Mort Zuckerman takes note of the dog in the manger of recent job reports:
The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn’t distinguish between new part-time and full-time jobs. 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.
While there may be a kernel of truth in his explanation:
There are a number of reasons for our predicament, most importantly a historically low growth rate for an economic “recovery.” Gross domestic product growth in 2013 was a feeble 1.9%, and it fell at a seasonally adjusted annual rate of 2.9% in the first quarter of 2014.
But there is one clear political contribution to the dismal jobs trend. 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.
Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be. It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers. Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities. In the process, they are losing critical time to develop workplace habits, contacts and new skills.
I don’t think it presents the complete picture. The great, largely untold story of the last several decades is the number of workers for whom total compensation has been falling.
The Obama Administration may have exacerbated the preference for temporary and/or part-time workers but it didn’t create it. Consider the graph above. That represents the growth in the number of temps from 2001 to 2012. Ebbs and flows obviously follow the business cycle but there’s one factor that jumps out of the graph: the number has always been growing. Even when the economy was shedding jobs at a furious rate the number of temps was increasing.
The reasons for that are clearly complex and include not only the PPACA but the many other regulations governing companies based on the number of full-time employees, the increasing dominance of large companies, and the lower total cost that temporary employees may represent.
The reality today is that the future of payrolls lies in flexibility and that will inevitably mean more temps and fewer full-time permanent employees. It might even be that in many sectors of the economy full-time permanent jobs will go the way of defined benefit pension plans and fully company-paid healthcare insurance. Policy needs to catch up with reality.