Work Hours and America’s Disconnected Youth

by Reihan Salam

Response To...

Work and the Democrats

In light of the absurd misrepresentation of Jeb Bush’s remarks on work hours, which Ramesh discusses below, it’s worth thinking a bit more about the 6.8 million Americans who are working part-time despite the fact that they want full-time work. Rob Valletta and Catherine van der List of the Federal Reserve Bank of San Francisco recently offered a helpful look at the prevalence of involuntary part-time work. Roughly a fifth of U.S. workers are employed part-time, and three-fourths of them do so voluntarily. Many of these workers have family obligations that make full-time work impracticable. Some are enrolled in school part-time, and others are easing their way into retirement. Part-time work of this kind has much to recommend it, and there is a case to be made that the U.S. would do well to make part-time work a more viable option for students, parents, and the elderly. But as Valletta and van der List observe, the Great Recession saw a sharp increase in the number of people working part-time despite the fact that they’d prefer to work full-time, and though this number has fallen as the recovery has progressed, it has fallen slowly. In May, the unemployment rate was 5.5 percent and the rate of involuntary part-time work was 4.2 percent. By comparison, when the unemployment rate was 5.5 percent in mid-1996 and late 2004, the rate of involuntary part-time work was 3.2 percent.

Why are we experiencing an elevated level of involuntary part-time work? Valletta and van der List made an effort to tease out possible reasons, from the business cycle to structural factors, like the overall shift in employment towards sectors like retail and hospitality that rely heavily on part-time workers to employment taxes and regulations around providing health benefits:

Our model enables us to separately identify the change in involuntary part-time work over time that is attributable to cyclical factors, such as state unemployment rates, versus structural factors. This breakdown is not exact, but it gives us a relatively narrow range of estimates. Figure 3 depicts the midpoint of the range of estimated cyclical and structural components. From the base level of just under 3% in 2006, cyclical factors raised the rate of involuntary part-time work by slightly more than 2 percentage points at the peak in 2010, while structural factors raised it by a little over 1 percentage point. The cyclical component declined after 2010 and is likely to have continued falling beyond our sample period, while the structural component was relatively stable from 2009 through 2013.

To be clear, Valletta and van der List have devised a model. They certainly haven’t settled the issue of why involuntary part-time work is so high. But if they’re right, it does seem as though labor market reform could improve matters, if only modestly. 

One of the reasons I’m so frustrated by the new anti-Bush meme that it is somehow “out-of-touch” to be concerned about work hours is that the underemployment and non-employment rate for young people is so high. It is sometimes that we shouldn’t fret too much about falling labor force participation among the young, as younger people are more likely to be enrolled in post-secondary education. It turns out, however, that roughly one out of every six Americans between the ages of 16 and 24 is neither working nor enrolled in school. I tend to think that these young people would benefit from access to employment opportunities, and, like Robert Cherry, I think that many young people, particularly young men, would benefit from year-round, part-time employment while still enrolled in school, to help increase family incomes and to help them gain valuable skills. But . . . apparently it’s now a bad thing to care about work hours? Does anyone really believe this stuff?

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