Since the end of the Great Recession in 2009, there has been speculation that the United States has been experiencing an epidemic of part-time work, intensified by legislative changes in the Health Care Reform Law, which would require employers to provide health insurance to employees who work 30 hours or more per week.
Is it true that we're becoming a nation of part-time workers, sentenced to diminished workweeks that no longer provide the full employment that the majority of us need? Unfortunately, there is evidence that an increase in part-time work appeared during the recession following the financial crisis, and persists still. Let's take a look at the reasons for this phenomenon, as well as the probability of this state of affairs becoming a permanent part of the new employment landscape.
A recessionary increase in part-time work
Recently, the Federal Reserve Bank of San Francisco addressed this very issue, noting that the percentage of people working part-time -- defined by the Bureau of Labor Statistics as working between one and 34 hours per week -- increased during the recessionary years of 2007 to 2009, rising from 17%, to 20% of the workforce during that span of time. The study noted that the level remained elevated through mid-2013.
Rather than label the change as a permanent fixture of the new job environment, however, the study's authors noted that such an occurrence is common during recessions, although the persistence of the phenomenon is unusual. Using adjusted metrics, the report noted that the reduced participation of workers aged 16 to 24 years old has actually exerted downward pressure on the percentage of part-time workers, because that age group is more apt to work fewer than 35 hours per week.
So, while there is definitely a higher percentage of workers working part-time now than in the year before the recession, the report sees the depth of the downturn as the reason for such an unusually long recovery time for the job market.
Other (possible) reasons for more part-time workers
As the San Francisco Fed paper notes, some have suggested that pending changes in health insurance coverage tied to Obamacare might be prompting employers to cut employee hours to fewer than 30 per week, in order to escape the law's requirement to provide employer-based health insurance. The authors opine that the effect in that regard, if any, would be quite small.
In reality, statistics don't give weight to the notion that Obamacare is pushing some full-time workers into part-time positions. In its latest employment report, the BLS shows that the number of people working part-time for economic reasons -- that is, because they could not find full-time work, or work was slack -- was virtually unchanged, at approximately 8 million people over the past year. In addition, the average weekly hours across all private sectors barely budged from October of last year, gaining one-tenth of an hour compared with one year ago.
Economists from Wells Fargo have an interesting take on the higher rate of part-timers: many people prefer part-time work these days. The bank's chief economist told NPR recently that the BLS data doesn't really capture the new work situation, which now comprises many who would rather work part-time, often from home.
An example he gives is somewhat dubious. He mentions a writer, working as a contractor from home, who takes a week to take care of her mother. When BLS calls to ask if she had worked at all the past week, she'd likely say "no," thus being counted as unemployed.
This scenario makes little sense, because she is actually self-employed, a distinction neither the worker nor BLS would be likely to miss. Also, according to the questionnaire that census canvassers use, the questions asked are very specific, and designed to elicit information that would weed out those who are working part-time out of choice. Interviewers are even encouraged to "probe," in order to determine the subject's reason for working part-time instead of full-time.
The new normal?
While the San Francisco Fed economists seem to think that this situation will eventually right itself, there seems to be no indication that things are moving in that direction.
Although there will always be those who choose to work less than full-time, the sad fact is that millions are doing so because they have no choice. For those workers, a full job market recovery can't arrive quickly enough.
Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.