Statistics: "Full employment" increases inequality in part-time work


Last week, John Wraith, a strategist at the UBS investment bank, issued a bullish report on the UK economy. "The UK labor market still has no crack," said his headline, pointing to the historic low unemployment rate of 3.8%. But Wraith's paper also contained a puzzle. Although all economic data concerning workers seem to improve – jobs, nominal income growth, etc. – consumer confidence is in free fall.

Why would consumers feel so negative when their job prospects have never been better?

A potential answer can be found in the excellent Wraith charts published on part-time work in the UK. Although part-time work has recently declined, the long-term trend shows overall growth, including involuntary part-time work (where workers only work part-time because they can not find a job). fulltime).

The trend has contributed to stubbornly low wage growth and a recent increase in inequality, according to the Resolution Foundation, a think tank.

At first glance, unemployment statistics could not be better. The UK has a record unemployment rate (3.8%) and a record employment rate (76.1%).


The statistics are similar in the United States. But these figures mask the most significant change in the labor market over the last decade: the fact that full-time jobs are being replaced by part-time and temporary jobs.

This is an important trend – and negative – for workers.

Full-time work, in the form of a 40-hour work week with overtime and promotions, is the key to worker prosperity. It is extremely difficult to buy a house or raise a family if you have less than 40 hours a week or if your job is only temporary. Yet, part-time jobs are a long-term upward trend. UBS data show that more than 26% of jobs in the UK are now part-time.

More than one in four jobs are now part-time jobs.


Between 2003 and 2019, the proportion of people stuck in part-time jobs who really want full-time jobs has gone from 7% to 11%.

Economists qualify these people as "underemployed" or "PTWFT", which means "part time wants full time". They form a reserve army of workers to which employers can appeal at any time. This keeps wages low. And this ensures that full-time workers always know that they can be replaced at any time by the woman at their desk, who works only three days a week.

Today, more than one in ten British workers are in post involuntary part-time work.


The situation is similar in the United States, where part-time jobs have grown steadily.

This graph (below) shows the number of workers in part-time jobs. who would prefer to work full time. Every recession since the 1960s has resulted in a clear increase in the creation of involuntary part-time jobs. It takes years before employers feel compelled to end their activities in favor of full-time jobs. According to data released by Rob Valletta, vice president of the economic research department of the US Federal Reserve San Francisco, the number of involuntary part-time workers increased by 40% in the United States between 2000 and 2018. The data comes from from FRED, the economic database:


Temporary work is on the rise.

At the same time, full-time and part-time jobs have become less secure. More than 10 years have passed since the economic crisis of 2008. But today, temporary work still accounts for a greater proportion of all the work than it was before the recession.


Most workers have seen a shift to precarious work.

According to the Resolution Foundation, a think tank that studies economic inequality, most of the demographic data of British society, with the exception of white women and Indian women, have shifted from full-time jobs to precarious jobs. or part time.

Resolution Foundation

The result is that the 90% of the most disadvantaged Britons saw their income decrease or remain stable as a percentage of national income.

The 90% of the most disadvantaged have seen their share of income decline or remain stable. According to the Resolution Foundation, only the richest 10% have seen their share increase.

Resolution Foundation

Taken together, the results of the two trends in temporary work and part-time work are surprising: full employment – the result of GDP growth every year since 2009 – has do not created a rising tide that lifts all boats as well.

On the contrary, it has created poorly paid insecurity for a quarter of workers doing part-time work, which is almost always less lucrative than full-time work.

British workers actually have poorer in most years since 2008 (after taking into account inflation).

The following graph shows wages (in blue) as a function of inflation (in red). The green zone represents the difference – "real earnings growth". (For example, if a worker receives a 2% wage increase, but inflation is 3% that year, then his real income will have decreased by 1%.)

The 2008 crisis has changed the real earnings growth of the British. Before the recession, real gains have increased in most years. After the recession – the 10 years in which part-time work has been accelerated – real earnings have declined in most years.

The green section shows the growth of wages after taking into account inflation, whether workers are more or less rich in real terms.
Resolution Foundation

There may be some good news coming out on the horizon, according to UBS's Wraith. More recently, there has been "steady improvement in data on temporary and part-time workers," he wrote.

"It is encouraging to see that the number of temporary and part-time employees in relation to all workers continues to decline … and that the number of those who occupy such roles involuntarily (and 39, ie who would prefer a permanent or full-time job) is steadily declining as a percentage of all jobs ".

This is due to the fact that unemployment has reached its lowest level. At 3.8%, the unemployment rate is extremely low. The supply of part-time workers available – "slack" is the technical term – decreases and requires employers to offer more full-time jobs. The key question is whether part-time jobs are brought back to their lowest levels before the crisis or whether they are a permanent feature of the modern economy.

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