Part-time work is a part of the economy. A first job might be just a few hours after school, and parents often find themselves only able to work while the kids are in school. Some people want only part-time work while they get their “real career” together, such as an artist who waits tables to pay the bills. But in an economic downturn, people get stuck with fewer hours than they want and the ranks swell.
When we discussed the employment figures released by the Bureau of Labor Statistics (BLS) here in Barataria, the “Part Time for Economic Reasons” really stuck in the craw of many readers, and for good reasons. That number has to come down from 5.3% of all employed persons before we can be excited about the jobs reports. The San Francisco Federal Reserve had the same feeling, and has released a new report with some fascinating details on part-time work in the US and what it is today.
Hospitality workers often don’t have the hours they want
The current share of part-time workers appears to be at an all-time high, stubbornly stuck at around 19.6% since the last official recession hit in 2008. The first thing analyzed by the authors of the report, Valetta and Bengali, is how that really compares historically. The methods for gathering data on this changed in 1994, but with a few tweaks they were able to find that part-time workers are actually a smaller share than we saw just after the recession of 1981 – and that it always peaks during a recession, slowing winding down in the years after.
What’s remarkable right now is not so much the level of part-time employment, but how stubbornly high it has remained. This is consistent with other patterns such as long-term unemployment seen since the bottom in 2010.
While that 19.6% of the labor force in part-time work may seem like an awful lot, most of the people at these jobs like it that way. As noted before, those who are forced to have fewer than 40 hours are only 5.3% of the workforce currently, down from 5.8% at the start of the year. The rest have something else going on in their lives and are living off fewer hours of work by choice. This is a number worth watching. But how did people get stuck with less work than they want?
Chart from the San Francisco Fed
The real meat of this report by the SF Fed is shown in the chart here. Of the 5.3% of the workforce that has fewer hours than they want, 3.5% had their employer reduce the hours and 1.8% could only land a part-time job. Those numbers are significant enough to warrant separate analysis.
Those who had their hours cut spiked to 5.1% in 2009, but has fallen back substantially since then. In historic terms, today’s figure is still high by any measure – roughly at the same level following the 1981 recession. Progress has been made, yes, but employees that had their hours chopped are still not getting them back after all these years.
Employees who can only find part-time work, however, are if anything at a historic low following a recession. It’s still not as good as the 0.8% stuck in this bind in 2000, but it’s far from a trend worth worrying about. The level is stable and while not consistent with a strong recovery it’s far from the most serious problem. The common canard about this recovery from people who want to downplay it, that the only jobs being created are part-time, can’t possibly be correct. Given that part-time by choice is stable or dropping, the jobs created so far must be predominantly a full 40 hours.
Big companies have been slow to hire, slow to increase hours
What does this tell us about the nature of work today? The real lingering problem for people with too few hours is that those who had their work cut aren’t getting the hours back quickly. That’s consistent with the lack of hiring by big companies versus small companies, too, in that cut hours are probably more of a feature of a larger operation with a substantial workforce.
What we see is, once again, an economy that is struggling to restructure as the old ways people made a living are not rebounding. New jobs are at full hours, but the old jobs are the ones lagging. That probably won’t change until there are new jobs created for those who had their hours cut and they simply get up and leave. For now, that’s not really an option. We have to keep watching job growth at small companies to see when the employment picture turns a corner on the Part Time for Economic Reasons figure.
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Great post, I was wondering about this. A lot of my friends have part time work but they all seem to be by choice. I think that is true for most people and I can see why. If you can make enough to live and still enjoy life than why keep working? A lot of people set their own hours as consultants these days, too, I wonder how that counts?
Consultants are a good question – what is “full time” to people working the 990? I don’t know. But yes, it seems that 3:1 people work PT because they want to. I find that interesting. The 40 hour workweek is a bit artificial.
This is why this is the only blog I read. Excellent analysis and summary.
Thank you very much! I have not seen this work mentioned anywhere else, and I thought it was worth getting out there.
This answers most of my questions about part time work. I think it is going to be a trend for the future but if that is not the kind of new jobs being created that may not be true. Think they will do this analysis again in a few years?
