Traditional employment measures applied to the UK economy do not account for the phenomenon of ‘underemployment’, which refers to staff who want to work more hours than employers can offer.

Underemployment has surpassed the unemployment rate in recent years, according to a new labour market index. The rate of workers making do on the hours available rose to 9.9% in 2012 from 6.2% in 2008.

Designed by economists David Bell and David Blanchflower, the measure reveals that 30% of young people are affected by underemployment, the worst of any age group.

They suggest that employee demands for more hours is likely to be driven by the fall in real pay, as average wage increases are not rising in sync with the cost of living.

Bell and Blanchflower estimate that the number of employees working fewer hour than they’d like is equivalent to half a million unemployed.

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