Michael Carty
The latest labour market data from the Office for National Statistics (ONS) brought some welcome news: unemployment has fallen; the youth unemployment rate has fallen back below the so-called “million milestone.”
However, closer analysis of the data suggests that we are seeing an ongoing change in employment patterns in the UK, with part-time work in particular showing very strong growth. As we recently noted, changing patterns of employment could be argued to be placing many UK workers in an increasingly less secure position.
This trend towards a strong rise in part-time work would also appear to be present in latest US labour market data.
So could it be the case that both the US and the UK are ‘going part-time’ in 2012? And what implications could this have for job security and for economic recovery on both sides of the pond?
Rise in part-time work contributes to record UK employment level
In the UK, mployment levels are on the rise:
- “The number of people in employment [at 29.59 million] has not been higher since comparable records began in 1971,” says ONS.
This strong growth in the number of people in employment was driven in the largest part by the rise in part-time employment. ONS reports:
Between March to May 2012 and June to August 2012: the number of people in full-time employment increased by 88,000[; and] the number of people in part-time employment increased by 125,000.
UK economy has added twice as many part-time jobs as full-time jobs since 2007
Indeed, longer-term analysis from ONS reveals that the UK economy has added more than twice as many part-time jobs as full-time jobs over the past five years:
Between June to August 2007 and June to August 2012: the number of people in full-time employment fell by 355,000[; and] the number of people in part-time employment increased by 724,000.
‘Slack business conditions’ lead to sharp rise in part-time work in US
This trend towards a rise in part-time working is also evident in the US.
The latest US data show that “582,000 Americans took part-time positions because of slack business conditions,” Bloomberg reports.
‘America is going part-time’
“America is going part-time,” says Moira Herbst of the National Employment Law Project.
She argues that this trend in the US towards “the creation of more part-time jobs, many of them low-wage, taking the place of solid middle-class careers” is “more structural than cyclical.”
The rise in part-time working is eroding both job security in the US and the status of women in the US labour market, says Herbst:
Offering part-time work – or even full-time jobs masquerading as freelance gigs – allows companies to offer stingier benefits packages or none at all. [...] Benefits aren’t the only problem. Workers desperate to work full time now may also be sentenced to a lower-wage fate in the future. According to a recent study by the Johns Hopkins Institute for Policy Studies, women who work in part-time jobs have fewer training opportunities and are less able to advance and increase their pay over time.
The rise in part-time working could also be hampering economic recovery, in Herbst’s view:
The irony is that companies seeking to cut costs are sabotaging their own bottom lines by offering unsteady employment. People working part-time involuntarily have less money to spend on goods and services, and are less able to stimulate the economy. It’s a vicious cycle.
Herbst’s observations could be argued to be equally applicable to the UK labour market in 2012.
Both the UK and the US would therefore appear to be ‘going part-time,’ with potentially widespread implications for their respective economies and workforces.
UPDATE 1 (Friday 2 November 2012): ‘If you follow the US path you will see a reduction in median wage growth.’
I’ve had a very interesting Twitter response to the subjects discussed in this post from Shane Granger, author of the excellent Random Analytics blog.
Shane notes that wage growth in the US has shown a downward trend over recent years:
If you follow the US path you will see a reduction in median wage growth. US median wages decreased 10% since 1999 peak $54K peak
Shane has also very kindly shared a link to an article from the Economist, which goes into greater detail on these figures: Income stagnation: Stagnation by way of the Midwest.
Shane references these figures in the following post on his blog: Romney’s Promise.
The Economist article says:
The real income of the median household peaked in 1999 at $54,932 and has since fallen back to a level first attained in about 1996–over a decade and a half without a real income gain. [...] Summing over regions, however, it becomes clear just how much of the country’s recent poor income performance can be chalked up to trends in the Midwest. From 1999 to 2011, the real median income dropped almost 9% for the country as a whole. In the Midwest, the decline was 16%. American households have had a rough decade or so, but the national statistics often obscure how much of that pain was focused on just one region of the country.
UPDATE 2 (2 November 2012): More than eight million US workers working ‘part-time for economic reasons’
The US unemployment rate has shown a slight fall (from 7.9% in September 2012 to 7.8% in October), according to today’s data release from the Labor Department, the BBC reports.
