Welcome to the Part-Time Lifestyle!

by Michael Matheron · January 10, 2009

The just released employment report of the Department of Labor Bureau of Labor Statistics (BLS) has begun, I believe, to at least mildly sedate those overly optimistic CNBC cheerleaders who keep braying that the worst is behind us. I’d like to join them in that optimism, but the numbers in all areas beg for realism, or what I call “my pal” pessimism. I’ve written before that the unemployment rate will rise well above the oft-predicted 9%. While not yet there – the recent report puts the unemployment rate at 7.2% – we’re just starting to see the bulk of the job losses. The unemployment rocket’s on the pad and it’s taking on the fuel of indecision and inaction in Washington D. C.
Primarily, I’d guess we’re all disgusted and dismayed by the sniping and skirmishing already apparent among both Democrats and Republicans about President-Elect Obama’s plans to stimulate the economy. Disgusted? Yes. Surprised? No. It’s clearer by the day that Congress will not act quickly enough or boldly enough to pour water on the fires devouring our economy. It would very 2008 of them them to turn what I’m presently calling the Lesser Depression into the Mother of All Depressions. Unfortunately, let’s face it, the present mess is well above everyone’s pay scale, from economists to comedians, even Bill Maher. Søren Kierkegaard was as amusing a man as ever lived and even he, in one of his few serious moments, observed “Life can only be understood backward, but it must be lived forward.” So, let’s move forward by looking backward at the December 2008 BLS employment report.
Onward to Unemployment! The overall employment situation is represented by the rocket graph I’ve so kindly provided employing childlike Photoshop skills. (Next page) It charts the

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BLS reports of unemployment and underemployment for the Dubya Bush years. The unemployment rate is the “official” one we hear about each month in the news. Yesterday, it was reported at 7.2% and represents the “total unemployed as a percent of the civilian workforce,” and as you see, it really took off in 2008.

But there is more lurking within the BLS reports: the underemployment data. Because it’s always a scarier number, it’s less reported by the media (if at all), and includes other groups, namely (1) “marginally attached workers” who have not looked for work in the four weeks prior to the monthly BLS survey, but still want to work; (2) “discouraged workers,” also not looking for work but because they believe there are no jobs available or there are none for which they would qualify; and (3) workers who “for economic reasons” (as BLS puts it) work part-time but who want, and are available for, full-time work.

The numbers represented by the percentages at the far right of the rocket chart combine the BLS official unemployment rate with the data derived from the other sources of underemployment. Presently, we have a 13.5% figure staring us in the face, and the Lesser Depression is in its early phase, absent, as I say, quick and forceful and successful fiscal stimulus.
Within the BLS report is one interesting forewarning that the worst is still ahead, and also a sure measure of the collective pain of the American workforce. It’s their calculation of what they call the “number of persons working part time for economic reasons.” These are involuntary part-time workers, emphasis on “involuntary.”

In December, the number of persons who worked part time for economic reasons . . . continued to increase, reaching 8.0 million. The number of such workers rose by 3.4 million over the past 12 months. This category includes persons who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs. [Emphasis added]

Madoffematics 101. Note the meteoric rise from 4.6 million to 8 million in the last 12 months. The recent data in the chart at the bottom of the page looks, to mathematical thinkers, like exponential growth. As an example of the speed and power of exponential growth, one can imagine a similar graph of the number of lawsuits brought over the last few weeks against pyramid scheme king Bernie Madoff . . . Basically, in exponential growth, the larger a quantity gets, the faster it seems to grow, kind of like viruses grow in petri dishes. And that looks like the BLS part-time employment chart (below), doesn’t it? Of course, that kind of growth can’t continue or everyone in the U.S. would be working part-time, kind of like Congresspeople . . . Understand, though, the vast increase of part-timers is among workers who want to work full-time (one supposes they need to “put food on their families,” as Dubya once famously sputtered). These aren’t teenagers looking for babysitting or populating lemonade stands . . . The accelerating slowdown of business activity, however, means that millions of once full-timers are now part-timers. Look again at the dark line in the BLS graph below. Then compare it to the other years and periods of recession (indicated by vertical gray lines). That present straight up incline in the chart is just crazy scary, particularly at what I predict is the beginning of this multi-year Lesser Depression.
One might think, reasonably, that most part-timers are youthful workers, and generally that’s the case. Thus, they don’t have as many family obligations, and therefore part-time work is not as damaging overall to the economy. However, the “times they are a’ changin’.” A previous BLS report on involuntary part-time employment as of November 2008 puts a bullet into that idea:

However, workers aged 25 years and older have [historically] accounted for a disproportionately large share of the recent rise in involuntary part-time employment. From the third quarter of 2006 to the third quarter of 2008, 84 percent of the increase in involuntary part-time employment occurred among workers aged 25 years and older; they made up 75 percent of all involuntary part-time employment in the third quarter of 2008. [Emphasis added]

Moreover, business-related moves by employers reacting to slack business by creating more part-time workers is a harbinger of an increasing official rate of unemployment. The same BLS report continued:

Similarly, a rise in economic part-time employment due to slack work frequently occurs before a rise in unemployment, mainly because many employers tend to reduce workers’ hours before implementing layoffs when faced with a decline in demand for their goods and services. [Emphasis added]

With the enormous growth in the part-timer segment last year, 2009 appears crocodile dangerous, to say the least. Absent a Heave-sent bipartisan agreement on a hefty stimulus plan that quickly works, this kind of involuntary part-time worker increase warns, I think, that the official unemployment rate – the media darling – will run above 12% in 2009.
And, as discussed, by some measures of unemployment that, unlike the publicized BLS unemployment rate, include discouraged workers, involuntary part-timers, and others marginally attached to the workforce, our unemployment rate is already 13.5%. That’s the number I believe measures the real pain. So, absent a quick and successful fiscal stimulus plan, the official unemployment rate tops 12% as I expect it will, our true unemployment rate will be in the neighborhood of 18-21%, a very bad neighborhood adjacent to Great Depression Avenue. And that will not keep the Lesser Depression “lesser.” Can Congress not know this?
More Time for Hobbies. The good news, we finally have a four day workweek! The bad news, it’s totally involuntary . . . Yet another measure of the critical labor situation is the BLS report of the average hours in the work week:

In December, the average workweek for production and nonsupervisory workers on private nonfarm payrolls fell by 0.2 hour to 33.3 hours, seasonally adjusted—the lowest level on record for the series, which began in 1964. [Emphasis added]

The “lowest on record for the series, which began in 1964” is not a record that comes with a medal. And should the involuntary part-time work rate continue its rocket-like ascent, the work week will also fall further, to the very low 30s. It’s a four day week. Less wages, but more time for hobbies like . . . looking for more work.
We need to do what the Internet allows us to do so well: Yell at our Congressional delegations. Not, “inform.” Yell. Not “raise consciousness.” Yell. We saw how successful this has been in Obama’s victory; Internet fund raising and misinformation destruction are but two things that we used to take away the GOP’s normal advantages. We can do the same now. Send a very simple e-mail to your Congressional delegates, House and Senate. Tell them your own stories, direct them to move quickly to provide fiscal stimulus to the country. Yell. Yell. Yell.