New York Times
POSTED: 1:30 a.m. HST, Apr 20, 2013
The U.S. economy has generated 30 straight months of job growth. But for millions of people looking for more work and greater income, that improvement provides little solace.
In March, 7.6 million Americans who want more hours were stuck in part-time jobs, about the same as a year earlier and 3 million more than there were when the recession began at the end of 2007.
These almost invisible underemployed workers do not count toward the standard jobless rate of 7.6 percent. A broader measure, which includes the involuntary part-timers as well as people who want to work but have stopped looking, stands at 13.8 percent.
"There's nothing inherently wrong with people taking part-time jobs if they want them," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "The problem is that people are accepting part-time pay because they have no other choice."
Even for those who have been able to take advantage of the better job market, the opportunities have not been good. Since the economy began to recover almost four years ago, hiring has been concentrated in relatively low-wage service sectors, like retail, home health care, and food preparation, and in contingent jobs at temporary-hiring companies. For example, nearly one out of every 13 jobs is at a restaurant, bar or other food-service establishment, a record high.
Household incomes have been stagnant throughout the recovery, and actually fell in the latest report, according to Sentier Research. As a result, economists and policymakers have been expressing concerns about not only the pace of hiring but the quality of new jobs as well.
"It's important to look at the types of jobs that are being created," Sarah Bloom Raskin, a member of the Federal Reserve Board, said in a recent speech. "Those jobs will directly affect the fortunes and challenges of households and neighborhoods as well as the course of the recovery."
While increases in part-time and temporary work can sometimes be an early sign that employers will soon take on more permanent hiring, many workers have been trapped in such jobs far longer than they had anticipated.
Part-time work rose rapidly during the recession and early parts of the recovery, and it has not let up much. Today, 19.1 percent of workers say they usually work part time, defined as fewer than 35 hours per week, versus 16.9 percent when the recession started.
Essentially all of the gains in part-time employment have been among people who are reluctantly working fewer hours because of slack business conditions for their employer or an inability to find a full-time job.
"It was a relief just to find something," said Amie Crawford, 56, of Chicago. After four months looking for a new job as an interior designer, which she had been for 30 years before the recession, she accepted a position as a part-time cashier at a quick-service health-food cafe called Protein Bar.
She keeps asking for more hours, but her manager's response is always the same.
"He tells me, ‘I try to give you as many hours as I can, but everybody wants as many hours as they can,"' Crawford said.
The owner of the company, Matt Matros, said it was working on giving her more hours, but each location had a limited need for cashiers. He added that Crawford had the opportunity to get trained in other skills if she wanted to advance or take on other positions.
Holding a part-time job when a full-time one is desired is frustrating for workers, and not only because fewer hours means less income. Like temp workers, part-timers are also less likely to get benefits and are more likely to be stuck with unpredictable schedules that make it hard to plan for child care, transportation or even a second part-time job.
"I'll be on the schedule from this time to this time, so I expect to work from this time to this time," Crawford said. "But because on a particular day, who knows, it's snowing, raining, or people just didn't come in today for whatever reason, they start cutting people. So I get sent home in the middle of my shift."
Part-timers also generally earn less 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 Center for Economic and Policy Research, a liberal research organization. "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."
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 U.S. 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."
Strong job growth in food services and retail, which disproportionately rely on part-time work, is probably also skewing the overall composition of full- versus part-time employees.
Changes in health care policy may be playing a role, too.
Paul Dales, senior U.S. 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.
Confusion about the law and its requirements abounds, and even some small businesses that will not be affected may be changing their behavior because of it.
"Operators can't be as casual about workers' total hours as they could before because there are fines and penalties and costs associated with it," said Scott DeFife, executive vice president for policy and government affairs for the National Restaurant Association. "You can't accidentally let them become full time without a specific purpose."
There may be other cost and efficiency pressures for employers to shift more of their workers into part-time jobs, independent of either public policy or the business cycle.
Peter Cappelli, a management professor at the Wharton School of the University of Pennsylvania, said it was much easier to fit workers' schedules to fill longer hours of operation and meet the ups-and-downs of customer demand if they were part time.
"Trying to efficiently schedule full-time workers in McDonald's shifts requires some real brain power, some sophisticated math or software scheduling to make that work," Cappelli said. "If on the other hand you can do it with part-time workers, it's a piece of cake."