Underemployment Among Asians in the United States

Asian Indian, Filipino, and Vietnamese Workers

Anna B. Madamba

• Publisher: Taylor & Francis
• Year: 1998
• eBook ISBN: 9781136744945
• Edition: 1
• Topic: Economics
• Subtopic: Labour Economics
• Index: Economics

Contrary to the stereotype which depicts them as economic successes, Asian workers have a high incidence of underemployment when compared to white workers. This book integrates immigration and labor market trends into an analysis of the economic assimilation of Asians in the U.S. It examines four forms of underemployment (unemployment, part-time employment, working poverty, and job mismatch) for Asian Indian, Filipino, and Vietnamese men and women. This study shows that Asian underemployment rates are consistently higher than for non-Hispanic whites, with Asian Indians having the highest rate. Each Asian group displayed varied effects of human capital, family and household, industry, and assimilation variables on the different underemployment categories. Important implications of the findings show that ethnic group variation in underemployment appears stronger than differences by gender. (Ph.D. dissertation, Pennsylvania State University, 1994; revised with new preface and index)

1

Introduction

The labor force integration of minorities in the United States has been at the forefront of economic assimilation research. Minorities are often disadvantaged in gaining access to jobs for which they are educationally qualified (Edwards 1979), earn less than their white counterparts (Chiswick 1986; Tienda and Lii 1987), and are more likely to suffer work discrimination (Edwards 1979). Studies document the economic disadvantage of minority groups, particularly of blacks and Hispanics in terms of underemployment (Lichter 1988) in general, and unemployment (Blau and Ferber 1992; Clogg and Sullivan 1983), working poverty (Gardner and Herz 1992), and job mismatch (Sicherman 1991) in particular.

Asians, like any other minority group in the United States, also are subjected to employment inadequacies. Their plight usually is of less concern since they are seen as economically better off than other minority groups. What is masked in this picture of the economic success of Asians may be issues of employment adequacy, where they may actually have to work longer hours or several jobs to be the economic successes that they are perceived to be. At the same time, this group is not homogenous and can exhibit varied employment experiences by national origin. This study integrates immigration trends and labor market situations into an analysis of the economic assimilation of Asians in the United States. It specifically examines the microlevel determinants of four forms of underemployment (unemployment, part-time work, working poverty, and job mismatch) for white, Indian, Filipino, and Vietnamese men and women in 1980 and 1990.

Background

Contemporary employment issues in the United States address three basic considerations: (1) the changing demographic composition of the workforce, (2) the worker’s social well-being, and (3) the shifts in the industrial make-up of the labor market. A study of labor underutilization among Asians in the United States touches on all of these.

First, the impact of changes in the demographic composition of the workforce on employment outcomes is partly attributed to the increase in the number of immigrants to the United States. Between 1965 and 1989, an average of 480 thousand legal immigrants entered the United States each year and of this number, roughly 60 percent were of labor force age (U.S. Naturalization and Immigration Service, various years). During this time period, an increasing proportion of immigrants have come from Asia . In fact, Asians comprise the fastest growing minority group in the United States. The 1980–90 growth rate of the Asian population in the United States was twenty times the rate of non-Hispanic whites, six times that of blacks, and double that of Hispanics (O’Hare and Felt 1991). Projections show that the Asian population of the United States is expected to increase from three million in 1980 to ten million in 2000, an annual increase of 2.4 percent in the proportion of the United States population that is Asian (Bouvier and Agresta 1987). This growth of the Asian population in the United States is anticipated to have an increasing impact on the general employment experience of workers in the United States because of labor competition, differences in human capital accumulation, and the interactive and interdisciplinary nature of work in recent times.

