Let's take a closer look at the latest employment report numbers on full- and part-time employment. Buried near the bottom of table A-9 of the government's employment situation summary are the numbers for full- and part-time workers, with 35-or-more hours as the arbitrary divide between the two categories. The source is the monthly current population survey (CPS) of households. The focus is on total hours worked regardless of whether the hours are from a single or multiple jobs.
In August, the number of full-time workers decreased by 438,000 while the number of part-time workers increased by 527,000.
The Labor Department has been collecting this since 1968, a time when only 13.5% of US employees were part-timers. Over 55 years later, the total number of part-time workers has reached 17.5%.
Here is a visualization of the trend in the 21st century, with the percentage of full-time employed on the left axis and the part-time employed on the right. We see a noticeable crossover during the Great Recession when part-time work increased, and full-time work declined. Over the past year, we have seen a similar crossover slowly form.
The Impact of Recessions on Employment
Let's zoom in a bit closer to see the impact of the Great Recession on employment. We’ve changed the start date of our next chart to the beginning of 2007. The reversal began in 2008, but it accelerated in the fall of that year following the September 15th bankruptcy of Lehman Brothers. In January 2010, shortly after the official end of the recession, part-time work peaked at 20.1% while full-time work reached an all-time low of 79.9%. Afterwards, the two cohorts slowly drifted apart, with full-time employment increasing. Interestingly, this trend continued even during the COVID global pandemic and recession. It was only until recently that we started to see a slight reversal in this trend, with full-time work slowly declining while part-time work is on the rise. As of August 2024, full-time employment made up 82.5% of all employment.
Here's a longer-term view of this same chart. With the extended timeline, we can see a few more examples of what has typically happened to these two kinds of work during a recession. You’ll notice that the recessions from the early 90s and early 2000s saw similar action as the Great Recession: Full-time work declined while part-time work rose. But again, this was not the case during the most recent recession in 2020. In fact, full-time employment peaked in April 2020, possibly because of a shift in the type of full-time work available at the start of the pandemic. There were some employees who shifted to part-time from full-time as a result of the pandemic, however it was only about 3% of those working part-time.
One more interesting feature in the chart above is the dramatic change in the full-time/part-time ratio at the beginning of 1994. In January 1994, the North American Free Trade Agreement (NAFTA) came into effect. This was a trade agreement between the U.S., Canada, and Mexico, aimed at reducing barriers to trade and investment among the three countries. While NAFTA led to increased trade and economic growth overall, it also had various effects on employment. Some industries saw an increase in part-time work due to outsourcing or changes in demand, while others experienced a decline in full-time positions.
Let's compare the reasons for part-time employment over the last four years:
In 2020, the number of part-timers who "voluntarily" took part-time work dropped due to the pandemic. Economic reasons include slack work or business conditions, could only find part-time work, seasonal work, or job started and ended during the week. However, these figures have returned back to pre-pandemic levels over the past few years.
Let's have a closer look at why some employees work part-time, voluntarily and involuntarily:
A Closer Look at the Core Workforce, Ages 25-54
The two charts above are seasonally adjusted and include the entire workforce, which the CPS defines as age 16 and over. A problem inherent in using this broadest of cohorts is that it includes the population that adds substantial summertime volatility to the full-time/part-time ratio, namely, high school and college students. Also, the 55-plus cohort includes a subset of employees that opt for part-time employment during the decade following the historical peak earning years (ages 45-54) and as a transition toward retirement.
The next chart better illustrates summertime volatility by focusing on the change since 2007 in full- and part-time employment for the 25-54 workforce. The government's full-time/part-time data for this cohort is only available as non-seasonally adjusted. To help us recognize the summer seasonality, the June-July-August markers are shown in a lighter color. These months are more subject to temporary shifts from part-time to 35-plus hours of employment. The 12-month moving averages for the two series help us identify the slope of the trend in recent years. Again, we see that over the past few months the trend has reversed where part-time employment has increased while full-time employment has decreased.
Like the 16-and-over version, this chart depicts a current situation that is considerably different from the era before the financial crisis, although the trend has been slowly improving since early 2010, as illustrated by the dotted-line moving averages. In this is non-seasonally adjusted data, the summer months are obvious outliers, with full-time employment spiking during the June-August period.
Obamacare and Part-Time Employment
Many have speculated that the Affordable Care Act (aka Obamacare) has played a role in company decisions about full-time versus part-time employment. The $2,000 per employee penalty for companies that do not comply with regulations has influenced some to rethink their employment policies. In July 2013 the government pushed the start of the penalty from January 2014 to January 2015. But the anticipation of the penalty, even though delayed a year, no doubt influenced the decisions of private employers.
With regard to Obamacare and part-time employment, the surge in part-time employment was triggered by the recession, not by the Affordable Care Act, as the next chart clearly illustrates.
The Bureau of Labor Statistics' monthly employment report is a hodgepodge of data. The full-time/part-time ratio is but a tiny piece of the whole, and the magic 35-hour threshold is arguably arbitrary. But this is, nevertheless, a metric that bears close watching as we try to understand where the economy is headed. The question is whether the ratio shift is to some extent a structural change initially triggered by the great recession but now influenced by a combination of factors, not least of which are workplace demographics and ongoing increases in technology-driven productivity with less dependence on human workforce participation.
Here's our list of monthly employment updates:
Monthly Employment Report
Job Openings and Labor Turnover Summary (JOLTS)
ADP Employment Report
Weekly Unemployment Claims
Full-Time and Part-Time Employment
Multiple Jobholders
Unemployment Claims as a Recession Indicator
Five Decades of Middle Class Wages
Workforce Analysis
Long-Term Trends by Age Group
Aging Work Force
Baby Boomers Across Time
Read more updates by Jen Nash
