Why the job market is better than it looks
True or false: Most of the jobs created during the sluggish economic recovery consist of part-time, not full-time, employment?
It's a critical question. Although the U.S. economy is slowly healing, millions of Americans have dropped out of the labor market, perhaps demoralized by a sense that good jobs -- or any job -- are nowhere to be found. Contributing to that view is the widely shared notion that in recent years the labor market has produced mostly low-paying part-time and temporary jobs.
But idea turns out to be false. Economist Julie Hotchkiss of the Federal Reserve Bank of Atlanta has found that since October of 2010, U.S. employment has grown by 8.2 million, and 7.8 million -- or fully 95 percent -- of those jobs are full-time (defined as 35 or more hours per week). In fact, in only four months over that time period did the growth in full-time workers not greatly exceed the growth in part-time workers.
Her findings dovetail with related research out of the Atlanta Fed showing that people who lost mid-level jobs during the Great Recession are today more likely to find higher skill, higher paying jobs than they were before the downturn. Of course, far too many of these workers still end up in lower paying, low-skill jobs, often in the service sector. But contrary to what many people believe, at least the trend is moving in the right direction.
It's worth noting that there was a period during the recession when the economy was adding more part-time than full-time work. That explains why the number of part-time employees remains abnormally high more than five years into the recovery. The high level of involuntary unemployed is of particular concern. These are people who would prefer to work more, but cannot find full-time employment.
But as Hotchkiss emphasizes, "in every month since August 2011, the increase in the number of full-time employed from the year before has far exceeded the increase in the number of part-time employed. This phenomenon includes all of the months of 2013, in spite of what some of the headlines above would have you believe."
None of which changes the reality that far too many Americans remain unemployed. The rate of job-creation, while steady, is far too slow. As of October, the share of the population ages 25 to 54 with a job was just under 77 percent, according to Labor Department figures. That's well below the level that prevailed before the recession started in 2007. Worse, at this stage it seems unlikely that the recovery will suddenly accelerate, bringing swift relief to the millions still waiting for the recovery to begin in earnest.
Still, while these realities must be recognized, especially by policymakers, it is also important to observe how the labor market really is improving at last.
