News From Terre Haute, Indiana

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July 2, 2014

More Americans are stuck in part-time work

WASHINGTON — In the new landscape of the American labor market, jobs are easier to come by but hours remain in short supply.

New government data slated for release Thursday is expected to show the economy added more than 200,000 jobs for the fifth straight month - the longest streak since the late 1990s. The unemployment rate is expected to hold steady at 6.3 percent after falling more than a percentage point over the past year.

But there's a gnawing fear among economists that the improving data provides false comfort. More than 26 million people are in part-time jobs, significantly more than before the recession, making it one of the corners of the labor market that has been slowest to heal. That has led to worries that the workforce may be becoming permanently polarized, with part-timers stuck on one side and full-time workers on the other.

"What we're seeing is a growing trend of low-quality part-time jobs," said Carrie Gleason, director of the Fair Work Week Initiative, which is pushing for labor reforms. "It's creating this massive unproductive workforce that is unable to productively engage in their lives or in the economy."

Washington has begun to take notice. As the unemployment rate has dropped, the debate among policymakers has expanded from providing aid to those without a job to include improving conditions for those who do. President Barack Obama has raised the minimum wage for federal contract workers, many of whom are part-time. The White House is also building support for a measure that would require companies to provide paid sick leave. Nationwide protests at retailers and fast-food chains that heavily rely on part-time labor have called for more reliable schedules.

The government defines part-time workers as those whose jobs average less than 35 hours a week. Historically, they made up about 17 percent of the workforce - and, in most cases, they were part-time by choice. They may be caring for family members, enrolled in school or simply uninterested or unable to work more hours. Technically, they are not counted among the unemployed.

But the spike in part-time work since the recession has been largely involuntary. They may have had their hours cut or are unable to find full-time jobs, earning them the official designation of "part-time for economic reasons." Last year, nearly 8 million people fell into this category, compared to just 4.4 million in 2007.

Chicago resident Anna Pritchett is thankful to have a job. The 65-year-old was unemployed for about a decade before landing a part-time position in maintenance at Wal-Mart 2 1/2 years ago. She makes $9.55 an hour and usually works 32 hours a week.

Pritchett would take even more if it were an option. But the company was only looking for part-timers, she said.

"That's what they offered, so that's what I took," she said. "I gotta take what I can get."

Some economists still see hope for workers like Prichett. The swell of people who are part-time for economic reasons has ebbed since peaking at 9 million in 2009. As the broader job market picks up, the prospects of those workers moving into full-time positions could improve.

"I don't find a lot of evidence to support this argument that we're becoming a part-time nation," said Scott Anderson, chief economist at Bank of the West. "I'm not sitting here saying it's mission accomplished [but] the tea leaves I'm looking at are looking a lot more positive to me and more sustainable for the recovery."

Still, the pace of progress has been frustratingly slow compared to other measures of labor market health. Businesses are hiring at a robust pace, and the jobless rate has dropped from a peak of 10 percent in 2009 to 6.3 percent last month. But the broadest measure of unemployment - which includes people who are involuntarily in part-time jobs - is nearly double that rate. Federal Reserve Chair Janet Yellen has repeatedly pointed to that discrepancy as an example of how much farther the recovery still has to go.

"The existence of such a large pool of 'partly unemployed' workers is a sign that labor conditions are worse than indicated by the unemployment rate," she said at a speech in Chicago this spring.

The demographics of part-timers has also changed. The number of young people in those jobs has dwindled since the recession, according to an analysis by the Federal Reserve Bank of San Francisco. They've been replaced with adults in their prime working age, between 25 and 54 years old. Many of them are single men and women without a high school diploma.

That finding corresponds with data showing the types of part-time jobs have shifted. Almost every industry employed a higher proportion of part-time workers last year than in 2007, according to the National Women's Law Center. The one exception? Professional occupations, where the share of part-timers actually dropped.

The rise of part-time work is also related to another lingering problem in the job market: long-term unemployment. The Federal Reserve Bank of Atlanta found that the longer workers have been out of a job, the more likely they were to take a part-time job even if they wanted a full-time one.

"There's not understanding for how having just half a job is fueling unemployment overall," said Gleason of the Fair Work Week Initiative. "That's a part of the discussion we need to be having."

The analysis by the Atlanta Fed concluded that the high rate of involuntary part-time work is a significant factor holding back wage growth in the job market.

Pritchett understands that problem firsthand. Her earnings from Wal-Mart are not enough to cover living expenses for herself and her unemployed adult son, even when combined with her Social Security benefits. She is behind on bills and said her raises have totaled 80 cents an hour over the past two years. Each day after her shift cleaning the store, she heads home to soak her feet.

"People say, 'Anna, you need to buy you some Dr. Scholl's.' But I say, 'Do you know how much those shoes cost?' "



 

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