About That Part-Time Job Theory

What is up with the employment situation?  During the first quarter of 2014, the United States GDP decreased by more than two percent.  Yet, during those three months, employment is reported to have increased by over one million people.

I’ve been suggesting that employment numbers for Rhode Island and the country as a whole are simply not credible, at this point.  Jobs based in Rhode Island have long been on a general, inflationesque, slow-growth trend, while Rhode Islanders claiming to be employed have more or less stagnated.  There’s no evidence that the difference can be explained as people working in neighboring states, and for the past six months, general employment has exploded, while jobs based in the Ocean State have more or less continued their slow, ragged climb.  At the same time, income tax withholdings in Rhode Island have not reflected the supposed boom in employment; in fact, it’s dipped in comparison with the prior year.

Nationally (and locally), debate has focused on whether a shift of American jobs from full-time to part-time (in response to ObamaCare and other Obama-era policies) explains some of the peculiarity of the labor statistics.  Focusing on Rhode Island, I’m skeptical that it explains much.

For one thing, average weekly hours have been essentially flat.  That’s the number collected from the perspective of the businesses, so it isn’t muddied by the possibility of people working the same number of hours at different jobs.  In other words, to the extent part-time employment is on the rise, any reduced hours of people shifted from full time to part time must be cancelled out by full-time workers’ putting in even more hours.  That’s plausible, of course, but on the scale necessary to stand as an explanation?

Looking at the survey of individuals from which the unemployment rate is calculated, people who say that they are involuntarily working only part time have followed this trend:

The blue line is the number of Rhode Islanders who say that they are only working part time, but want to work full time.  The dashed red line is the same statistic as a percentage of the labor force.

The chart shows that the big burst of part-time employment came with the recession, but it’s been getting lower since, not higher.  It’s plausible, even probable, that the policies in play today have helped to lock in this higher number as part of a new normal. But the fact that the percentage-of-labor-force trend has pretty much tracked with the number-of-people trend suggests that the central plot of the story isn’t of part-time jobs being created to replace full-time jobs.  (If the number of part-time jobs were holding steady while the number of full-time jobs went down, the blue line would be where it is, but the red line would rise more.)

At this point, the most likely explanation is that various factors (notably government policy) have kept part-time employment from returning to its pre-recession levels.  Perhaps some of the increase in RI-based jobs can be attributed to a shift toward part-time work (balanced out with even more hours being pushed on remaining full-time workers).  But the real dramatic shifts we’ve seen lately are probably just a statistical error (or deliberate skew) to be revised later.

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