Fact of the Week: Millions of Part-time Workers are Still Looking for Full-time Work


August 21, 2014

“Vicki Lira lost her full-time job of 20 years when the printing plant she worked in shut down in 2006. Then she lost a job processing mortgage applications when the housing market crashed. Vicki faced some very difficult years. At times she was homeless. Today she enjoys her part-time job serving food samples to customers at a grocery store but wishes she could get more hours. Vicki Lira is one of many Americans who lost a full-time job in the recession and seem stuck working part time. The unemployment rate is down, but not included in that rate are more than 7 million people who are working part time but want a full-time job. As a share of the workforce, that number is very high historically.”
This story, shared by Federal Reserve Chair Janet Yellen in a speech earlier this year, highlights an issue that many economists and labor market experts are keeping a close eye on – “involuntary” part-time workers. According to the Labor Department, these workers want full-time work but are working less than 35 hours a week “for economic reasons,” meaning they either can’t find a full-time job or their hours were cut back. Last month, there were 7.5 million such workers. As Bloomberg reports, the concern about involuntary part-time workers may play a role in the Federal Reserve Bank’s symposium on the labor market taking place this week in Wyoming.

While the ‘official’, often-touted unemployment rate currently stands at 6.2 percent, the broadest measure of unemployment, which includes involuntary part-time workers and discouraged job seekers who have given up looking for a job but want to work if they thought jobs were available to them, is nearly double that at 12.2 percent.

The number of involuntary part-time workers has changed dramatically since the start of the recession. In December 2007, it stood at 4.6 million. Over the two-plus years that followed, it doubled, reaching a height of 9.2 million in March 2010. The Center on Budget and Policy Priorities notes that this jump also doubled these workers as a share of the labor force, up from 3 percent to 6 percent at its peak. Since then, the number of involuntary part-timers has gradually fallen and gotten better as more full-time jobs have become available and as employers have increased available hours for workers. However, its current level is still more than 62 percent higher than it was before the recession began. According to the Economic Policy Institute, voluntary part-time employment – those who work part-time because they want to or to allow for other obligations like school or care-giving responsibilities – has generally returned to pre-recession levels.

Being stuck working fewer hours than you’d like can have many negative impacts on workers in those positions. Obviously, the inability to work more hours limits the paycheck workers receive and the money they have for basic needs like food and housing. Most part-time jobs don’t include benefits like health insurance, paid time off, sick leave, or retirement plans, and many don’t include reliable schedules, making it harder to arrange for child care, additional education, or even another part-time job. While some part-time workers have fought to try to get some of these benefits, and some proposals have even been floated in Washington to protect part-time workers (like the Schedules that Work Act), many are still without these perks.

The persistent problem of involuntary part-time workers also reiterates the importance of raising the minimum wage, as 45 percent of people who would benefit from raising the minimum wage to $10.10 are part-time workers.  According to the Washington Post, the Federal Reserve Bank of Atlanta concluded that the high rate of involuntary part-time work is a significant factor holding back wage growth in the market. Particularly with persistently high long-term unemployment, when an unemployed worker is offered a part-time job at a low wage, they are more likely to take it even if they want a full-time job and higher wages.

When the nation’s top bankers and economists gather this week in Jackson Hole to discuss and debate a number of measures that point to how quickly – or slowly – our economy is recovering, pundits and investors across the country will be watching and listening. Let’s hope that in all the number crunching and data mapping they don’t forget about folks like Vicki Lira and the 7.5 million other Americans like her who are struggling to make ends meet while stuck, involuntarily, in part-time jobs.

Fact of the Week
Labor and Employment
minimum wage
part-time workers