> I call Chris Mok, a top-ranked local TaskRabbit who earns up to $1,500 a week. Mok was laid off from his job as an art buyer at Macy’s (M) in 2009 and now spends most days, including weekends, on handyman assignments such as assembling Ikea furniture.
Sorry to say but there is no such thing as underemployment. Clearly there are less need for art buyers (or he wasn't good enough to do the job) than there were in 2009, so he has to do something else.
People grossly overuse (and abuse) the term unemployment like this.
First, an unemployment rate of 0% is bad. This is because not all unemployment is bad.
Frictional unemployment is actually a good thing (to a certain extent), because the alternative is having people stuck doing jobs they don't want when better jobs are available.
Structural unemployment is what happens when $old_industry dies because $disruptive_tech_company changes the market. It's definitely bad for the unemployed (who will never be re-employed in the same field), but it's usually the result of positive improvements to society at large. The 'solution' is that those people losing their jobs need to be retrained to work in another field, which is admittedly difficult, or retire.
Cyclical unemployment is undeniably bad. That's the result of boom-and-bust economies - people over-hiring during bubbles, and then having to lay off en masse when the market contracts. (The problem is largely that the people are being dumped into the jobs marketplace all at once, creating a glut, instead of being more evenly distributed).
The rest - someone who's employed but at a salary lower than what they'd like, or someone who retires because they're laid off... that's not unemployment. Someone may dislike it and they may think it's a 'problem' that needs to be 'fixed', but they need to realize that they're talking about something completely different from unemployment.
As for real unemployment, the ideal value is a point of debate amongst economists because it is tricky to measure, but somewhere in the ballpark of 5% is a commonly accepted value for the target 'natural rate' of unemployment.
That is, a sustained, unwavering value of 5% unemployment is actually the target for a healthy economy.
Please take the time to read through my comment, and you'll see that I address this - 'underemployment' is a misleading term that not only conflates several distinct concepts but also implies a connection with something that it's not.
It's like using the term 'intellectual property' when discussing the Pirate Party vs. MPAA. Aside from the fact that patents and copyrights are completely different legal concepts, the word 'property' already implies a right to ownership[1] that one side asserts doesn't exist to begin with.
[1] '...inalienable rights... Life, Liberty, and Property' - Declaration of Independence (first draft).
You forgot about unemployment because of bureaucracy and red tape making hiring way more costly than it could be. I.e. somebody might be able to contribute 50 Euro a week to the economy, but the overhead alone of employing somebody legally at all in a specific country might be higher than that.
There is such a thing as underemployment, but I don't think it means what the gp and you are claiming. Actually I think that like unemployment, there are 2 forms of it...
1. voluntary - a person is capable of doing a job, that job is available and fits into that person's life, but (s)he chooses to work at a less demanding job not utilizing his/her skills. I don't see this as a problem, personal choice is OK.
2. involuntary - this is a case where a person or workforce has capacity to produce more, get higher wages, or otherwise be "better" employed, but market inefficencies[1] prevent the best employment. Again, this may not be a problem for the individuals - they may not be bothered by this, but it is a valuable measure for opportunity. If a company can employ these people for $fewer than the going rate, but $more than they are making and gain profit, they should, because it helps overall market efficiency - it helps lower the cost of employees overall, and helps raise the wages of the people who provide value. Everyone wins. Just like finding new sources of any raw material in demand, or using previously "too expensive" sources because the market price has shifted.
For a real example: company A had a systems office in my town employing some pretty good graybeards. A decided that they didn't want/need to be in that business anymore, and closed the office. For the large part, the graybeards were happy in town, and chose to stay and not work at as well paying jobs, for reasons outside of salary. The thing is - systems graybeards are in demand and expensive (usually). For a while they were underemployed, not making the money they should. But company B heard of this, and realized that they could pay cost-of-living adjusted salaries that saved them a lot of money on a pool of systems people with a proven track record. They opened an office hiring most of the underemployed graybeards and everything was in balance again.
Of course that example is almost the text-book ideal case of how efficiencies, indicators, and such should play out. There are harder cases of this. Finding ways to take advantage of the underemployed metric is more difficult.
Anyway -- that is the long way around of saying: underemployment may not be a good or even valid measure at a personal level, but at an aggregate level it is a good measure of where efficiency can be sought. Disbelieving it speaks more of personal/political biases than of a market understanding - probably because it is term associated often with jobs programs and other things many dislike.
[1] Like algorithms, just because a perfect theoretical algorithm has an efficiency of $X, a given implementation my only be able to achieve $Y efficiency (where $X > $Y).
The national median household income is around 45k. The third quintile starts just under 35k. Are you really going to say that half of the US population is "underemployed"?
I don't think egypturnash or grueful are saying that; rather, they're questioning how many TaskRabbit workers come close to that.
Let's look at Chris Mok, mentioned in this article as a top-ranked TaskRabbit who makes "up to" $1500 a week, but a Reuter's article from February describes him as making about $3500/month, which works out to 42k per year[1], far far below that weekly "up to" number. And so when TaskRabbit's Leah Busque says people make "up to" 60k a year, my assumption is that most are making much less, especially when a "top ranked" guy appears to be about 18k below that.
I'd love to know mean and median figures, at the least, but haven't been able to turn them up—which doesn't do anything to alleviate skepticism about the "up to" numbers.
Obviously if someone can make even 20-30k from this in a market where they can't find anything else, then it's a good thing they've got TaskRabbit, but I wouldn't really call that enabling entrepreneurship in line with the TaskRabbit PR message.
Location also makes a huge difference; in San Francisco (where he lives), median household income is over $65k and the median rental price for a 1 bedroom apartment is over $2k. If Mok makes $3.5K / month, that probably qualifies as underemployment.
TaskRabbit: Distributed underemployment.