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The Part-Time Jobs Crisis

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Posted on Apr 20, 2013
Mel R (CC BY-ND 2.0)

Americans stuck in part-time work take little comfort in news that the nation has added jobs for 30 consecutive months.

Since overall employment began to increase almost four years ago, “hiring has been concentrated in relatively low-wage service sectors, like retailing, home health care, and food preparation, and in contingent jobs at temporary-hiring companies,” The New York Times reports. At present, nearly one out of every 13 jobs is at a restaurant, bar or other food-service establishment, a record high.

Roughly 7.6 million Americans who want more hours are currently stuck in part-time positions. The figure hasn’t budged for a year, and is 3 million people higher than it was when the recession began at the end of 2007.

What’s more, these underemployed workers do not count toward the standard jobless rate of 7.6 percent. When included, the unemployment rate stands at 13.8 percent. “Today, 19.1 percent of workers say they usually work part time, defined as fewer than 35 hours a week, versus 16.9 percent when the recession started,” the Times says.

Part-time workers also generally earn less money per hour than their full-time counterparts.

“The only remaining legal form of discrimination in the labor market is against part-time workers,” said John Schmitt, senior economist at the liberal Center for Economic and Policy Research. “You can hire part-time workers and full-time workers doing the same job, and you’re allowed to pay them different money and different benefits.”

—Posted by Alexander Reed Kelly.

The New York Times:

There are multiple reasons for an increased reliance on part-timers, primarily continuing low demand and uncertainty about the economy.

“This job recovery has been more modest than previous cycles,” said Joseph A. LaVorgna, chief United States economist at Deutsche Bank in New York. “That, the corporate uncertainty and the recent financial crisis have caused a lot of companies to worry about access to financing. They want to hold extraordinary amounts of cash in this environment, and they’re reluctant to make a more permanent commitment to hiring or hiring someone full time.”

… Paul Dales, senior United States economist for Capital Economics, said, “There is another reason to believe that part-time employment will stay higher for longer, namely the incentives to employ part-time workers created by Obama’s health care reforms.”

Starting in 2014, employers that had an average of at least 50 full-time employees in the previous calendar year will have to provide health insurance or face penalties. Some companies and franchise locations, like Darden Restaurants, which operates brands like Red Lobster and Olive Garden, suggested last year that they might seek to limit full-time staff to avoid activating this mandate.

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