The part-time clouds in a jobs report of blue skies

ADP private payroll data points to an encouraging trend in service-related jobs that are key to economic growth.

It's always helpful to remember that the Labor Department's monthly jobs numbers are volatile month-to-month, but June’s 322,000 increase in people who answer “Yes” to the question “Are you working part time because you can’t get full-time work?” is a significant jump.

More importantly, perhaps, is that this number basically hasn’t improved since 2011, and it’s WAY higher than before the recession (it’s doubled and hasn’t come down much in the so-called ‘jobs recovery’).

Analysts and economists posit several interesting reasons this might be happening:

  • The job market is seriously mediocre, there just isn’t enough work for companies to increase people’s hours to full-time, or for companies to finally offer a decent full-time job that the part-time gas-station or donut-shop or home-improvement-store worker can go grab instead.
  • The Affordable Care Act (ACA) creates an incentive for employers to keep people part-time, or even drop them down to part-time hours, because the employers don’t get penalized for not offering health insurance. The bill will be paid by taxpayers, who will subsidize these part-time workers’ health insurance premiums in time. The one-year ACA employer-mandate delay just announced by the Obama administration may slow this down some, but it won’t make the trend, if it’s really happening, go away.
  • Employers just like having part-time workers: it gives them more flexibility, and it’s cheaper (part-timers get fewer benefits). This would be a ‘structural’ change in the labor market, and although any uninformed (i.e., those of us without a Ph.D. in economics) person you stop on the street will likely agree this is happening, economists don’t know it’s happening and won’t be able to really know for years. If there is still a lot of part-time work 'when the economy gets back to normal', including people working part-time who say they’d just love a full-time job instead, then we’ll be able to say something’s really permanently changed in the economy and the labor market. Then more part-time work will be the 'new normal.' Right now it’s just because the economy is lousy.
  • Finally, part-time work is just one category of ‘underemployed’ or ‘total unemployed.’ There's also people who are available for work but have stopped looking because they don’t think there’s a job out there for them ('discouraged workers'). That number is also up in June, by 200,000. And there are people who are working full-time, but below the level their education and training and work experience prepared them for. They are probably making less money than they used to, less money than their resume would indicate they could or should be making. And they’re waiting in the wings, hoping some more better jobs show up some day, so they can stop checking people out at RiteAid and start doing what they are trained for.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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