Tags: part time | full time | jobs | Fed

San Francisco Fed: Number of Part-time Jobs Is Normal, Age of Workers Isn't

By Michelle Smith   |   Wednesday, 04 Sep 2013 08:23 AM

The number of part-time jobs in this post-recession economy isn't abnormal. What's unusual is the ages of the people holding those jobs, according to a report from the Federal Reserve Bank of San Francisco.

When employment reports reveal the number of jobs added in a given month exceeded expectations, critics often point out that many of those positions are part time.

Some observers worry that the stubbornly high prevalence of part-time work may be one feature of an unfavorably "new normal" in the labor market. But data show an increase in part-time work after a recession is quite typical, the report showed.

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"Given the weak labor market, what we're seeing in the number of part-time jobs is historically normal," Rob Valletta, an economic research advisor at the San Francisco Fed and author of the study, told CNBC.

"But the burden of part-time work has shifted to older people and that makes it more of a hardship for those who want to work full time but can't," he added.

These people are known as "involuntary" part-time workers and their ranks have grown.

Generally, part-time jobs are mostly held by people between the ages of 16 and 24 and married women. In the current economy, these labor pools are shrinking. Meanwhile, an increasing amount of "prime-age workers" — those between ages 25 and 54 — are moving into part-time positions.

The increase among the new breed of part-time workers was "especially large in the recent recession and its aftermath," the report stated.

"It's not surprising that we have so many older people taking part-time jobs," Jason Bent, a professor of employment law at Stetson University, told CNBC. "It just shows how we have a low-wage recovery and a lack of middle-class jobs."

The reports revealed that the dominant cause is slack work, which causes hours to be cutback. And this is unsurprising given that the United States has only recovered about three-fourths of the jobs lost during the economic downturn.

"I think we'll see a decline in the amount of part-time workers and an increase in full time," Valletta said. "It's just going to take a while for the job market to get better."

However, many blame the situation on Obamacare, particularly the employer mandate, which requires companies with more than 50 employees to provide health insurance for full-time employees.

"If Obamacare, truly, was not a real financial burden for employers, we wouldn't observe any unusual resort by firms, of late, to the use of part-time versus full-time workers," Richard Salsman, chief market strategist of InterMarket Forecasting, wrote in a Forbes article.

He noted that data show "firms are, indeed, using relatively more part-time employees than usual."

The trend of using part-time workers to avoid healthcare costs could continue through 2015, but likely at a slower pace, the report predicted. And ultimately, the effect should be small.

Research suggests that when Obamacare is fully implemented the increase in part-time work is likely to be 1 to 2 percentage points or less, the report stated.

"I think the switch from full-time to part-time jobs won't be so big," Valletta told CNBC.

"We saw in Hawaii that part-time work increased only slightly in the two decades following the enforcement of a state employer health mandate. I expect that to be the case with Obamacare."

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