A second facet of the changing employment conditions in the recent past is the growing concern for the social well-being of workers. Current work conditions which include on-site day care, flexible work schedules, paternity and family leaves, and company-assisted spousal employment are all examples of this concern. This growing focus on the general well-being of the worker also is evident in the recent employment literature. In the past, employment research was purely economic, concerned primarily with the determinants of earnings, earnings differentials, unemployment, and the like. Deborah Klein (1973) suggested the need for a social welfare perspective to employment and manpower research, as the result of apprehensions brought about by the increasing poverty experienced not only by the unemployed but by working people as well. These raised concerns regarding the adequacy of employment income for day-to-day survival of certain groups of workers. Since about 90 percent of a household’s income is from salaries and wages (Grubb and Wilson 1989), employment outcomes have definite links to the social outcomes of workers and their families. Klein (1973) contends that a more accurate account of the “economic health of the nation” requires the use of other employment indicators that would tap conditions such as racial differences in employment, intermittent employment, and discouraged workers which are usually masked by standard (un)employment or labor force concepts. As minority workers continue to increase and comprise the majority of the labor force, assessing subemployment and labor underuse becomes increasingly important since minority groups are more predisposed to such conditions (Spring 1971).

Third, the participation of the United States in the global economy has brought changes to the industrial composition of the U.S. labor force. The most important impact of the global economy on the U.S. labor market is deindustrialization (Bluestone and Harrison 1982) in which manufacturing jobs are exported to other countries, and the U.S. economy shifts from being goods producing to service producing. This shift of focus has implications for the kind of skills required for jobs in the United States. One such effect is the increased educational qualifications required by jobs, partly through the incorporation of high technology (Noyelle 1987) in even the most simple jobs (e.g., secretarial work). Deindustrialization requires the re-education of the workforce in the United States to keep up to date with the technology boom in the workplace. Another implication of globalization is the exposure of foreign nationals to American culture, trade, and employment partly through mass media and contact with American companies that have exported their businesses and technology overseas. This exposure has significance for the possible migration decisions of foreign nationals, which in turn has an impact on the labor market situation in the United States.

The changing composition of the workforce with the addition of more women, youth, and minorities has implications for underemployment because these groups have historically been disadvantaged in the labor force (Hornbeck and Salamon 1991). Since these groups are more likely to be concentrated in the secondary labor market (Edwards 1979), an increase in their numbers means greater competition and falling wages. At the same time, the decline in manufacturing jobs and the increase in low-skill service jobs translate into unemployment for unskilled workers and low pay for service workers. The emphasis on re-education in response to the onset of high technology in the workplace means that the human capital skills needed to perform well in the labor force are now redefined (Block and Hirschorn 1987; Kanter 1990). This situation has implications for education-job or human capital-employment mismatch (Hölzer and Vroman 1992). Today’s structural labor market situation in the United States provides a fertile context for the growing importance of studying underemployment.

Significance

While most research on labor force underutilization in the United States has focused on the labor force in general, on whites, or on white-black differences, the increasing racial diversity of the United States offers a new population dynamic for underutilization research. Minority workers have long been identified with marginal work, as reflected in their disadvantaged status in earnings relative to whites (Chiswick 1986), time and work situations (Spring 1971), and access to good jobs (Edwards 1979; Piore 1979). The employment experiences of Asians in the United States provide an interesting innovation to the study of economic assimilation.

Often heralded as the “model minority” (O’Hare and Felt 1991) for their high educational attainment, native-like skills, and hard work, Asians in the United States still seem to be facing impediments that leave them lagging behind the majority white society in economic advancement. Masked by this popular stereotype is the ethnic diversity of the Asian immigrant population (Xenos et al., 1987). Despite the apparent “success” among certain Asian groups, other Asian groups do not have the human capital attributes that contribute to labor market success. Chiswick (1986) found that the mean years of education varied from a high of 17.1 for South Asians to 13.8 for Southeast Asians and that relative to whites, the Japanese had the least earnings differential among Asians, followed by Filipinos, Chinese, and Koreans. In other words, the Asian population in the United States provides a context for employment studies that is different from that of other native and immigrant ethnic minority populations. Lumped together under the label “Asian” are professionals and business entrepreneurs at one extreme, and laborers and service workers at the other. I investigate the range of variability in underemployment across these diverse ethnic groups.