I thought the same thing coming in, but it does seem that PT is not a trend. I’m sure this will be revisited – as I said in the piece on employment stats, the PT figures have way more heft than their position in the middle of a big report would suggest.
Part-time work? That’s like having a part time spouse. It’s not going to cut the mustard.
Hopefully you discuss Syria on for Monday.
Bashar Assad can go to hell.
For many people, PT is enough – apparently about 1in 7 workers. But yes, that’s hardly a majority.
I am thinking about a piece on Syria, but I have no idea what needs to be said on it.
I may not be certain but some who are comfortable with part time work are comfortable with assets or ignorant of the costs attached to retirement.There is a lot of ignorance. Work would enable more savings, more social security input. I think it was Minnpost today that noted an increase in suicide by those over 65. I am not sure of what changes will occur as the late boomers retire as many are woefully unprepared.
Retired people are far from secure, and I think you are right that a lot of the PT by choice will be older people who just can’t physically work more than about 20 hours and/or just need a little supplement. And yes, the suicide rates over 50 are pretty high, and it’s a reflection of not being able to survive in this world, so it’s related. There is a lot more to say on PT work, but this is what we have for now. I liked the historical perspective in this report which tells us that where we are is not that unusual (except the reduced hours part).
So the MN DFL is going to try to pass a higher minimum wage bill next session. On Almanac the opposition says more eating places may go to an upscale fast food model. Panera, Chipolte are doing very well amongst the young as is Culvers across families. A comment or two about waitressing may be in order as it was and can be a very social type of eating. Which I generally can’t afford. Upscale for me beyond Chipolte is ordering a burger and fries at a small bar.
The minimum wage probably should be raised substantially, but the problem really does come in the hospitality industry. It is hard to imagine cheap eateries making it, but an upscale one that is selling excellent service as part of the evening does have far more room and desire for higher base wages. Then there are tips to consider, always a strange thing.
“…most of the people at these jobs like it that way” – is there any proof of this? Because the CPS says different. As a Sociologist, I never assume people’s motives or behaviors without actually doing a methodologically sound survey.
I’m looking at a different data set from the Fed, that goes something like this:
Look at LNS12032197 and index it to 1994, when the methodology changed.What I see is a part time employment rate that’s the highest ever in the history of the record (1955).
Now look at set LNU02026629 – which shows the number of people with multiple part time jobs. Index it to 1994 with the methodology change, and that’s also highest in the history of the record.
I had a similar discussion with Noah Smith over the weekend, where he posited that a person may forego taking the job at the gas station because it could hurt his future prospects. It’s not social fact – especially with a 14% U6 rate. We never assume social behavior – we STUDY social behavior. The patterns of behavior does not support the “it’s a choice” theory. Assuming social behavior is one of Microeconomics’ biggest shortcomings, and why most of those “assumption” models have been debunked as living in some alternate universe.
The choice of starving and being homeless versus taking a couple of part time jobs – well…some choice! And the Current Population Survey, along with a bunch of 3rd party surveys say that this is exactly what is happening. Again – we study (not assume) social behavior.
Also the data has been played with too much (or not enough in this case). We index things to account for anomalies in the population or methodology – especially population increases. Using percentages based on population over time doesn’t work in representing the true picture. In 1994 there were 90 million people in the workforce versus 2011 when there were 138 million people in the work force. 3% of 138 million is the same as 5% of 90 million, while sporting an alleged 2% drop. That’s like killing your parents and then complaining that you’re an orphan. We index to account for this.
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Hmm. Appreciate the analysis. I was unaware that the trend in new job creation was toward full time hours. Now that I see it is, I will stop spouting off to the contrary! Of course in my case the two primary issues aside from not wanting to carry all of my eggs in the same basket are that I lack the “right” degree and that I have yet to discover anything I truly love that will also pay the bills…. (Aside-there was a great story about picking majors on npr today.)
I was surprised to find that new jobs are full time, but as I thought about it not so much. The overhead per employee is so high that it often pays to actually plan for overtime in your workforce, so yeah.
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