Problem

Disguised unemployment

Other Names:
Hidden underemployment
Nature:

Measured unemployment rates tend to underestimate the true scale of the situation. Disguised unemployment is represented by discouraged workers and people involuntarily employed in part-time jobs. Predominant in this group are women and youths who do not enter the labour market.

Incidence:

[Industrialized countries] An OECD study estimated that more than 13 million people could be in disguised unemployment in Western industrialized nations and Japan by 1994. Japan and the USA account for nearly two-thirds of the 3.7 million discouraged workers recorded in the OECD in 1991. Involuntary part-time workers accounted for a further 9.7 million.

An example of how unemployment is disguised is that in 1982, the UK instituted a change in the criteria by which it compiled its unemployment statistics, since counting as unemployed those who are both out of work, seeking employment and claiming benefit. By deterring, disallowing or liberalizing the access of benefit of various categories of the labour force in a variety of subsequent moves, the change has progressively caused more than a million people either to claim benefit while not defining themselves as looking for work (e.g. on invalid support or other types of benefit), or to withdraw from the labour force altogether. Thus they have ceased to be counted as unemployed and are treated as resting.

 

Counter Claim:

Disguised unemployment is politically preferable to actual unemployment of workers.

Problem Type:
C: Cross-sectoral problems
Related UN Sustainable Development Goals:
GOAL 8: Decent Work and Economic GrowthGOAL 10: Reduced Inequality
Date of last update
16.04.2019 – 15:33 CEST