Coping with Chronic Underemployment

This economic cycle is quite different from previous.  In previous times, employment prospects would have picked up at this point in the business cycle.  What struck me about the most recent employment report was the high and persistent rate of long-term unemployed and long-term underemployed. (See graph to the left, from Calculated Risk).  In fact, several of my friends are in the latter category that I call the chronic underemployed.  One person Danielle, has been working part-time (equivalent of 3 days per week) for three years.  Originally, when offered the chance to switch to part-time, and probably avoid a layoff, Danielle thought the situation would be temporary, and she would resume full hours after a few months.  Fortunately, the part-time job helps to pay a few bills and to keep her skills relatively sharp.  However, coping with being part-time employed when she desires to be full-time is difficult.  Here are some things that Danielle does to keep her optimism up:

–She continuously looks for opportunities to increase her hours at her current company – obviously Danielle has been placed on part-time status due to relatively poor revenue at her company, however, the best place to leverage your skills is usually your existing place.  Last year, Danielle was able to pick up more work temporarily when her colleague was on medical leave.

–Danielle continues to network and keep up with business associates — Danielle continues with her membership in a professional association that meets once a month.  The association is a good place for networking, keeping up with industry trends, and socializing.  When unemployed and underemployed, it’s important not to add isolation to your list of woes.

–She revised her budget so that she is not spending down savings — In the first 3 months after moving to part-time, Danielle had not re-adjusted her budget, believing that she would quickly shift back to her old salary levels.  However, after 3 months, she recognized that the part-time basis may be longer-term, she took a hard look at her budget and revised a number of things. Although she is taking in less cash, and saving and investing less, at least she is not burning through her savings or piling on credit card debt and the associated stress of being heavily in debt.

–Danielle has tried out a few freelance opportunities — more to try to build leads on to other opportunities and experiment with alternative streams of income than to earn a lot of cash.  Although the freelance opportunities have not been very lucrative, they are helping to build her resume.

–She has used some of her free-time to cultivate hobbies she loves — Danielle has always been highly creative, she has been quilting in her spare time and has found other quilters to share her passion.

an Editor’s Pick at this week’s Carnival of Personal Finance