The Grand Illusion
A number of our friends, acquaintances, and even at least one relative are victims of the new discrimination. They include a university lecturer, a Walmart employee, a professional classical pianist, and a daughter who works with the disabled… and there are millions of Americans like them. Who are they? They’re the part-timers, the nearly thirty million plus Americans who work less than full-time, the majority of whom do not receive benefits, particularly health benefits. And the number of part-time employees in American business rises every year, so that part-timers are approaching twenty percent of the workforce.
More disturbing than this is the fact that, according to the Bureau of Labor Statistics (BLS), almost all the increase in part-time employment since 1969 has been involuntary, in that employers have only offered those additional jobs as part-time, and in the majority of cases, employers are creating multiple part-time jobs rather than fewer full-time positions. There’s an economic rationale behind this, as shown by a 2012 BLS study that indicates full-time employees’ average hourly pay is some 60% higher than that of part-timers.
Over the past ten years the number of part-time jobs has doubled, while the number of full-time jobs has decreased by around nine million positions. Even the current “positive” numbers in the decline of joblessness mask the fact that full-time jobs are continuing to decline, while part-time jobs are increasing at a rate faster than the decline of full-time positions.
Much of this change in the composition of employment is the result of computerization and statistical managing, because better data and software allow employers to use only the staff they think they need, and with the emphasis on profitability and the cutthroat nature of retailing in particular, the costs of fluctuating demand fall almost entirely on the part-time employees, rather than on management or permanent full-time employees.
In addition to financial costs, the increasing reliance on part-time employment creates stress and uncertainty among the part-timers. For example, a 2011 study of retail establishments in New York City showed that fifty percent of employees were part-time, and only about ten percent of the part-timers had fixed schedules on a week-to-week basis. The other problem with this increasing “management efficiency” in managing labor costs is that it makes it harder and harder for part-timers to cobble together two part-time positions in order to make ends meet because there’s less and less certainty in when they will work and for how long. This impacts everything from what they can afford to dealing with children and childcare.
While there’s a perception that temporary and part-time employment is largely confined to the retail and service industries, and to people without advanced training and education, that’s a complete misconception. Despite the growth of colleges and universities, and the increasing number of students graduating, the faculty composition over the last generation has shifted from being roughly 70% full-time to almost 70% part-time (or adjunct faculty), and with the passage of the Affordable Health Care Act, most state colleges and universities will have to either reduce the hours that existing part-time faculty teach and hire more, and likely less qualified adjuncts, if they can find them because the total compensation will decline, or add more full-time faculty, which the states cannot afford to fund. This same problem will also affect hundreds of thousands of businesses as well.
Temporary employment in jobs requiring technology, business, computer, and other higher education skills has almost tripled in the last 30 years, and the temporary staffing and employment field was the largest growing employer segment in the United States over the last three years. More and more businesses are laying off full-time skilled people, but hiring them, or others, back part-time as consultants.
The bottom-line? American business – and higher education — will do anything to minimize labor costs, and that means – unless government gets more involved in labor policy and regulation – that more and more American families are going to see either a stagnation or a reduction in their real standard of living. This has enormous implications for everyone, not just for those part-time employees.
What business and the politicians don’t seem to realize is that, as they move to a more “efficient” part-time workforce, there will be fewer and fewer full-time employees, and given the cost –pressures, and the threat of replacement by part-timers, even the full-time employees will be, and are, except for top management, compensated at a lower “real” level. Both full-time employees and especially the growing ranks of part-time employees will have less and less money to spend on the goods and services that they provide. Consumer demand over the past five years has been supported by a level of government borrowing that cannot continue indefinitely, or even for more than a few years. The only people immune to or insulated from this down-sizing of real income will be a comparatively small number of individuals with skills or positions of power.
Yet, the process of each business maximizing its labor “efficiency” results in a diminution of overall baseline purchasing power… and, unless the question is addressed on a society-wide basis, could result in an economic death spiral… if the social unrest created by the results of such headlong pursuit of “employee efficiency” doesn’t result in violent political upheaval first. We’re already seeing signs of this in the growing support for Obama’s position on taxing the top two percent, because what most people don’t realize is that this is the first time ever in American history that a majority of the people have been in favor of tax increases on the well-off.
Will anyone in power really read the handwriting on the wall?
I do not believe they will. All focus, whether here or elsewhere( look at Europe) is on the immediate future, not the long term. Planning long-term requires real thinking, not just slogans; which is complicated work. As witness, the Republicans in Congress are against anything the Democrats want, but offer no details of what they do want!
Clearly the government needs to mandate:
1. Companies may no longer seek to be efficient.
2. The real standard of living must go up for everyone, always.
“Yet, the process of each business maximizing its labor “efficiency” results in a diminution of overall baseline purchasing power…”
What? The growth of part-time workers has *not* diminished baseline purchasing power. The process you are trying to name is called “inflation.”
Math is hard.
