Thursday, August 22, 2013

More on Part-Time vs. Full-Time Employment

In my discussion of the July jobs report, I noted that, according to the government's household survey, 77% of net job creation in 2013 has been in terms of part-time jobs.  The data on part-time employment tends to be volatile, so I decided to look at the long-term trend.  The following chart shows the proportion of part-time jobs in the economy (note: there was a break in the data in 1994, not a surge in part-time employment)


After rising during the 1970s, the percentage of part-time employment tended to be cyclical, rising during recessions and falling during expansions.  It was 17% in 1980 and, after nearly three decades of ups and downs, it was 17% at the start of the Great Recession.  As during previous recessions, it rose from 2007 to 2009, reaching a high of 20% (the largest increase since records started being kept in 1968).  After declining modestly through the end of 2012, it has risen back to 19.6% as of July 2013.
It remains to be seen whether it rises a little more, stabilizes near its current rate, or resumes a slow decline over time.  Regardless, it appears that it will take a long time to return to 17% (if ever).  Why the increase in the ratio of part-time employment?  Regardless which side you take in terms of the relative role of  the weak recovery vs. Obamacare, increasing the cost of full-time employment relative to part-time employment can't help but encourage a greater reliance on part-time jobs.