Underemployed is when people are working, but all of them are made to work less than their potential ____.

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The situation of underemployment, when people are working, but all of them are made to work less than their potential, is called disguised unemployment.
People who appear to be employed but are unemployed are said to be experiencing “disguised unemployment.” Another name for this situation is “hidden unemployment.” In this case, more individuals are working than is necessary. For example, in rural areas, this type of unemployment is generally found in the agricultural sector, where a family of 10 people is all engaged in the same agricultural plot. But if three people are withdrawn from it, there will be no reduction in output. So, these three people are disguisedly employed. This sort of unemployment is especially prevalent in the service industry in urban areas, such as when an entire family works together in a small business that a small team of people may run.

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