Cut spending! That is the long-term solution. And yes, it will lead to recession, which we are already in again anyway, but I agree with Thomas R. that we need long-term thinking instead of short-term (1 month) fixes [“tax the rich!”].
Take a look at the data from the Congressional Budget Office showing spending (“outlays”) since 1972 to present.
http://www.cbo.gov/publication/42911
At 40 years old I have been hearing about how Reagan was a master at the budget. The numbers don’t support it. He didn’t start the train wreck but he sure as hell sped it up.
Clinton supposedly did terrible things when he worked with Congress to reform welfare and raise taxes (to pay down the debt). For his troubles we see that we actually had some small surpluses in 1998 and 1999.
In 2000 and 2001 we also show some small surpluses. Bush was lucky that he inherited such strong revenue from Clinton.
What you do *not* see anywhere in that data is any sequence of years where the government *spent less money* than the year before. We have not had a single “budget cut” since at least 1972. I tried to get data from the OMB but that .gov website is not responding.
What we do see is that the annual deficit is now larger than the *entire US outlay* for the year 1993 in 2009. 2010 and 2011 are superficially better.
Yeah, I’m pretty sure we’re in a tough spot now because corporations are shifting more work from full timers to part timers.
Adjunct teaching, what fun. Some ten years ago I taught freshman chemistry at a local community college on an adjunct basis for several years. I was paid on a per section basis 40% less than a full time faculty member. The real kicker was the year, two full semesters, in which I taught the same class load as a full time faculty member, but was paid at the adjunct rate.
I misspoke. I was paid 60% less. I made 40% of a full time instructors per class pay rate.
Creme, I like that you took a post about business practices and used it to tangent into Government spending. Interesting.
Mr. Modesitt is right about companies though, too many only care about the short term. The one I work for is an exception. It pushes for FTE’s, it provides benefits, it doesn’t take stupid risks and a member of it’s leadership has often said he’d rather us be like Target than Tiffani’s or Walmart, appeal to everyone and support them as opposed to being upscale or gauging the poor. Our CEO is still rich enough to own a private Island.
And this company is considered weaker than its competitors, always has been, when we didn’t need bailout money and everyone else did our stock was still lower than our competition. When other companies suffered massive lay-offs and we went and aquirred new businesses and expanded, we were still considered the little guy.
It kind of says something about our society’s view that the slightly smaller, but better run and more compassionate company is considered inferior to the bigger one that squeezes every dime they can and pushes every loophole possible.
Ryan Jackson wrote, “Creme, I like that you took a post about business practices and used it to tangent into Government spending. Interesting.”
Yes, it is interesting. You appear to think that businesses operate in a complete vacuum and are not heavily influenced and incentivized by government laws and regulations. Businesses also make decisions based on prevailing economics; when gov’t is running trillion dollar deficits it is fair to say that those economic conditions will impact business decisions.
Right?
It sounds like the company you work for has made some good decisions. Don’t you think the company should continue to be *free* to make those decisions? Or should we institute a few new laws/regs/rules and take that decision away from them?
Creme, that they’re not in a vacuum doesn’t change that you derailed the original point for your own.
As for my company staying “free”. I find that laughable. Every law that’s come out that’s supposedly going to clamp down and deny freedoms to a business has done… Nothing to us. We’ve always been a very conservative and compassionate company and as such every time a law comes out we usually can look at it and say “Wow, we pretty much already do all of this because it’s the right thing to do.” and then move on with barely a hiccup. A great example of this is the CARD issue that passed a year or so back. Supposedly all this vicious damage to the credit industry in the name of protecting the consumer and our company’s response was… To alter our accounts to no longer allow people to go over their line of credit and as such not be charged over limit fees. Literally nothing else changed for us. We didn’t lose revenue, we weren’t constricted by it. We made a single adjustment and continued on being successful.
When the supposed clamping down of business freedom doesn’t affect the moral companies I find it hard to be deeply concerned.
For that matter I’ve always been one to see things more along the lines of privelages than rights. A company mistreats its employees and does things like so many have. Like this Part Time issue shows. I’m personally alright with them getting stamped out. The smart ones will adjust to be less cruel, selfish and short-sighted. The dumb ones will be replaced.
“Creme, that they’re not in a vacuum doesn’t change that you derailed the original point for your own.”
No, I didn’t derail anything. You cannot look at this issue of part-time vs full-time workers as something that companies have just up and decided to do because they want to fuck over their workforce. The economic incentives have given them plenty of reason to make these changes without resorting to the company being “evil.” Instead of regulating business so that it cannot use part time workers, why not look at the reasons they are doing so? Look at the incentives.
But let’s instead use the boot heel of the State to stamp out these companies that are doing nothing ethically or morally wrong (regarding part time versus full). Thank you for being so clear about where you stand. Your suggestion will result in lower employment. Nice work!
What’s the great company you work for? I want to invest in it. (I know you don’t speak for them, you speak only for yourself, blah blah.)
