Full-Time Work Disappearing in California - Obamacare contributes to Trend
It should be noted that the federal health care legislation, the Patient Protection and Affordable Care Act (PPACA), as it is now structured, is likely to contribute to the move to part-time employees. It places requirements on employers for health care coverage of workers over 30 hours per week that are more stringent than requirements for part-time workers.
Earlier this month when the national unemployment numbers were announced, most of the California media put forward an upbeat narrative of continued job recovery, noting the national unemployment rate number (7.9%, still below 8%) or the payroll jobs number (gain of 171,000 jobs).
At KPIX-CBS, Channel 5 in the Bay Area, Ms. Sandra Lee, the executive producer for special projects, focused instead on one of the key dynamics behind these numbers, the increase in part time work. The brief segment below is worth watching alone for the strength of the main job seeker, Ms. Karen Jones, 52. Ms. Jones does not complain that she has sent out over one hundred resumes, and received few acknowledgements, to say nothing of interviews. She is upbeat about starting a part-time job at the Converse store in a new Livermore mall. One of the untold stories of the Great Recession is the resilience of the California workforce.
At Fox and Hounds, we have written several times over the past few years on the changing structure of work in California, including the replacement of full-time payroll employment with independent contracting, outsourcing, and part-time employment. The part-time employment is growing in all sectors, not only retail and hospitality.
In October 2012, 8.3 million workers in the United States were involuntarily working part-time. This was actually down from the 8.6 million part-time workers in September, but far higher than the 3.9 million workers involuntarily working part time in April 2006.
The retail sector in California long has made use of part-time employment, and technology and cost pressures have increased this use. Steven Greenhouse, the labor reporter for the New York Times, recently came to Spring Valley, California, outside of San Diego, and issued this thoughtful dispatch on the replacement of full time workers with part time workers in retail, “Part-Time Life, as Hours Shrink and Shift for American Workers”. As Mr. Greenhouse notes, the retail/whole sector nationwide seen its full-time job numbers reduced by over a million since 2006, while part-time jobs have increased by 500,000.
The disappearance of full time work is not limited to the retail sector, or to the hospitality sector—another sector that heavily utilizes part-time workers. It has spread among sectors in California and among occupations. Architects, finance managers, attorneys, information technology specialists, vocational counselors, along with construction workers and manufacturing workers are finding their hours reduced in attempts by companies to cut costs and reduce benefits. All of these workers are counted as employed for the monthly unemployment and payroll numbers. But their employment is not employment of full-time work with benefits.
Their part-time status usually is invisible in daily life as in the job numbers. Last Friday, a respected architect in his early 60s with a nationwide architectural firm, comes to discuss upcoming infrastructure projects. As he is leaving he mentions that he has been on part-time status for the past eighteen months. A public relations executive with over thirty years of experience is prominent on the firm’s website and classified as an employee, but is not paid unless he brings in projects. A job placement firm employs a group of vocational counselors, but these counselors are paid on a part-time basis only for cases handled.
It should be noted that the federal health care legislation, the Patient Protection and Affordable Care Act (PPACA), as it is now structured, is likely to contribute to the move to part-time employees. It places requirements on employers for health care coverage of workers over 30 hours per week that are more stringent than requirements for part-time workers. Already, several nationwide companies with major presence in California have announced movement to a greater share of part-time workers, including Darden Restaurants (parent company of Olive Garden and Red Lobster), and CKE Restaurants (parent company of Hardee’s and Carl’s Jr.).
To focus on the job numbers and cheer a job recovery in California is to miss much of what is going on in our job world—not the least of which is the decline of full-time employment with benefits.
Michael Bernick, Former California Employment Development Department Director & Milken Institute Fellow