Oregon Office of Economic Analysis

A lot has been make of part-time vs full-time employment and with good reason. Hours worked were cut during the Great Recession and there have also been periodic claims that all the jobs being added recently are part-time, not to mention the potential impacts of the Affordable Care Act. In particular, the ACA does create two potential employment cliffs, if you will, one at the firm size of 50 employees and another at 30 hours per week per employee. The fear is that medium sized businesses will choose not to expand and add that 50th employee (or more) due to the employer mandate or businesses will cut back on the hours worked by their employees such that they do not work more than 30 hours per week. These thresholds are built into the law and to the extent they do impact the economy and labor market, it is or will be bad news.

With that being said, despite the anecdotal stories one hears, no such impacts can be seen in the employment data at the national level or here in Orego, or at least not yet. See the Wall Street Journal for an example at the national level. Here in Oregon, over 90 percent of the jobs added between 2009 and 2012 have been full-time positions, on net. This first graph shows part-time workers as a share of overall employment in Oregon and the U.S. Prior to the Great Recession, in Oregon 1 in 5 workers were part-time while  at the national level it was closer to 1 in 6 workers. The share of part-time workers increased substantially in the wake of the downturn and is only slowly improving since. [Thanks to Tracy and our friends at Employment for sharing the monthly data.]

Why did the part-time share increase? The lousy economy. The share of part-time workers for noneconomic reasons (typically can be thought of as voluntary — maybe they have childcare issues, are nominally retired, going to school, or other family or personal obligations, etc) has remained remarkably stable in Oregon since 1997 (annual data only here). The overall increase seen in the first graph is due to those working part-time for economic reasons (lousy economy, can’t find full-time work, seasonal fluctuations). The improvement in the Oregon share seen in the first graph is likely due to improvements in these part-time workers for economic reasons. That or it might be imperfect data and after the next round of revisions, the improvements will be revised away and the Oregon trend will look more like the U.S. trend.

Now, why does Oregon have more part-time work that the average state? One hears all sorts of claims about this but rarely are these backed up with any facts and truthfully, I do not have a great answer myself. The one obviously item to point to is that Oregonians work less hours than many of their counterparts across the country. Even in something like manufacturing, where we have a decided comparative advantage, we still work slightly less hours.

Outside of Trade, Transportation and Utilities and Financial Activities, Oregonians typically work less than the national average across all industries as seen below.

These facts and trends have various implications depending upon the reason for them. If we work less hours purely by choice, then there is largely nothing to worry about. However if we work less hours because we cannot find enough work, then we do have problems.

One of the most interesting pieces of information that has come out of the Value of Jobs Coalition research is the work they did on hours worked in Portland compared with other cities (for the good graphs scroll halfway down the page). In the 80s and 90s, Portlanders worked about the same amount as their national peers, however since then our hours worked have tailed off considerably. This also has big implications for our income levels and our ranking in such measures because we earn less per hour and we work less hours overall. The Value of Jobs Coalition’s 2013 Higher Education report is probably my favorite of the bunch given the great data work done on hours worked and the composition of our workforce, etc. I do suggest reading the whole thing for those interested.

Coming full circle, part-time work is not always a bad thing, it’s just bad when people are unable to find full-time work when they would prefer it. While we do not see any shifts in the economy thus far in terms of full-time compared to part-time work, it is something that we will be watching in the coming years. As the Wall Street Journal writes:

Of course, the so-called “employer mandate” under the health law doesn’t take effect until 2015, so it’s possible employers are simply waiting to cut hours until closer to the deadline. But there’s little evidence that they’ve started yet.