategies by seeking more than one job, increasing the number of earners, having irregular jobs, spending additional time in working activities, or opting for informal activities, both legal and illegal, for their survival. Family adaptive strategies require close-knit kinship and community structure based on solidarity.
— Janet L. Bokemeier and Jean Kayitsinga
- Division of Household Labor; Employment; Home-based Work; Income; Labor Force; Migrant Agricultural Workers; Policy, Rural Development; Policy, Socioeconomic; Poverty; Quality of Life; Social Class; Work; Welfare
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