Jul 18 2014
The economy is technically recovering from the recession, but Mort Zuckerman pointed out in the Wall Street Journal why it doesn’t feel like much of a recovery: It’s because so much of America is working part-time.
“Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.
“On July 2 President Obama boasted that the jobs report ‘showed the sixth straight month of job growth’ in the private economy. ‘Make no mistake,’ he said. ‘We are headed in the right direction.’ What he failed to mention is that only 47.7% of adults in the U.S. are working full time. Yes, the percentage of unemployed has fallen, but that's worth barely a Bronx cheer. It reflects the bleak fact that 2.4 million Americans have become discouraged and dropped out of the workforce. You might as well say that the unemployment rate would be zero if everyone quit looking for work.
“Last month involuntary part-timers swelled to 7.5 million, compared with 4.4 million in 2007. Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill. Federal Reserve Chair Janet Yellen had it right in March when she said: ‘The existence of such a large pool of partly unemployed workers is a sign that labor conditions are worse than indicated by the unemployment rate.’”
President Obama appears at West Wilkes High School in Millers Creek, N.C., on Oct. 17, 2011, during one of his many attempts to appear as if he were doing something about jobs. White House photo by Pete Souza.The signs of weakness are plenty. Teenagers, for instance, are seeing the worst summer-job hiring in several years. This is the result of economic growth less than half of what is normal. But, Zuckerman points out, there are specific policies that contribute to the trend toward Part-Time America:
“Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more. The unintended consequence of President Obama's ‘signature legislation’? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.”
The president and his Democrat supporters say they meant well in passing Obamacare. Maybe so, but what matters aren’t their intentions but the results, intended and unintended. Washington owes it to America to examine the results of programs and to try evaluating whether new programs might have similar results.
Obamacare raised the cost of employing people full-time. The president proposes making employers pay wages for low-skill jobs far above what markets say the jobs are worth, an idea that the non-partisan Congressional Budget Office says will cost as many as a million people a job. Already, we’re seeing some employers experimenting with how to hire fewer employees.
McDonald’s, for instance, is trying a system that lets customers order ahead by cell phone:
“The phone will then display the customer’s order number and once their items are ready the customer picks up the items without waiting in a line or interacting with a cashier.”
This is convenient for customers, but it also means fewer jobs manning a cash register.
The Wisconsin-based mattress retailer Penny Mustard, meanwhile, says it is toying with the idea of stores that have no employees, only mattresses and a chance to order online. Maybe this is the future, maybe not. It may mean fewer jobs or maybe just different kinds of jobs. The point is that employers do not hold still. They react in sometimes unforeseen ways to the business environment, including to the changing costs of employing people. When government adds to the cost of employment, it isn’t just employers who pay, but people who are left trying to find a job.