- Economic Growth:
- Underemployed workers have less disposable income, leading to less spending.
- This impacts aggregate demand and slows down economic growth.
- It hinders the transition of the workforce to more productive sectors.
- Productivity:
- Leads to lower overall productivity in the economy.
- Skills and potential of workers are not fully utilized.
- Rampant underemployment is a serious problem for productivity.
- It keeps wages low, perpetuating a cycle of low productivity.