Workers & Economic Inequality

Graph: America Has a Part-time Employment Problem

Post by: Benjamin Landy , on January 11, 2013

2012 was a decent year for employment growth, all things considered. Despite a global economic slowdown and weak demand at home, the unemployment rate dropped 0.7 points to 7.8 percent in December, following 34 consecutive months of steady, albeit slow, private sector job creation. The long-term unemployment rate fell, too: Last month, the percentage of people out of work more than six months fell below 40 percent of all job-seekers for the first time in more than three years. Yet even as the quantity of jobs has increased, their quality has declined. Many of the newly reemployed have had no choice but to accept part-time jobs with lower wages and fewer benefits. 

The shift to a low-wage workforce began during the Great Recession, when businesses began laying off full-time workers and cutting hours to boost profits. By the end of 2009, the number of Americans working part-time for "economic reasons" had doubled to over 9 million—the single largest spike since the Bureau of Labor Statistics began tracking part-time employment in 1955. Although that number has fallen somewhat today, many employers have opted to lock in those productivity gains at the expense of labor, leaving 7.9 million part-time workers unable to find better-paying, full-time jobs.

Although the number of people working part time for "economic reasons" increased in response to the 2007-2009 recession—suggesting that the rise of the part-time worker is temporary—there is also reason to believe that the trends underlying the shift to an increasingly part-time, low-wage workforce are neither short-term nor cyclical.

Global competition has pushed businesses to cut labor costs, either by boosting productivity with technologies that replace workers, or by cutting hours, wages and benefits to create a more "flexible" workforce. Without strong consumer demand to drive hiring or unions to defend their interests, workers have little leverage in the global economy. Rising income inequality has also contributed to this trend, creating a positive feedback loop of lower consumption, falling wages, sharper inequality and a growing population of part-time "working poor."

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