Part-time jobs: Dramatic shift in who is underemployed

The huge spike in part-time jobs is not unusual as far as recessions go, according to a new report. What has changed dramatically is the age of those taking the part time work. The burden of part time work has shifted towards older people, making it more of a hardship for those who want to work full time but can't.

By: Mark Koba
Published: Monday, 2 Sep 2013
CNBC

The huge spike in part-time jobs since the recent recession is not unusual as recessions go, according to a new report from the Federal Reserve Bank of San Francisco. But what has changed dramatically is the age of those taking the part-time work.

"Given the weak labor market, what we're seeing in the number of part-time jobs is historically normal," said Rob Valletta, an economic research advisor at the FRBSF, and author of the study.

"But the burden of part-time work has shifted to older people and that makes it more of a hardship for those who want to work full time but can't," he said.

"You see a 40-year-old who has a family and working part-time now," Valletta added. "That's a lot different than a teenager who's living with their parents."

'Older' part-timers

As a percentage of the overall workforce, the consistent growth in part-time jobs—currently some 8.2 million people are considered part-time workers in the U.S.—is below previous highs.

In his paper, Valletta states that part-time employment—those who traditionally work less than 35 hours a week—reached a level of 20.3 percent in 1983, slightly above the recent peak of 19.7 percent in 2010.

Part-time jobs have traditionally been the domain of younger workers. Those between the ages of 16 and 24 are much more likely to find part-time work than those between the ages of 25 and 54.

But participation by younger workers as part-timers has decreased over time. The percentage has dropped from 23 percent in the late 1970s to just a little more than 12 percent now, according to Valletta.

Also, showing a decline as part-time workers have been married women with some college education—from 30 percent in 1976 to around 20 percent in 2011.

Meanwhile, the percentage of men and women in the 25 to 54 age range has gone from under 10 percent for men in 1970 to nearly 15 percent in 2011 and from 12 percent for women to almost 25 percent in 2011.

According to Valletta's research, the current high level of part-time work is expected given the size of the "cyclical downturn ... part-time work typically increases in recessions."

"It's not surprising that we have so many older people taking part-time jobs," said Jason Bent, a professor of employment law at Stetson University.

"It just shows how we have a low-wage recovery and a lack of middle-class jobs," he said.

Valletta said he expects the situation to improve—for those who want to work full time.

"I think we'll see a decline in the amount of part-time workers and an increase in full time," he said. "It's just going to take a while for the job market to get better."

'Older' part-timers

One reason Valletta thinks the situation will get better is that he believes threatened job cuts by employers because of the implementation of Obamacare— and the mandatory health benefits for full-time workers that come along with it—won't be as drastic as some are predicting.

"Employers have legitimate concerns about costs, especially the small firms with 50 or more workers," Valletta said.

"But I think the switch from full-time to part-time jobs won't be so big," he said. "We saw in Hawaii that part-time work increased only slightly in the two decades following the enforcement of a state employer health mandate. I expect that to be the case with Obamacare."

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