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.
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?
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.
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.