Part-time jobs grow faster than full-time work

The part-time workforce continues to expand at a faster rate thanks to several factors in play. While some expect the trend to continue as the new health care law is ushered in this next year, other analysts said it’s part of a gradual shift in the overall employment landscape.

In July, U.S. employers added a disappointing 162,000 jobs and economists quickly said those numbers are skewed toward part-time work in low-wage industries such as retail and food service. Retailers led job gains with 47,000, and restaurants and bars added 38,000, according to Bureau of Labor Statistics data.

A separate survey of employers indicates the ranks of part-time workers have risen by 791,000 since March. The part-time workforce has grown more than four times faster than the full-time segment which expanded by 187,000 jobs since March.

William Bailey, professor of family finance at the University of Arkansas, said households who have to settle for part-time employment over an extended period will likely compromise their ability to save for a home or retirement.

“This really is not a new phenomenon. Some industries like retail and food service have always hired more part-time workers, and while they may offer health insurance or retirement options, the lower wages and 30-hour work week do not provide sufficient income for the worker to take part in those benefits,” Bailey said.

Sophia Koropeckyj, managing economist with Moody’s Analytics, said it’s not usual to see part-time jobs grow faster than full-time given the economy is languishing in recovery mode.

“When an economy is moving slowly, those sectors that are less productive like retail and food service have to add more people. The only way they meet the growing demand is to add people. But, because they typically pay lower wages it’s not as expensive to add them,” Koropeckyj  said.

She said there are several factors at work which has part-time employment growing ahead of full-time.

“The number of folks working more than one job continues to rise and we don’t think that will change anytime soon,” Koropeckyj said. “If they could find one higher paying job they would take it, but until then they will have to moonlight.”


FREELANCE BY CHOICE
Independent economist Jeff Collins said there is a growing number of younger folks who actually prefer to freelance on a part-time by project basis. These are people who are not looking for full-time work.

“These freelancers are often skilled technology engineers that have good job security given the demand for their talent. They command higher wages and often work on a project basis with many different employers,” Collins said.

Wal-Mart is one of the local companies that employs vast numbers of technology freelancers on a project basis. Rockfish Interactive also uses a number of freelancers. Collins said the freelance model makes sense for some businesses, particularly in the area of technology as there is often a talent shortage.

Jason Long owns a small retail consultant firm in St. Louis and said as a small business he prefers to hire some of the services he needs, such as website design or accounting, on an outsource basis.

“It just makes sense for me to outsource certain duties or employ specialists on a contract basis. This allows my business operations to stay nimble,” Long said.

CAUTIOUS ATTITUDE
Collins said it’s too soon to draw the conclusion that the growth in part-time jobs is directly related to the expanded health care law, and he agreed with Koropeckyj that there are also a number of employers who need to bring on extra help with minimal strings as they are still cautious about the economy.

“It’s easier for a company to use temporary staffing or part-time workers to fill an immediate need, and it’s less cumbersome to cut those ties if they should have to pull back in the future,” Collins said.

Georgette Ferus, district director for Staffmark in Bentonville, said she has not seen an abnormal rise in the number of permanent part-time positions yet. But, she has a fair amount of short-term or contract work openings at this time.

“Many of those positions are seasonal as retailers gear up for the holidays. We have warehouse positions and other logistics jobs to help with inventory increases for the holidays,” Ferus said.

A search on the internet job site indeed.com shows numerous opportunities for part-time employment in Northwest Arkansas and Fort Smith within the areas of freight, higher education, retail, medical, clerical, technology, government and nonprofit organizations.

Ferus said employers are still using staffing services to meet added demand because of the deep cuts they made several years ago in their own employment numbers.

LONG-TERM IMPLICATIONS
None of the economists contacted for this story believe the rapid rise in part-time employment will continue indefinitely, but they do expect the numbers to remain elevated as companies usher in the Affordable Care Act, of which some key provisions have been delayed to 2015.

Koropeckyj said while it may be difficult to imagine a thriving economy at this time, she doesn’t believe the slow growth periods of the past three years will persist for over decades. She said there are long-term risks associated with those folks who work multiple half-time jobs over an extended period when they can’t find full-time work in their trained field.

“Employers could be more apt to hire fresh college graduates for those better paying full-time jobs once they open up. I can see employers passing on candidates who have worked outside their field of study because those skills may be rusty,” Koropecky said.

She said there have been studies that show college students who seek jobs after graduation during a down economy earn less money over time than those who graduate during a healthy economy. That is largely because they are forced to accept lower-paying jobs in unrelated fields and it’s much harder for them to move up when the economy does improve.