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Monday, March 4, 2013

Surging Part-Time Work Distorts Jobs Picture

Uncertainty encourages companies to hire part-time instead of full-time workers. So do policies such as those in the Affordable Care Act that place extra requirements on companies hiring full-time employees. In this regard, it is not a surprise that employers appear to be seeking more part-time workers and fewer full-time employees in 2013. This emphasis on hiring part-timers is not good news for Americans seeking full-time work or for the overall U.S. economy.

The proportion of part-time jobs in the U.S. workforce hit 20.6% in February, a multiyear high. This continues a trend in part-time jobs that has steadily increased since July, when that figure was 17.6%.


At the same time, Gallup's Payroll to Population measure shows that the percentage of full-time employees in the U.S. population is now below where it was in February 2012. This follows no year-over-year improvement in January.


Part-time work is better than no work when you don't have a job. Further, part-time job growth can be a positive for the overall economy when such jobs are being used temporarily as business expands with the intention of converting them to full-time jobs over time.

However, it seems likely that today's surge in part-time jobs is not a good thing for individual Americans or the economy as a whole.
  • A part-time job by itself usually doesn't provide an employee with enough money to live on -- part-time workers find it hard to live on their own, let alone support a family.
  • A part-time job also tends to have limited benefits, again making it difficult to live on such work alone.
  • Part-time jobs tend to lessen work experience compared with full-time work, making it harder for such employees to grow and move into higher-paying jobs.
  • As a result, having an increasing number of part-time jobs is not a solid foundation for economic growth because such jobs limit the ability of Americans who have them to form new households and buy all the things associated with family formation.
Worse yet, a surge in part-time jobs can be misleading for the U.S. economy as a whole. Having a part-time job takes workers off of unemployment but may leave them underemployed. Part-time jobs are also not only counted but sometimes double-counted by the government's establishment survey. A part-time job is counted as a new job even if the part-time employee is already employed full or part time.

Policymakers should not be mislead by the surge in part-time jobs in early 2013. The economic reality is that the U.S. job situation worsened in February, as real full-time job growth as a percentage of the population declined. In turn, this suggests the top priority of policymakers should be seeking ways to not only increase the number of jobs -- but full-time jobs -- in the U.S. economy.

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