The BBC says:
The US economy added 171,000 new jobs in October, which was much more than had been expected. [...] The number of jobs created in the previous two months was revised upwards, with an extra 34,000 jobs added in September and 50,000 added in August.
However, this latest data release from the Bureau of Labor Statistics also reveals that well over eight million US workers are working “part-time for economic reasons.”
In total, 8,344,000 people are working “part-time for economic reasons.” This breaks down as follows: 5,219,000 are working part-time due to “slack work or business conditions,” while a further 2,614,000 “could only find part-time work.”
UPDATE 3 (Tuesday 6 November 2012): ‘Funny how…’
As the day of the 2012 US presidential election arrives, here’s a quick update with a pithy tweet from yesterday by economist John Philpott:
Philpott says: “Funny how Romney slams underemployment in US whereas centre right here talk up part-time Britain as a sign of economic success.”
Do you hold with either of these views? Please get in touch and have your say!
- Thank you to Mervyn Dinnen for alerting me to John’s tweet on this topic.
See also:
- XpertHR economic commentary November 2012: Coming up for air
XpertHR’s November 2012 economic commentary rounds up the latest data on key economic measures of relevance to HR professionals and reward practitioners, including: economic growth; inflation; pay awards; average earnings; and unemployment.
- Is the rise in part-time working ‘a good thing’?
“The increase in people working part-time is a good thing,” says Recruitment and Employment Confederation (REC) Chief Executive Kevin Green. XpertHR weighs up the case for and agaist this proposition.
- Changing patterns of employment & employment law reform: A double whammy for UK workers?
UK workers face a double-whammy in 2012. Changing patterns of employment and the impact of the Coalition Government’s ongoing programme of employment law reform mean that many UK workers find themselves in an increasingly less secure position.
I know when I was in corporate life, part time team members were often seen as ‘not as important’ as their full time colleagues, despite the fact that they did exactly the same job, just not for so many hours.
However, this changed when we got into support function ‘white collar’ roles. Three members out of five of us in the Learning and Development team were part time.
I remember suggesting that we should offer training opportunities to those who worked evenings, and I was told that if I wanted to do that, it was fine, but not to expect anyone else in the team to do it!
Goodness me!
What happened next (as regards the training opportunities for part-time workers)?
And how prevalent do you think that the view that “part time team members were often seen as ‘not as important’ as their full time colleagues” is in the economy at large?
Thank you for taking the time to post such an interesting comment, sir.
Canada has certainly seen a similar shift to part-time employment and an upswing in ‘freelance’ work. Perhaps digging a little into the layers will tell an interesting tale.
Some people prefer part-time or freelance work as it provides some income while they pursue other interests (creating their own business; a career in hard to get a break industries such as the entertainment field; post secondary education etc.)
Some people retire, realize they miss certain things about the workplace, so return part-time.
Some people want more control over their time and freelance or part-time work can offer that.
Some people are not sure what they want to do and part-time work offers experience and the opportunity to try different things.
If the numbers showed us how many part-time jobs were the preferred choice vs. “all that is available” I wonder how different the picture might be.
I think there is also a tendency to paint a picture of corporations using this tactic to lessen the cost burden of benefits, yet some corporations are offering fairly generous benefits to part-time staff now so it would be interesting to see numbers on that to see the ratio between lost benefits vs. gained benefits.
I know it is more fun to pose either/or scenarios but it is more useful to dig deeper and see what is really happening.
It’s so great to hear from you, Karin, and thank you for the excellent, thoughtful comment.
It’s very interesting to hear that Canada has seen a similar shift toward part-time employment together with a rise in ‘freelance’ work.
You are entirely correct that this is a complex and nuanced topic, and that there are many positives that can be associated with part-time work.
And I agree wholeheartedly that the key factor here is whether or not part-time work is the preferred choice for the individual, or “all that is available.”
By coincidence, just as your comment came in, I was adding Update 2 to this post, which looks at todays’ BLS data on the US labour market. The BLS data include some interesting breakdowns on the numbers of US workers who are working part-time “for economic reasons.”
If anybody out there knows of any datasets on “the ratio
between lost benefits vs. gained benefits” mentioned by Karin here, please do get in touch with a link!