Being Unemployed vs. Being Underemployed: Which is worse? Here are some lessons I’ve learned from both situations.

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Which one sounds more frustrating? Not being able to get a job, or having a job that doesn’t pay what you think you are worth and hinders your career development?

The US unemployment rate edged down to 6.2 percent in February 2021, the lowest rate since April’s record high of 14.8 percent and below market expectations of 6.3 percent. Still, the jobless rate remained well above pre-pandemic levels. The number of unemployed people fell by 158 thousand to 9.97 million, dropping below the 10 million mark for the first time since March 2020, while the number of employed rose by 208 thousand to 150.24 million. The labor force participation rate, however, was unchanged at 61.4 percent, 1.9 percentage points lower than the value a year earlier; while the employment rate was up to 57.6 percent from 57.5 in January.

Searching for a job itself can be a frustrating process, with applicants firing out hundreds of resumes and personalized cover letters, but barely getting a few responses back. This becomes soul crushing when no companies will give you the time of day since there are too many applications for too little positions. On the other hand, it may also be discouraging for a person to be underemployed, because they are forced to work below their abilities and qualifications or have reduced amount of hours.

There may be many reasons that someone is underemployed: Mismatch of skills, a lack of experience, not enough credentials, low demand, or a poor economy. Although the above data may signal that the economy is recovering, it does not include data of people that may be underemployed because it is hard to fully measure.

Underemployment handicaps workers, because it is hard to escape. Time and energy is allocated to a job that leaves little time for a person to grow their skillset and obtain a better opportunity. This becomes a problem in the long run because then employers may start cutting hours and workers lose their bargaining power.

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