Part-Time America: The New Workforce Normal

This Labor Day millions of American workers have nothing to celebrate.  Their hours have been sliced, their wages have been chopped and their full time jobs have vanished.  They are the victims of the nation's weakest recovery from a recession in U.S. history.

At the end of July, more than 18.1 million Americans were saddled with part-time jobs, representing an estimated 16.5 percent of the work force.  Many of these workers have been forced to accept part-time employment while they pursue full-time opportunities.

President Obama has tried to sweep the issue under the Oval Office rug by focusing the media's attention on the low unemployment figures. But the problem has been on the radar of Federal Reserve Chair Janet Yellen, an Obama appointee as the nation's top banker.

"The unemployment rate is down, but not included in the rate are more than 7 million people who are working part-time but want a full-time job," Yellen pointed out at a news conference in March.  She lamented that some workers may be "stuck" in part-time jobs for the foreseeable future.

For some perspective, individuals working part-time comprised about 17 percent of total work force in 2007.  That figure ticked up to 20 percent in 2009 and remained near that level through the middle of last year before trickling downward to the current level of 16.5 percent.  

Some economists suggest the expansion in part-time employment may just be an echo caused by the recession.  Indeed, part-time job growth spiked during the economic downturn, but it has remained stubbornly high, raising the specter of a new normal in the labor market.

That hypothesis was pooh-poohed last year by the Federal Reserve Bank of San Francisco.  In a lengthly report, the fed flatly declared the high incidence of part-time employment "does not portend permanent changes" in the economy.

However, recent Labor Department household surveys call into question the Fed's assumption.  In June, for example, the department estimated the economy lost 523,000 full-time jobs.  That same month it reported part-time jobs skyrocketed by 799,000.  It was the largest monthly spike in two decades.

At the end of July, there were 7.6 million Americans employed part-time for what the Labor Department euphemistically calls "economic" or "involuntary"reasons.  That means workers' hours were reduced or they were unable to find full-time jobs.  Part-timers work less than 35 hours per week.

Although the White House and its economists dispute it, there is a growing suspicion that Obamacare's implementation may be at least partly to blame for the part-time job growth.  The law requires all but the smallest businesses provide health insurance for full-time employees next year.  

Recent surveys by the Federal Reserve Banks in Philadelphia, New York and Atlanta documented evidence of the impact of the president's health care plan on employment.  Their research found manufacturers and businesses projected increases in the portion of part-timers in their workforces.

For example 19.3 percent of manufacturers in New York said they were raising the number of part-time workers, while in the Atlanta region, 34 percent of businesses plan to hire more time-time employees than in the past.  In Philadelphia, 13.7 percent of firms intend to outsource jobs because of Obamacare.

Up to now, the changing characteristics of America's workforce have escaped national attention, especially in the nation's capitol.  Unless the issue is addressed soon, high-paying full-time jobs will continue to disappear along with the American dream.

Labor Day may soon become a date of mourning for American workers.