Studying the underemployment experience of specific immigrant groups fills in a research gap by documenting the employment experiences of subpopulations for whom underemployment data were unavailable until the release of the 1980 and 1990 U.S. Census Public-Use Microdata files. Previous research on racial differentials in underemployment has concentrated on black-white differences, and more recently on Hispanic workers in the United States. The availability of data on Asians now allows the investigation of underemployment among a nationally representative sample of Asians in the United States.

Finally, this book documents the intergroup as well as intragroup differentials in the microlevel experience of underemployment by people of different Asian backgrounds. This focus may provide important policy implications by avoiding the fallacy of assuming that all Asian groups in the United States have homogenous economic assimilation experiences. By studying specific Asian groups instead of relying on aggregated Asian group estimates, research results and policy recommendations can be tailored to specific groups.

Theoretical Background and Conceptual Framework

The study of underemployment addresses a new segment in the sociology of work—employment quality and stability (Clogg 1979). Measurement of underemployment dates as far back as 1966 when the Wirtz Subunemployment Index was introduced. By 1978, a total of eight indexes of subemployment or underutilization had been proposed (see Sullivan 1978 for an overview of all eight). While the purposes for the indexes varied, they had three components in common: unemployment, involuntary part-time work, and inadequate income (Sullivan 1978). Philip Hauser formulated the Labor Force Utilization Index (later known as the Labor Utilization Framework or LUF) in the early 1970s.

The first formulation of the LUF covered five components of underutilization: unemployed, underutilized by low income, underutilized by low hours, mismatch, and adequately employed (Hauser 1974). Sullivan (1978) was the first to apply this framework to the U.S. labor force, and introduced innovations to the framework by way of operationalizations for income inadequacy and mismatch. In 1979, Clogg adapted the Sullivan version of the framework, with modifications in the measurement of the income adequacy variable and adding the subunemployed (discouraged workers) as the sixth component to the framework. Clogg and Sullivan (1983) added improvements to the measurement of inadequate income and mismatch by using the 1.25 × poverty threshold figure as the standard cutoff point for measuring income inadequacy and using only individuals who have completed at least twelve years of schooling as a new condition for mismatch.

Further improvements were made to the LUF by Clogg, Sullivan, and Mutchler (1986) based on modifications proposed by Tipps and Gordon (1985). The existing six-component underutilization framework was modified to eleven categories to include subcategories of unemployment and part-time work that reflect specific reasons for these two categories. This reflects an expansion of the original six-category LUF, where there are data to support such; however, the original major LUF categories have remained intact and are the ones used in this study.

Results from previous studies reveal that underemployment has increased over the years (Clogg and Sullivan 1983). The economic forms of underemployment (unemployment, involuntary part-time employment, and working with low income) were more prevalent among women and the young. Job mismatch was more likely among men. The gap in underemployment rates of blacks and whites widened in a twelve-year span regardless of age group, education, or temporal macroeconomic shifts (Lichter 1988). In general, a greater likelihood of unemployment is observed for minority groups compared to whites, with blacks and Hispanics also more likely than whites to be working poor (Blau and Ferber 1992; Gardner and Herz 1992). The discussion above shows how underemployment is potentially determined by a number of factors, as it is experienced differently by age, gender, race, and ethnic group; education and skills; and industry and occupation. I analyze these determinants and discuss how they relate to underemployment.

Human Capital

The human capital theory views the acquisition of skills and knowledge as investments of resources on people for future economic payoffs (Becker 1962). Such skills and knowledge are supposed to increase worker productivity, thereby justifying the costs incurred in acquiring them (Salamon 1991). Given this perspective, schooling, on-the-job training, medical care, and anything that affects the productive capacities of the workforce can be considered forms of human capital (Becker 1962; Salamon 1991). Therefore, possession of anything that enhances worker productivity is expected to be translated into socioeconomic rewards. Under the human capital perspective, underemployment is viewed as a result of fewer investments in the type of skills and knowledge mentioned above.

