How does underemployment influence economic indicators such as GDP, and what correlation can be drawn between the two in terms of overall economic health?

Underemployment happens when people have jobs that do not use their skills fully or when they work fewer hours than they want. This situation can lead to lower economic output, which affects the Gross Domestic Product (GDP). GDP measures the total value of goods and services produced in a country, so if many people are underemployed, fewer goods and services are created, which can lower GDP. For example, if a skilled engineer works part-time as a cashier, their skills are not being used effectively, leading to less overall production. Therefore, a high level of underemployment often signals economic weakness, as it shows that the economy is not fully utilizing its workforce.