Half A Job: Bad and Good Part-Time Jobs in a Changing Labor Market

7. Cycles and Trends

Cycles and Trends 7 • THE RATE OF PART-TIME EMPLOYMENT RIDES A ROLLER coaster: it rises and falls with the unemployment rate, but after each recession over the last quarter-century, it has remained a little higher (Figure 7.1). It is involuntary part-time employment that propels the ups and downs, and recently the upward drift as well. In Chapter 2, we saw the beginning of an explanation for the long-term increase: the growth of industries that use part-time employment heavily and a strategic shift within industries toward wider use of part-time schedules. Later in this chapter, I shall complete this story of the long-term part-time expansion. But now it's time to turn an inquiring eye on the roller coaster's short-term fluctuations. To deal with the problem of involuntary parttime employment, this relationship between part-time work and the business cycle must be understood. After explaining why the conventional wisdom about this relationship no longer works, I shall draw on the interviews to suggest an alternative theory. In addition, in the last few years we have witnessed the disturbing spectacle of a roller coaster that refuses to come down again. Despite the economic recovery that officially began in March 1991, involuntary parttime employment continued to rise during 1991 and 1992, and has decreased relatively little since then. So I shall close by speculating about whether the cyclical pattern's nature has changed. Refuting the Conventional Wisdom The cyclical pattern of part-time work means that when unemployment rises, involuntary part-time employment does too. Analyses by Bernard Ichniowski and Anne Preston (1985), Rebecca Blank (1990), and myself Copyrighted Material 121 Q) (.) ~ .E .:.! ~ 0 ~ uj :j 0 c : Q) (.) ~ Q) a. 12 10 8 6 4 2 Unemployment Involuntary part-time 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 Year FIGURE 7.1 Unemployment Rate and Rate of Involuntary Part-Time Employment, 1956-93 Source: Unemployment rate from U.S. Council of Economic Advisors (1994). Involuntary part-time employment rate from U.S. Bureau of Labor Statistics (1988b), with additional data from the U.S. Bureau of Labor Statistics, based on the Current Population Survey. Copyrighted Material Cycles and Trends 123 (see Tilly 1989, Appendix B; 1991a) all estimate that if the unemployment rate climbs by 1 percentage point, the rate of involuntary part-time employment on average follows with an increase of about 0.5 point. The cyclical ups and downs of part-time employment have been studied most closely by Bureau of Labor Statistics analyst Robert Bednarzik (1975, 1983), who has suggested that the fluctuations are caused primarily by temporary hours reductions among normally full-time workers . But are they? The answer is no-or at least not any more. Hours reductions explain only a minority of involuntary part-time employment. Most involuntary part-time workers state that they usually work part-time, and do so because they are unable to find a full-time job. Figure 7.2 shows that such workers have made up the majority of involuntary part-timers since 1971 and that this majority has grown over that time. Ichniowski and Preston (1985) estimated the effects of the unemployment rate on the involuntary part-time employment of those who usually work part-time and those who usually work full-time, and found that changes in the unemployment rate triggered responses of equal size in both groups. Thus, only half of the cyclical fluctuations are due to changes in hours by workers who usually work full-time. Furthermore, much of the cyclical pattern comes from industries whose output and employment are not cyclical! Look at the roller coaster's swoop over the business cycles of the last 15 years. From a trough in 1979, involuntary part-time employment climbed until 1983, fell to a new low in 1989, and then rose once more to a 1992 peak. Trade, finance, and services accounted for 77 percent of the net rise in involuntary part-time jobs berween 1979 and 1983, 72 percent of the 1983-89 drop, and 91 percent of the increase from 1989 to 1992. But trade, finance , and services, unlike manufacturing and construction, are industries whose employment levels are little affected by business cycles. So the major part of the cyclical fluctuations of part-time employment remains unexplained. Do Changes in the Industry Composition ofEmployment Offer an Explanation? One possibile reason for...