Jobs Numbers Mean Nothing in a Part-Time Age
A growing number of wealthy entrepreneurs are speaking out about the need for people to work less and do it in more flexible formats than the traditional 40-hour workweek. What Larry Page of Google Inc., Carlos Slim of America Movil SAB and Richard Branson of Virgin Group Ltd. suggest would help cure unemployment -- itself an increasingly meaningless metric in a world with the current automation level.
Page recently pointed out that, with machines taking over so many human tasks, "the idea that everyone needs to work frantically to meet people's needs is just not true," so people should just work fewer hours. Slim suggested a three-day, 33-hour workweek, suggesting that people could use the extra free time to invent things. Branson's favorite idea is job-sharing -- hiring several people to do the job of one.
We listen to the gurus as if they're suggesting something new. In fact, their words reflect a statistical trend. Last month, 19.3 percent of the employed U.S. population worked part time, or less than 34 hours a week. Here's how the number of part-time employees has changed in the U.S. since the 1960s:
National definitions of part-time work differ. In France, until 1982, a part-timer was someone who worked less than 30 hours a week. Now it's anyone who feels he or she is not working full time. Based on that definition, the number of part-time workers in France has increased by 20 percent since 2000, according to the Organization for Economic Cooperation and Development. In Germany, which also relies on personal perceptions for its statistics, the number of part-timers grew 52 percent in the same period. Almost 27 percent of Germans are only partially employed.
Employment statistics include part-timers, of course. So if governments follow Branson's advice and make it cheaper, in tax terms, for companies to hire several people where one would do, unemployment numbers are going to drop. Slim's 33-hour-a-week workers will also be counted as employed. From a statistical point of view, the world's developed economies will look better, just as they do when they include drugs and prostitution in their gross domestic product calculations, as European nations are doing now to comply with European Union guidelines.
The problem is that people who work fewer hours make less money, and not just because they put in fewer hours. Recent research indicates that in Austria, part-time workers earn 24.2 percent less per hour than full-timers. Income is proportional to working time: Once the 30-hour-per-week level is reached, the hourly pay difference drops to 15 percent. Only in publicly funded sectors such as education and health care is there almost no pay differential.
Employers treat part-timers as expendable regardless of their reasons for not working full time. A woman who wants to take better care of her children, a desperate worker who cannot find full-time employment, a student who needs time for school, a downshifting dreamer -- all are perceived as lacking the commitment for which companies are willing to pay.
I suspect the business gurus ultimately like part-time employment for this reason: Less commitment from a worker requires less commitment, and less outlay, from them. Branson clearly wants to avoid making that impression when he writes that "people will need to be paid more for working less time, so they can afford more leisure time." He, however, adds immediately: "That's going to be a difficult balancing act to get right." That sounds much less impassioned than Branson's call for work flexibility, and it's the opposite of what is really happening.
Governments that peg their macroeconomic and political decisions to employment levels are shooting at the wrong target. They don't really need more people to qualify as employed. That notion is more flexible than it has ever been, and it says nothing about the economic hardship or psychological distress undergone by nominally employed people who cannot make ends meet on their pay.
It is poverty, not unemployment, that governments really need to tackle. The U.S. government should celebrate when growth of the dollar-store industry stalls, not when the unemployed percentage ticks down. Resetting the system to provide an acceptable living standard to everyone, rather than making sure more people find work of any kind, might be a long-term goal that would help simplify entitlement rules, reduce bureaucracy and, who knows, even cut costs.
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