Monday, August 5, 2013

Part Time Workers

There has been chatter of changes in part time vs. full time work, as a result of Obamacare.  I previousy thought it could be a factor in the labor market, but I have grown skeptical.
Today, there was an article at, that was pushing this idea, again.  It included this graph:

So, I went to the bls beta site to see what I could find.

I was able to download unadjusted monthly employment data for non-agricultural hourly workers for several levels of weekly hours worked.  Here's what I found.

First, a long term look at employment levels.  Several characteristics of the data are apparent:

1) Cyclical patterns are almost entirely limited to 40+ hour workers, and mostly to 41+.

2) This is from the current population survey, so it's very noisy from month to month.

3) Part time work is very seasonal, and the seasonal pattern appears to have flattened in some of the series, which might be making even year over year comparisons difficult.

4) If anything, part time workers appear to be declining from trend in the most recent period, and since these have a very linear historical behavior, anomalies from the trend should be easy to spot.

5) I don't know the explanation, but the demographic and cultural factors that have created that humped shape in labor force participation over the past 40 years don't seem to show up in the part time series at all, and don't appear to show up much in the 40 hour series, after cyclical adjustments.  I wonder what could explain such a dichotomy.  I would expect overtime work to be cyclical, but I'm surprised at the linear behavior of the other series.

6) Even before Obamacare, I would have expected growing non-wage income to lead to a bifurcation of workers pushed into overtime and workers kept at limited part time.  I take this as yet another data set implying that workers really do get what they want in labor markets.  The stories in the papers bemoan stagnating wages.  I think this graph could be interpreted as saying that workers prefer 40 hour work weeks, and are willing to accept lower cash income to stay at 40 hours.  I would expect employers to prefer 41+ hour employees, in order to reduce the costs of benefits such as health care, and I would expect workers anxious for cash to prefer 41+ hour work.  Furthermore, the reduction in hours worked and stagnation in earnings is not coming from a surge of employees stuck in part time, but it looks to me like it's coming from cultural changes that cause the work week to top out at 40 hours.  I am surprised by these trends.

Bonus note #7)  The recurring theme of demographics: This is another big flashing sign that demographics have a lot more to do with the expansion of the 80's and 90's than the causes that we tend to toss around.  With a 50% increase of 40+ hour workers in 20 years (from boomers hitting middle age and women entering the workforce), we would have really had to screw things up to keep from having strong economic growth.  Interestingly, there are two significant periods where 40 hour workers declined.  One was in the recent downturn, as part of a decline in all full time workers.  But, the other was in the 90's, and appears to reflect conversion of workers to 41+ hour weeks, reflecting the strong economy maxing out its labor force.

What if we look a little closer at recent trends?  Here is more recent behavior, in the YOY change of each category.  Again, mostly what we see here is that the CPS is a noisy data set.  Any claim of a trend from this data using just a few months is going to be bogus.  The decline of full time work during the recession, and some countervailing increases in part time work during that time are clear.  Since then, it looks like standard labor recovery behavior.  No unusual increase in overtime and part time workers.

The employment levels over this time frame also look pretty typical.

The employment levels during the last business cycle look pretty similar except that the trends in full time employment were stronger.  Unemployment didn't take nearly as big a hit in the last cycle:

Could we be looking at multiple job holders?  Here is series LNU02026619, multiple jobholders.  Now, the subset of this series that includes workers with two jobs that are both part time is rising, but it's been rising since 2002:
The takeaway: It's WAY too early to claim that Obamacare is pushing workers into part time work. 
And, it's funny that this is such an unpopular thing to say, but the labor market might just reflect the demands of workers as much as it reflects the demands of employers.  Maybe we're not seeing workers shunted into categories that are convenient for employers because labor markets don't work that way.

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