Michele Kearney's Snuffysmith's Blog

America's Economy: Going "Part-Time"?

07/07/14

Samuel Rines

Economics, United States

The recent employment report from the Bureau of Labor Statistics (BLS) showed the US economy generated 288,000 jobs, the unemployment rate continued to decline, and the participation in the labor force held steady. By all appearances, it was a blockbuster month for jobs. But one level deeper into the report, it becomes a bit more complicated. Jobs were created, but the question of their quality lingers.

To say the least, the quality was poor. The job gains were solely part-time; 799,000 part-time jobs were taken. Worse still, 523,000 full-time jobs were lost. In fairness, most of these part-time jobs were not inherently bad. The majority of the June gains were in what is commonly referred to as “voluntary” part-time employment—people found part-time work who wanted it. The disconcerting element was the creation of part-time and the simultaneous destruction of full-time jobs.

Part-time jobs—with lower wages, less stability, and higher turnover—are less desirable than full-time ones for an economy. There are fewer fringe benefits associated with part-time work, and the jobs are generally considered to be of lower quality. Not to mention a lack of ability to negotiate for higher wages and lower amounts of job training. This leads to slower consumption growth than would normally be associated with similar levels of employment, a labor force that is likely to be much more volatile in future downturns, and workers with lower levels of on the job skills. A part-time economy simply does not have the economic robustness of a full-time one.

A single month of strong part-time employment creation and abysmal full-time employment would be interesting though not troubling. But this is by no means a outlying statistic. In June, the BLS released its May employment report showing that employment levels rose above their pre-crisis peak for the first time, and this was lauded as a seminal moment of the recovery. But this is deceiving. Full-time employment remains 3.7 million below its December 2007 peak after generating 7.6 million since the 2009 bottom. This means that to get back to the peak, the US must generate nearly 50 percent more full-time jobs than it already has during the recovery. The celebration was premature to say the least.

Read full articlehttp://nationalinterest.org/blog/the-buzz/americas-economy-going-part-time-10819