Th2.1: Under-employment

Question 1

Who are the underemployed?

Answer 1

• those who are in part time or zero hour contracts when they would prefer to be full time
• the self-employed that would rather be employees
• people in jobs which do not reflect their skill level

Question 2

Why does underemployment tend to increase during recessions?

Answer 2

firms will just reduce staff hours instead of making them redundant and having to pay expensive redundancies packages

Question 3

What does reducing staff work hours lead to?

Answer 3

the underemployed having lower incomes, therefore spending less - reducing AD and growth of the economy