Fed ponders surge in part-time jobs

Role of health-care law questioned; Bernanke says 'it's hard' to know
2013-07-22T00:00:00Z Fed ponders surge in part-time jobsBloomberg News Bloomberg News Arizona Daily Star
July 22, 2013 12:00 am  • 

Bailey Brewer, 28, is a writer with a graduate degree in journalism. She's been employed since the start of the year as a temporary office worker, unable to find a full-time job.

"The part-time thing, I'm really grateful for the work, but it's also really frustrating because nothing is renewable," Brewer said. "I want to feel settled in Los Angeles."

Brewer isn't alone. The number of workers holding full-time positions fell in the U.S. in June as the numbers of part-timers hit a record after rising for three straight months, according to the Bureau of Labor Statistics household data. Part-time employment has outpaced full-time job growth since 2008. Economists cite still-tough economic conditions as the root cause, with some saying President Obama's 2010 health-care law exacerbates the trend.

Federal Reserve Chairman Ben Bernanke told a House committee July 17 that policymakers consider underemployment, which includes part-time workers who want full-time jobs, one of the gauges of labor-market strength.

The number of part-time employees in June rose by 360,000, the Bureau of Labor Statistics reported, based on its survey of households. Full-time workers fell by 240,000, erasing much of the gains from April and May. The share of Americans who work part-time for economic reasons, meaning they can't find full-time jobs or because their hours have been cut, is 78 percent higher than in December 2007, when the 18-month recession began.

"It's hard to make any judgment," Bernanke said when asked if the Patient Protection and Affordable Care Act's mandates are slowing the economy.

Bernanke said that it has been cited in the economic outlook survey known as the Beige Book, which the Federal Open Market Committee considers in assessing the economy.

"One thing that we hear in the commentary that we get at the FOMC is that some employers are hiring part-time in order to avoid the mandate," Bernanke said. He added that "the very high level of part-time employment has been around since the beginning of the recovery, and we don't fully understand it."

Studies by Federal Reserve Banks in Philadelphia and Minneapolis show only a small portion of respondents say they have changed their workforce structure because of the health-care law.

The law requires employers with 50 or more full-time-equivalent employees to provide benefits to those who work at least 30 hours a week, or pay a $2,000-per-person fine.

The Obama administration said this month that it would give businesses an extra year to comply with the mandate, which was to take effect in 2014, while it aims to streamline reporting.

The high number of part-time workers is "primarily an issue of labor demand: we have a weak economy," said Elise Gould, director of health policy research at the Economic Policy Institute in Washington, which receives about a quarter of its funding from labor unions.

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