State of the Labor Market

October Jobs Report Preview: Many of Today’s Part-Time Workers Are Hoping to Find Full-Time Jobs


Does the increased share of workers in part-time employment reflect a structural shift in the economy?

We are coming into the October jobs report with a record low unemployment rate. But the question remains: why aren’t wages picking up more strongly? Clearly, the unemployment rate is not capturing all the slack in our economy. As we wait impatiently for Friday’s report to see whether wage growth picked up, we should remember that part-time workers who want full-time hours are available for employers to hire — and that may slow how fast employers need to raise wages to get the workers they need.

Currently, 16.1% of the labor force is working part-time. This is above its pre-recession low of 15.5%. But the part-time share has been around 16.1% for a year, suggesting that it may have reached a new normal level. In addition, employers are not yet shifting away from their current level of demand for part-time workers, except in a few tight sectors.

Of course, some workers prefer part-time work. So does the increased share of workers in part-time employment reflect a structural shift in the economy? Or could the strengthening labor market continue to move workers out of part-time work into full-time jobs?

Survey data show that, along with a higher overall part-time rate, we have an elevated rate of involuntary part-time workers, that is, those who are working part-time but would prefer full-time hours. The share of the labor force made up of those who are working part-time but want full-time hours is 2.9%, above its pre-recession low of 2.6% and its recent series low of 2.2% in 2000. What’s more, 17.8% of part-time workers would prefer full-time work, up from 16.7% in 2006 and 14.2% in 2000. In other words, workers who work part-time now are more likely to be working part-time involuntarily than at similar points in past economic cycles.

Thus, part-time workers represent a growing part of the labor force. And, a greater share of part-time workers are there involuntarily. Past Hiring Lab research has shown that these workers aren’t more likely to drop out of the labor force or decide they like part-time work than they were in the past — they’re largely holding out for full-time hours.

Therefore, the elevated level of involuntary part-time workers as a share of the labor force is largely due to part-timers who did not choose that type of work, not to an overall shift toward part-time work in our economy. We might not expect to get back to previous low shares of involuntary part-time workers in the labor force given the overall shift into part-time by employers and job seekers. But we still have room to go: accounting for the increased amount of part-time work in our economy, the equivalent involuntary part-time rate was 2.7% in 2006 and 2.3% in 2000 (using the lows reached in those years).

With job growth continuing at a steady pace, low unemployment, and a flattening prime-age employment rate, the two big numbers I will be keeping an eye on this week are the involuntary part-time share and wage growth.

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