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Help Wanted, But Only Part Time


Now we turn to a story that could signal ongoing troubles in the economic recovery. One number that a lot of economists have been watching is the unemployment rate. It now stands at 7.6 percent. That's far below the 10 percent level at the height of the recession, but observers caution that that number doesn't tell the whole story.

A lot of people who want full-time jobs are getting hired, but as part-time workers, and they don't want that. And here to help explain why and what effect this has on the economy overall and why this persists is Sudeep Reddy. He's an economics reporter for the Wall Street Journal.

Welcome back to you. Thank you so much for joining us once again. Welcome to our new studios.

SUDEEP REDDY: Good to be here, Michel.

MARTIN: So how pervasive is this? I mean, how many people do we think are working part-time now who would really rather not, who would really rather be working part-time? Obviously, if you want to work part-time, having a part-time opportunity is great, but if you don't want that, it's not. How many people you think we're talking about?

REDDY: We're talking about almost eight million people in the country who are working part-time jobs when they would rather work full-time. That is a lot of people. When you look at the overall unemployment rate, of course 7.6 percent, you forget there are all sorts of stories under that. There are people who are underemployed who might have jobs and not count in that 7.6 percent.

Once you count people who are discouraged and people who are working in part-time work when they'd rather have full-time jobs, that unemployment rate actually rises to about 13.8 percent. So it's a big gap and we're seeing this divide worsen as we go along in the recovery, because people are taking part-time jobs now just because they've run out of hope to find a full-time job and they're just stretching out - the recovery is stretching out for so long that a lot of people have no other choice than to take whatever they can get.

MARTIN: I was going to ask you about this. Is this - the pattern that we're seeing here where people are taking part-time work because they cannot find full-time work and they're - this is not their choice. This is not - what they're happy about. But is that usual? Is that a pattern that we've seen before? Is there something distinctive about this cycle?

REDDY: It certainly is a pattern that you see in the beginning stages of any recovery. As you would expect in a recession, employers cut jobs. They cut hours. They do whatever they can to protect themselves and, as they come out of the recession, you would expect them to go and hire workers, kind of, in small batches as customers come in the door, as their order books pile up, and you would actually see that.

What we're seeing now, though, is employers are so cautious, they're seeing this recovery stretch on where we're almost at - we're three or four years of an economic recovery. We're about to go into our fifth year of just waiting for a stronger upturn. Employers are thinking, you know, this could stretch a little bit longer and so why would you take the risk of bringing on full-time workers when you may not have the business for it? And so you're looking for part-time work. Part-time workers are, in most cases, cheaper and, most importantly, you're generally not paying benefits to part-time workers, which is the benefit - which is the upside for an employer and, obviously, the downside for an employee.

MARTIN: To that end, though, there were those who, in opposing the Affordable Care Act, which is, you know, colloquially known as ObamaCare. There are those who argued that this is exactly the result that would occur, that employers would avoid hiring to avoid paying benefits and having to follow these regulations, which kick in at a certain level of full-time work. Do you think that's true? Is there evidence that that is the case, that employers are, in fact, avoiding hiring full-time to avoid paying for benefits?

REDDY: Right. There is anecdotal evidence and there is a substantial amount of anecdotal evidence, but there's no clear sense that this is the leading cause of why employers are going and looking for part-time workers. It's probably leaning more toward demand. If things were pretty good in the economy, then you'd want to go out and hire whoever you can and pay them much better than you're paying them now, because I actually believe most employers want their workers to do well and don't want to lose them to other jobs. But right now, you're facing the issue - if you're a business owner, there's really little chance that you're going to lose your employee to another job and so you don't have any incentive to ramp up pay, to increase benefits.

And there are indeed many cases where employers are saying, OK. Well, these regulations are kicking in in 2014. I don't want to have to pay a penalty for having a full-time worker without health insurance, so we're going to stick to part-time workers. We just don't have data to show how prevalent that is and so it's very easy to overstate that case right now when it's probably having to do more with overall demand in the economy.

MARTIN: And so this - and I think that the big question then that I'm sure a lot of people are thinking is - OK, why isn't there more demand in the economy? What's going on?

REDDY: Well, there are a lot of underlying forces, obviously. There are some domestic, some abroad. We have a slowing global economy right now. The U.S. economy has been held down by a lot of factors, personal debt, people working off their debt levels, paying down their mortgages, dealing with their own personal situations. And obviously, we're seeing plenty of dysfunction from Washington through higher payroll taxes and budget sequestration right now with these budget cuts. That's probably going to be weighing down the economy.

There's just, year after year, another explanation for why we're not breaking out of this slump. But the reality is that we're probably going to be going through this for at least the next few months, perhaps into next year before you actually have a sense that you're coming out of it.

MARTIN: Finally, I'm going to ask you a question that one of my producers used to ask me whenever you called in from a particularly difficult assignment. He would always say, is anything OK? Is anything OK, Sudeep, in the economy right now?

REDDY: There are some things that are OK. You are seeing some modest improvement in certain areas. If you have a college degree, things are getting a lot better. The problem is a lot of people who are stuck in part-time jobs tend to be the least educated, the least skilled, and that just exacerbates all the problems that we're seeing.

If you are in a part time job, the chances of being considered working poor are substantially higher. One out of seven part-time workers are working poor. One out of 25 full-time workers are working poor. So there's a huge divide there and it's mostly going to be an issue of time where we can finally see that there is a recovery out there somewhere. It's just going to be a lot of time to work through all of these problems that we've set up for ourselves.

MARTIN: Sudeep Reddy is an economics reporter for the Wall Street Journal. He was kind enough to join us in our Washington, D.C. studios.

Sudeep, thank you so much for speaking with us.

REDDY: Thanks, Michel. Transcript provided by NPR, Copyright NPR.