Underemployment in Scotland

Sian Rasdale Employability, Skills and Lifelong Learning Analysis

Scottish Government

January 2013

ILO1 Definitions of Underemployment

Time based underemployment

They are available to start working longer hours within

the next 2 weeks

People aged 16 and over who are in work and willing

to work more hours..

Their weekly hours did not exceed 40 hours (if they are

under 18 years old)

Their weekly hours did not exceed 48 hours (if they are

aged 18 or over)

..in their current job at the same rate of

pay

..in an additional job

..in a different job with more hours

than in their current job

1 – International Labour Organisation

ILO1 Definitions of Underemployment Inadequate situations

underemployment (including skills based)

They are actively looking to change their work

situation or transform their current activities.

People aged 16 and over who wish to change their

work situation or transform their current activities or the

way they are carried out..

..because they feel inadequate or

insufficient use is made of their

occupational skills

.. because they feel they get do not get

an adequate income in the current job(s)

..because they feel they work excessive

hours in their current job(s)

This mode is harder to quantify as the required questions are not currently asked in the Labour Force Survey.

Other relevent measures

• Discouraged Workers

• Inactivity

• Temporary / Permanent employment

• Self employment

• Labour hoarding

International comparisons of underemployment, 2011

Source: Eurostat 1 – Proportion of economically active population (employed + unemployed)

6.3

5.6 5.4 5.3

4.7 4.4 4.3

4.0 4.0 3.7 3.6

3.2 3.1 3.1 3.1 2.9

2.5 2.4 2.3 2.3

1.9 1.8 1.8 1.8 1.6 1.6 1.5 1.4 1.4 1.3

0.8 0.8 0.5

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1.0

2.0

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6.0

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• Lack of consistent international data for the full time-based ILO underemployment definition.

• Other alternative measures are available , but incomplete.

Underemployment across the UK

Source: Labour Force Survey Jul-Sep datasets

11.3%

11.2%

10.8%

10.5%

10.5%

10.5%

10.4%

10.3%

10.2%

9.8%

9.7%

9.7%

6.1%

8.0%

7.2%

7.0%

7.6%

7.4%

6.5%

7.4%

7.4%

7.1%

6.8%

7.0%

6.7%

3.6%

0% 2% 4% 6% 8% 10% 12%

North East

South West

Yorkshire &…

East Midlands

North West

Merseyside

London

Scotland

West Midlands

South East

Wales

East of England

Northern Ireland

2009-2012average rate

2005-2008average rate

UK 2005 to 2008 average rate = 7.1%

UK 2009 to 2012 average rate = 10.2%

Underemployment across UK

Source: Labour Force Survey, Average from 2009 to 2012, July-September datasets

East Midlands

East of England

London

Merseyside

North East

North West

Northern Ireland

Scotland

South East 6.2%

Wales

West Midlands

Yorkshire & Humberside

6%

9%

12%

6% 9% 12%

Unemployment (UK Ave 8.2%)

Low unemployment High underemployment

High unemployment High underemployment

High unemployment Low underemployment

Underemployment (UK Ave 10.2%)

Low unemployment Low underemployment

Change in underemployment across UK

Source: Labour Force Survey, Averaged change (2005 to 2008) to (2009 to 2012), July-September datasets

East Midlands

East of England

London

Merseyside

North East

North West Northern Ireland Scotland

South East

South West

Wales

West Midlands

Yorkshire & Humberside

1.5

2.5

3.5

2.0 3.0 4.0

Change in unemployment rate

(%age point)

High increase in unemployment High increase in underemployment

Low increase in unemployment Low increase in underemployment

Low increase in unemployment High increase in underemployment

High increase in unemployment High increase in underemployment

High increase in unemployment Low increase in underemployment

Change in underemployment rate (%age point)

Low increase in unemployment Low increase in underemployment

Underemployment in Scotland

Underemployed workers

Scotland in 2012

264,000 The number of

underemployed workers in Scotland

10.7% The proportion of the

2.48 million workers that are underemployed

76,000 The number of extra

underemployed workers in Scotland since 2008

Source: Labour Force Survey , Jul-Sep datasets

3%

5%

7%

9%

11%

13%

15%

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

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Number of underemployed workers

Underemployment rate

20

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49%

51%

80% 20%

Which groups are driving the increase?

Average increase in underemployed

workers in Scotland

66% Permanent private sector

workers accounted for most of the increase in

underemployment

Females aged 25-49 This group is driving the increase in public sector

underemployment

16-34 year olds This group is driving the

increase in private sector underemployment

Source: Labour Force Survey, Average increase between (2005 to 2008) and (2009 to 2012), Jul-Sep datasets

0% 10% 20% 30% 40% 50% 60% 70%

Permanent

Not Permanent

Permanent

Not Permanent

Pri

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Increase in average underemployment level by sector, work patterns and job-type between

