There always have been part-time jobs. Some workers want them. Some employers provide them out of financial and scheduling necessity.
Since the Great Recession began, however, the proportion of involuntary part-time employment has grown. There are signs the Affordable Care Act is swelling those ranks, as employers prepare to reduce their health-insurance coverage responsibility for full-time employees.
When the economic collapse began in late 2007, an estimated 24.7 million Americans worked part time. That number now is 27.5 million, which is about one-fifth of the labor force.
A small share of this growth is fueled by workers’ preferences. They’re juggling school and work, or family and work, or downscaling their work lives as they near retirement. Part-time hours fit their needs.
But according to U.S. Department of Labor household surveys, most of the recent part-time job growth is not by workers’ choice. In the latest national jobs report, covering April 2013, nearly eight million workers – about one-third of all part-timers – said they were involuntarily part time.
The Labor Department classifies such involuntary part time as “for economic reasons.” That means that only part-time hours were offered, because of “slack work or business conditions,” or that job hunters could find only part-time work.
Indications also abound that employers around the country are turning full-time into part-time jobs, to avoid employee health care coverage requirements that will kick in next year.
Beginning in 2014, businesses that have more than 50 full-time-equivalent employees must offer their full-time workers access to a qualified health care plan, or pay a penalty of $2,000 per person. The health care law defines a full-time employee as anyone working more than 30 hours a week.
That is a precedent-setting and low definition of full-time work, a member of the National Federation of Independent Business testified before Congress in April.
“This is already causing rescheduling of employees, where public and private employers have read the law,” said William Gouldin, a business owner who has provided health insurance to his full-time employees.
“Every employer will be forced to define part-time employment as something below 30 hours per week, and most will use between 20 and 27.5 hours per week,” Gouldin testified.
The effect will be that many part-time workers will lose hours and income they’ve been used to getting, or they’ll be forced to add another part-time job to make up the difference.
“The new full-time employee definition will cause a hole in employment,” Gouldin warned Congress.
A study released earlier this year by the University of California-Berkeley Center for Labor Research and Education estimated that 2.3 million workers nationally, or nearly two percent of the workforce, are at greatest risk for having their hours cut to below 30 hours a week.
But there are no formal statistics yet to prove that businesses are holding at 49 employees, or cutting work hours. to stay under the 30-hour rule. A small survey by the Federal Reserve Bank of Minneapolis found that four percent of companies were moving toward a larger part-time workforce, because of health reform.
Some employers have publicly acknowledged they’re cutting workers’ hours because of the Affordable Care Act. Among them: Regal Entertainment Group; a Five Guys franchise owner; an Applebee’s franchisee; the owner of Papa John’s pizza chain; and a Denny’s franchise owner.
Darden, which owns the Olive Garden, Red Lobster and LongHorn Steakhouse chains, announced, and then backed off from, a plan to reduce full-time workers to part time, after a swell of negative national reaction.
Publicized or not, the part-time trend has become common enough in the service industry that workers have given it a name: the “Obamadodge,” said Mike Enriquez, a labor advocate who is active in the Kansas City area.
“It’s happening across the board in retail, whether they announce it or not,” Enriquez said.
Earlier this year, a grassroots organization called the Retail Action Project staged a protest outside a New York City store, to protest the conversion of full-time to part-time jobs. The group continues to criticize national retailers for “part-timing” workers who had previously been full time.
Because of the impending Affordable Care Act requirement, Dennis Jacobe, chief economist for Gallup, said it’s “not a surprise that employers appear to be seeking more part-time workers and fewer full-time employees in 2013.”
That cutback in work hours isn’t good news for employee pocketbooks, he said, or for the overall U.S. economy.
In a recent blog post on Gallup.com, Jacobe wrote: “Having a part-time job takes workers off of unemployment, but it may leave them under-employed,” and may suggest the labor market is stronger than it really is.
Add this job market reality to the mix:
Some of the biggest job growth in the past couple of years has been in industries with high percentages of part-time workers. That includes food service, retail, temporary help services, health care and other personal services. Most of these relatively low-wage industries have grown about three times as fast as high-paying occupations, since 2007.
Health care reform isn’t the only reason, of course, why workers’ hours are being cut back.
“Global competition has pushed businesses to cut labor costs, either by boosting productivity with technologies that replace workers, or by cutting hours, wages and benefits to create a more ‘flexible’ workforce,” according to Benjamin Landy, a policy analyst with the Century Foundation, a liberal think tank. “Without strong consumer demand to drive hiring or unions to defend their interests, workers have little leverage in the global economy.”
Economists also note that the rise of women in the workforce has pushed creation of part-time jobs, because that’s what many mothers want.
Whatever the cause, there’s no sign of a turnaround in the part-time trend. A national 2011 survey of employers by the McKinsey Global Institute found 58 percent of employers saying they would hire more temporary and part-time workers, and analysts expect the percentage to increase.
“Technology makes it possible for companies to manage labor as a variable inpu,t rather than a fixed one,” the McKinsey report said. “Using new resource-scheduling systems, they can staff workers only when needed – whether it’s for a full day or a few hours. In our survey, more than half of employers expected to use more part-time, temporary and contingent workers in the years ahead.”
The plethora of part-time employment is affecting the length of the average workweek. The monthly Labor Department jobs survey for April pegged the length of the average workweek at 34.4 hours. That’s actually improved from an average low of 33.8 hours in 2009, but it continues to show that millions of U.S. workers don’t have a 40-hour workweek.