How worrisome is the rise of involuntary part-time workers?

October 9, 2012

There are currently 8.6 million workers in the United States who are employed part-time "for economic reasons." These are workers who would prefer to clock a full 40 hours a week, but they have either seen their hours pared back by their employers or else can't find full-time jobs.


(Michael S. Williamson/The Washington Post)

By and large, that's not a great indicator. Before the recession struck in late 2007, there were 4.5 million Americans working part-time for economic reasons. There was a big surge after the financial crisis. But how bad is this rise, exactly? Are these involuntary part-timers working 10 hours per week? 30 hours? That would, after all, make a big difference to their paychecks. 

Here's one clue: Masa Sederevic highlights a research note from Paul Dales at Capital Economics suggesting that America's underemployment situation might not be quite as grim as it first appears. 

Among other things, Dales notes that both the Bureau of Labor Statistics and the OECD keep data on part-time workers in the United States. But there's a key difference: The BLS defines "part-time" as anyone working less than 35 hours. The OECD defines "part-time" as anyone working less than 30. And only the BLS figures show part-time employment remaining at elevated levels:

In fact, according to the OECD, the number of workers putting in less than 30 hours a week is already back down to pre-recession levels. This suggests that most of the rise in involuntarily part-time employment since the recession has been for Americans who are still working between 30 to 34 hours per week.

That's far from ideal — it'd be much better if everyone who wanted full-time work could get it. But as Dales points out, U.S. economic growth would be about 0.3 percentage points lower if all of those additional involuntary part-time workers were clocking 20-hour weeks rather than 34-hour weeks. That makes a big difference in the aggregate.

Related: A closer look at the 3.9 million Americans who have been out of work for at least a year. (This is a much, much bleaker situation.)

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Dylan Matthews · October 9, 2012