When I was an undergraduate in college all too many years ago, one of my professors postulated the “iron law of responsibility,” and pointed out that in any democratic society any organization that failed to lived up to its responsibilities would eventually have society reduce its capabilities so that it no longer had the power to avoid those responsibilities. We’ve tended to see this happen in the industrialized world, and yet there are still those in business who claim that the only responsibility is to their shareholders… and not to their workers or their society. Obviously, society as a whole has a problem with this, as reflected by the growing regulation of business.
I only wish that “law” applied to government as well. It fails us at every level yet we never seem to pull it back in line.
Just as a note. That last comment pretty much made your entire arguement look like a case of arguing Two Wrongs make a Right.
Just because there’s a problem in one area doesn’t excuse responsibility, duty, or a simple issue of Doing the Right Thing in another area.
Your points may or may not be valid, as I mentioned earlier, this isn’t the forum, nor is it even the topic. But your points don’t actually change or in anyway Justify what Mr. Modesitt brought up.
Again, that even one company can operate with integrity, ethics and compassion and still be wildly successful is proof that the others could too, they just don’t want to.
It doesn’t matter that they use the excuse of “The other guy doesn’t have to, so why should we?”
The social contract is failing. As you pointed out in Adiamante, corruption breaks trust, and when people lose trust, societies collapse.
We no longer trust our banks (financial crisis), our politicians (who want to steal the services we paid for calling them entitlements and are unable to fix the banks) or our business leaders (who just want to increase the bottom line with little regard to their employees’ welfare, or even long term corporate profit). Doha demonstrated our “representatives” are unable even to agree to avoid increasing planetary temperatures by 6 degrees centigrade.
This phenomenon is not constrained to the US. In Europe even highly educated youngsters can only find temporary jobs or internships. To many University education appears a questionable investment. And in the US, there is a clear trend of downward educational mobility. This is ironic since competing in the international job market will require even more understanding of science, math and computing.
History suggests little change until the built up stresses cause an earthquake. Then our choices will be fascism/world war or revolution depending on whether or not the elites manage to divert the public’s attention from themselves. The rise of Golden Dawn in Greece suggests they’ll try to pull another fascist putsch.
Long term, the brain drain will no longer flow to the US/Europe but elsewhere. Although Asia is the commonly assumed destination, it seems that more Europeans today are relocating to Latin America, in particular to Brazil.
It’s clearly a flaw in the law if responsibilities given to the employer can be chucked aside so easily but it is in no way something new. It’s been going on for a long time just now more companies appear to be utilizing it for that specific reason which makes the injustice stand out more. Besides percentage based coverage (40 hours for an employee= 100%/ 20 hours for 2 employees = 50% and 50% which is the equivalent)I don’t know what could be done. And even that method appears to have flaws.
No matter what the government does it’s relatively pointless if better trade tariffs are not applied to the parts of the world that do not follow suit.
Tariffs just aren’t talked about enough these days. Stupid free trade costs too much.
-rehcra
Ivory Towers and Aristophines.
I own a small business. We have contracts with larger businesses. The small corp is set up to finance our insurance, retirement, and our continuing ed. My employee (who happens to be my wife) and I have arranged things so she only has to work 2-3 days a week and I work 12-14 12 to 14 hour shifts a month for the contractee.
It limits our income some, but it leaves us with flexibility to take care of our small children and when they’re able to drive and assume some responsibility, we can expand our hours. And if the contracts lapse… then our jobs are such that we can find work most anywhere in the U.S., provided we are willing to relocated.
To do this, we paid our dues in ‘the rat race’, we spent plenty of time getting doctoral and post-doctoral work and then digging out of the financial bottomless hole that is government financial aid for college, and we take the time to keep up with the cutting edge tech and science of our work. We have enough money to live comfortably, put away money for college and retirement, and not lack for anything.
My ‘Iron Responsibility’ is fulfilled to my children, who I can watch grow up; to my wife, who has a career she loves and financial security; and to myself in having a job that society needs and demands and that I find challenging without getting burned out.
One note: my job is such that I am MANDATED by the government to take care of people who cannot pay for my services or can refuse to pay for my services and still be entitled to them. Under the new regulations, my job will become more difficult. I may choose to work even less when “Obamacare” is rolled completely out.
Part time and loving it.
To Wine Guy (appropriate as I drink an excellent Chablis). I have worked with many people in large corporates who were paid for full time employment yet seemed to deliver only a part time commitment. Your statements are valid and are to be applauded.
@ Tim: I’ll try most any wine once. Many of them twice… and the ones I really like I’ll buy a half-case or case. Lately, I’ve been on a Cab-Syrah kick. Washington and Oregon have some excellent vinters.
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There are two problems with part-time employment:
1. The employers don’t see them as real employees.
2. The employees don’t see themselves as real employees.
Thus, #1 is not invested in the future of #2…. and #2 is not invested in the future of #1. Economic efficiency has sacrificed commitment and loyalty… and it goes both up and down the hierarchies of management.