Involuntary Part-Time Work On the Rise
Data discussed here reflect nationwide conditions and are the result of expensive surveys. Because of time and budget constraints, data of similar quality cannot be produced at the state level. Economic indicators, including the number of people working part-time for economic reasons, are published each month in Wyoming Labor Force Trends.
Anumber of labor market indicators from the Current Population Survey (CPS) have pointed to a weakening labor market for more than a year, even before the onset of the current recession in December 2007 (as designated by the National Bureau of Economic Research). The official unemployment rate, for example, rose by 2.3 percentage points from its recent low of 4.4% in March 2007 to 6.7% in November 2008. The employment-population ratio, which is the proportion of the working-age population that is employed, trended down from a recent peak of 63.4% in December 2006 to 61.4% in November 2008.
Another important indicator of labor market difficulty, the number of persons working part-time for economic reasons, has suggested a softening in the demand for labor since about mid-2006 (see Figure 1). Sometimes referred to as involuntary part-time workers and viewed as underemployed, these individuals wanted full-time jobs but worked less than 35 hours during the survey reference week primarily due to slack work (a reduction in hours in response to unfavorable business conditions) or the inability to find full-time work.1 In November 2008, 7.3 million persons were employed part-time for economic reasons, up from a recent low of 3.9 million in April 2006 (see Table 1). The percentage of total employment made up of involuntary part-time workers increased by 2.4 percentage points to 5.1% over the same period.
As is typical during labor market downturns, the bulk of the 3.4 million increase in economic part-time employment was due to an increase in the number of workers whose hours were cut back due to slack work. In November 2008, workers employed part-time for economic reasons due to slack work made up 3.8% of total employment, more than twice the recent low of 1.7% in April 2006 (see Figure 2).
In general, workers under age 25 are overrepresented among those employed part-time for economic reasons. In third quarter 2008, persons age 16 to 24 accounted for approximately 25% of all workers employed part-time for economic reasons while representing just 14% of all employed workers. However, workers age 25 and older have accounted for a disproportionately large share of the recent rise in involuntary part-time employment. From third quarter 2006 to third quarter 2008, 84% of the increase in involuntary part-time employment occurred among workers age 25 and older; they made up 75% of all involuntary part-time employment in third quarter 2008.
Three industries accounted for approximately two-fifths of involuntary part-time employment in third quarter 2008: retail trade, food services, and construction. These industries accounted for approximately the same proportion of the total rise in involuntary part-time employment from third quarter 2006 to third quarter 2008.
In summary, the recent rise in involuntary part-time employment was mainly due to an increase in the number of workers whose hours were cut because of slack work and occurred mostly among workers age 25 and older. Also notable were additions to the increase from construction (reflecting the downturn in the housing market), food services, and retail trade.
1A very small number are in the involuntary part-time employment category because of a seasonal decline in demand or because their job started or ended during the week.
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by April Szuch.