Jul-Sep 2005 to 2008 and Jul-Sep 2009 to 2012

Full-time Part-time

Almost three-quarters of this

group aged 25-49

About 60% of these groups aged 16-34

Underemployment across Scotland

Underemployed workers

across Scotland’s local authority areas during

Oct’11-Sep’12

13.6% The proportion of

workers in Dundee City and Shetland Islands

that are underemployed

30% The proportion of all

underemployed workers who live in Glasgow,

Edinburgh and Highland

Diverse Issues Dundee City has one of

lowest employment rates, while Shetland Island has one of the

highest, both have high underemployment rates

Source: Annual Population Survey, Oct’11-Sep’12

13.6%

9.9%

5.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

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Underemployment across Scotland

Source: Annual Population Survey, Oct’11-Sep’12

Aberdeen City

Aberdeenshire

Angus

Argyll & Bute

Clackmannanshire

Dumfries and Galloway Dundee City

East Ayrshire

East Dunbartonshire

East Lothian

East Renfrewshire

Edinburgh

Eilean Siar

Falkirk

Fife

Glasgow City

Highland

Inverclyde

Midlothian

Moray

North Ayrshire North

Lanarkshire

Orkney Islands

Perth & Kinross

Renfrewshire

Scottish Borders

Shetland Islands

South Ayrshire

South Lanarkshire

Stirling

West Dunbartonshire

West Lothian

2%

6%

10%

14%

4.0% 8.0% 12.0% 16.0%

Unemployment rate (Scot Ave 7.9%)

Low unemployment High underemployment

High unemployment High underemployment

High unemployment Low underemployment

Underemployment rate (Scot Ave 9.9%)

Low unemployment Low underemployment

Breakdown of underemployment rates in Scotland # 1

Based on the APS, during Oct’11-Sep’12 the underemployment rate was 9.9% (244,900

workers underemployed)

Underemployment rate for full-time workers

was 5.0% (89,600)

Underemployment rate for part-time workers was 22.6% (154,800)

Rates for part-time employees and self-

employed workers were similar (22.8% and 22.4%)

Rates for full-time employees and self-

employed workers were similar (5.1% and 4.8%)

Full-time public sector workers =

5.2% (24,500)

Full-time private sector workers =

4.9% (64,100)

Part-time public sector workers = 18.7% (35,000)

Part-time private sector workers = 24.1% (118,900)

Temporary part-time public sector workers = 28.6%

Permanent part-time public sector workers = 17.5%

Temporary part-time private sector workers = 39.0%

Permanent part-time private sector workers = 23.5%

Permanent full-time public sector workers =4.8%

Permanent full-time private sector workers = 4.9%

Breakdown of underemployment rates in Scotland #2 Based on the APS, during Oct’11-Sep’12 the

underemployment rate was 9.9% (244,900 workers underemployed)

Underemployment rate for male workers was

8.7% (111,900)

Underemployment rate for female workers was

11.3% (133,000)

Male workers aged

16-24= 22.0% (35,900)

Male workers aged

25-34= 9.3% (27,000)

Male workers aged

35-49= 6.5% (29,000)

Male workers aged

50-64= 5.2% (18,100)

Female workers aged 16-24= 22.5%

(34,100)

Female workers aged 25-34= 10.7%

(26,800)

Female workers aged 35-49= 10.8%

(47,300)

Female workers aged 50-64= 7.7%

(24.200)

Part-time = 32.6% (27,400)

Part-time = 22.6% (20,000)

Part-time = 18.4% (34,900)

Part-time = 14.4% (18,800)

Part-time = 40.4% (24,000)

Part-time = 43.9% (9,700)

Part-time = 40.8% (9,500)

Part-time = 18.7% (8,400)

High rates for part-time male workers NOT in full-time education - 65% for 16-24 year olds - 49% for 25-34 year olds

Skills Underemployment

Number of over-qualified and over-skilled staff

% staff reported as being over-qualified and over-skilled

UK

4,456,000

16%

England

3,762,000

16%

Northern Ireland

117,000

15%

Scotland

411,000

17%

Wales

165,000

14%

• Will always exist to some extent

• Difficult to measure, many facets.

• Limited evidence on the reasons – may be by choice or due to a lack of opportunities.

• Specific research into women returning to work after having children shows that some women ‘downgrade’ to obtain part-time work.

Source: UK Employer Skill Survey 2011, UKCES

The Employer perspective – Number of staff over qualified and over skilled, 2011

In-Work and Relative Poverty Trends, Scotland

Source: HBAI dataset, DWP.

6 per cent of people in Scotland were in in-work poverty (320,000 people).

In-work poverty trend has remained flat, between 6 and 8 per cent.

Gaps & Weaknesses in the Evidence

• Household level analysis – Context of welfare reform

• Limited evidence on “inadequate situations” underemployment – Complex and costly to collect

• International evidence is weak and methodologies inconsistent with ILO definition.

• Limited detailed time series data

• Underemployment increasing across all regions of the UK.

• Between 2008 - 2012 the number of underemployed workers in Scotland↑ 76,000

• In 2011 the UK underemployment was high compared to EU

• Wide variation in underemployment rates across LA areas.

• Almost half of all underemployed people in Scotland are working part-time in the private sector.

• Women are more likely to be underemployed than men (women more likely to work part-time).

• 65% of young males not in full-time education working part-time report themselves as underemployed.

Evidence Summary