Senin, 08 Juli 2013

Putting part-time employment in perspective

Much has been made of late over the fact that the number of people employed part-time for economic reasons has jumped—by more than 300K in June, which is more than the entire gain in employment for the month. In reality, the number of involuntary part-timers has been slowly declining over the past several years, much as it does in every recovery, and the increase in June is similar to other monthly increases in recent years, and thus looks to be more a problem of seasonal adjustment than any sudden change in the dynamics of the labor force or the jobs market. The problem today with part-time employment is not the recent growth in part-timers, but the fact that the number of part-timers remains unusually high relative to what it was in prior business cycles, just as the unemployment rate in general remains unusually high.

As the chart above shows, there was a huge, outsized gain in the number of part-time employed during the Great Recession; far more than anything we have seen in modern times. This can't be blamed on the failings of Obamacare, which wasn't passed until mid-2010 and which creates strong incentives for small and medium-sized businesses to prefer part-time workers over full-time workers in order to minimize their exposure to Obamacare's employer mandate. It should also be clear that last month's rise is not at all unusual: there have been several similar one-month increases in the past several years. The trend in this relatively volatile series remains down, in a fashion similar to what we have seen in prior business cycle expansions.

If there is anything to blame for the unusually high level of part-time employment, it is whatever has caused this recovery to be unusually weak. I think the finger of blame points towards a variety of causes: the uncertainty created by the Fed's Quantitative Easing, the generally high level of risk-aversion to be found in a variety of market indicators, the extremely strong demand for high-quality risk-free assets, the marked expansion of government spending than began in 2008, the rise in marginal tax rates, and the substantial increase in regulatory burdens, including those imposed by Obamacare.

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