Full Time Jobs Devolving Into Part Time Jobs

Every week, we await unemployment data, wondering what this indicator will show. As you might guess, however, the unemployment data we receive from the government does not tell the whole story. This data only reflects the number of people seeking unemployment benefits. It does not include people who have dropped off the rolls (and may still be unemployed), and it does not address the growing issue of underemployment.

Part time jobs on the rise as the economy weakens

One of the easiest ways for employers to save money is to cut full time hours to part time hours. Not only does this mean less money in wages paid, but it also means that benefits (especially health care) no longer need to be paid, either. Here is what Investing Blog points out about the information from the Bureau of Labor Statistics:

Even more interesting from the BLS report is that only 1.5 Million are working part time because that is all they could find. Most are working part time for jobs that were previously full time.

Most of the 5 million people working part time are doing so because their hours have been cut from full time. True, having a part time job is better than having no job. But these folks are going to be subject to a couple of problems:

1. Dramatically increasing health care costs, since they no longer have insurance to help. (Or they have to get more  expensive individual plans.)
2. Increased risk of foreclosure, since the mortgage payment may be harder to make on a part time salary.
3. Increased risk of mounting debt as they turn to credit cards to make ends meet. (Combine this with credit card companies’ propensity to lower credit card limits right now, and problems really start to become apparent.)

If the goal of the government is to spend our way out of recession with the help of consumerism, the current conditions are going to be hard. Honestly, if the government is serious about the idea of throwing billions (and trillions) of dollars into the economy to jump start consumer spending, its best bet isn’t more investment in corporations and tax cuts. It’s best bet is massive individual economic stimulus that gives people enough money to cover their obligations and then do a little spending.