Whether it is because of its productivity-enhancing effects or its screening/signaling function, additional education is expected to generate a corresponding increase in earnings (Blau and Ferber 1992). However, variations in returns to education by gender (Blau and Ferber 1992; Reskin and Padavic 1994), race (Chiswick 1991; Nelson 1988), and immigrant status (Chiswick 1983) are incongruous findings with human capital theory. Others find that English language capability can discount the effects of education on socioeconomic rewards (Chiswick 1991; Kossoudji 1988; McManus, Gould, and Welch 1983). Under the human capital theory, highly educated Asians are not expected to suffer as much from economic underemployment as they are from mismatch, where the major criterion is high educational background.

While whites have the highest returns to human capital characteristics among ethnic groups in the United States, Asians also show favorable returns to human capital characteristics but at rates lower than those of whites (Miller 1992). This can be attributed to the increasing immigration of highly skilled and well-educated Asians in the 1970s (Chiswick 1986) relative to other immigrant groups. In fact, non-Hispanic white, black, and Asian immigrants were more likely than their native-born counterparts to have completed four years of college or more (Meisenheimer 1992). This overachievement in educational attainment has been identified as being responsible for Asian Americans approaching socioeconomic parity with whites (Hirschman and Wong 1984). The Japanese, Indians, and Chinese are among the most economically settled of the Asian groups in the United States (Chiswick 1983; Nelson 1988). The Vietnamese are the least advantaged by virtue of their lower human capital investments rather than the recency of their migration (Nelson 1988).

Demographic processes and changing labor markets are expected to alter the influence of human capital investments on labor market status. Technological advancement, expanded international competition, changing economic structure, and increased pressure for productivity improvements are demand-side factors that can affect the influence of human capital investment on labor market status. On the other hand, the baby boomers’ overload of retirement systems, the corresponding birth dearth leading to an overburdened dependency ratio, and the changing workforce composition of mostly minorities, women, and immigrants are demographic challenges affecting the supply side of human capital investment (Reskin and Padavic 1994; Salamon 1991). Given the above, the observed growth in the number of college graduates plus the economy’s inability to absorb them has reduced the returns to education in general, and increased the potential for a mismatch between the labor demanded by industry and the labor supplied by educational institutions (Salamon 1991).

Family and Household Structure

Changing trends in marriage, fertility, life expectancy, and labor force participation have altered the labor market situation for today’s workers. Increasing divorce rates, the rise in female-headed households, increased female labor force participation, as well as delayed childbearing have all contributed to a workplace situation where workers, especially women, are faced with conditions necessitating employment (as in single-parent households), but hampered by these same conditions from pursuing employment (as in care for young children). As a result, they face a conflict between work and family re-sponsibilities that is often addressed through modified work practices (shift work, flexible time, part-time work, and other solutions) or at the expense of family life. This conflict between work and family responsibilities is critical in the study of underemployment. Family and household situations can influence not only labor force participation but also the availability and desirability of jobs.

Child care may be the most important component in this work-family quandry. Increased opportunities for women brought about by the growth in the service sector (Presser 1989), as well as men’s declining labor market position (Wilkie 1991), have made participation in the labor force an attractive option for women—born either out of choice and ambition, or need and survival. In fact, female labor force participation grew over 30 percent between 1940 and 1990, including half of married women with young children (Blau and Ferber 1992). This figure implies that demand for child care is expected to be huge as more mothers join the workforce. The availability of institutional and noninstitutional child care will determine whether women join the labor force. In spite of the general trend of increasing labor force participation among women, the presence of young children (Blau and Ferber 1992) and the inavailability of satisfactory child care (Blau and Robins 1989) remain a deterrent for a number of women from joining the workforce. Other women compromise by working only part-time (Blau and Ferber 1992), ...

Table of contents

• Cover
• Series Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of Tables
• List of Figures
• Foreword
• Preface
• Half Title
• Chapter 1 Introduction
• Chapter 2 Asian Immigration to the United States
• Chapter 3 Data and Methods
• Chapter 4 A Descriptive Profile of Asian Underemployment in the United States
• Chapter 5 Determinants of Asian Labor Force Participation
• Chapter 6 Determinants of Asian Underemployment
• Chapter 7 The Underemployment of Asian Workers: Concluding Thoughts
• Bibliography
• Index