Part-time America: How we increased our part-time for economic reasons workforce by 4 million people since the recession began. Healthcare costs encourage low wage employers to hire more part-time employees.

The rise of part-time employment in the United States is part of the low wage system that is spreading throughout the country.  Part-time workers are cheaper to hire and easier to fire.  You also avoid paying benefits from a healthcare system that is seeing skyrocketing costs.  Prior to the economic crisis, the number of Americans working “part-time for economic reasons” was roughly at 4 million.  Today, in this supposed recovery it is up to 8 million.  While the stock market is taking off many companies have figured out that it is cheaper to have a large number of at-will workers instead of bringing on full-time employees and providing additional costs.  As we have discussed, the recession has been used as a cover to slash middle class wages and inflate profits that have filtered to a very small portion of our population.  Part of this problem is structural and we are seeing the impact of higher healthcare costs hitting the employment market.

Part-time America

The number of Americans working part-time is still near a peak level:

part-time for economic reasons

The recession caused this figure to jump by over 100 percent and it has largely not fallen back down.  Combine this with the vast number of Americans on food stamps, over 47 million and you start seeing the growing ranks of the permanent poor.  These changes of course are hitting many lower wage service sector workers:

“(WSJ) Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul’s requirement that large companies provide health insurance for full-time workers or pay a fee.”

Keep cutting costs to increase the bottom line.  Take a look at how much more medical care costs have soared compared to the overall CPI:
medical care

So of course when employers examine lower waged service sector workers they are very likely to balk when it comes to paying the high cost of healthcare premiums.  Let the government (aka society) cover these high bills.  The margins are squeezed when this occurs and since we are hollowing out the middle class, we are starting to get a preview of what our economy will look like.  Our economy will have a top quintile of highly paid professionals, a larger class working poor, and a shrinking middle class.

You have to examine the above chart carefully and see how consistent the gains in medical care costs have become.  Costs in the medical field are so outrageous that a one day stay in the emergency room can cost you up to $10,000:

“(HP) We have followed the health care debate over the past few years and, as a result, know that ER visits are expensive, so we figured my wife’s visit would cost, oh, $2,000 or so. Well folks, we “mis-underestimated” the cost by a factor of five. I just received the bill from our insurance company and the grand total was $10,203 (or about $2,000 an hour). I called the hospital and received an itemized statement. Most of what was done was incomprehensible to me (I’m not that kind of doc!): CMP Pane ($510), Level 4 ($715), but an Internet search helped explain things a bit.”

Think about the impact of something like this on the median household income that pulls in $50,000 a year, gross.  The outrageous costs in healthcare are completely unsustainable.  But here we are with subsidies to housing, colleges, and healthcare with no checks and balances so it is no surprise that prices are completely disconnected from actual incomes.

The growth of part-time employment stems from not only the avoidance of covering medical insurance but also the ability to cut workers at will.  The Fed has followed a similar path to the Bank of Japan and it is no surprise that Japan now has an incredibly large part-time workforce.  It doesn’t seem like the press is concerned with the disappearance of the middle class but obviously the millions that are being thrown into the working poor will be.     

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  1. Gary Reber said:

    The rise of part-time employment and underemployment is on a projectory to get far worse with tens of millions of Americans facing unemployment and underemployment due to cheap global labor and tectonic shifts in the technologies of production that are destroying jobs and degrading jobs in terms of wage and salary levels, forcing American to subsist at poverty or near-poverty levels.

    Soon, industrial monopoly capitalism will reach its twin goals: concentration of productive capital ownership among the elite ownership class and work performed with as few labor workers and the lowest possible wages and salaries. The question to be answered is “Then what?”

    Of course, to reach this twin goal will require “investment.” The term “invest” sounds good on paper or in speeches, especially when justified on the basis that investment will create JOBS. But the reality is that no one is addressing the CONCENTRATED OWNERSHIP of the income-producing assets that result from investments under the current financial system. Such assets created by investment are the result of tectonic shifts in the technologies of production, which is the real reason, as well as outsourcing, that jobs are being destroyed and degraded in terms of wage and salary levels. Until a Romney or Obama address this BIG ISSUE, unemployment and welfare roles will dramatically expand. It is only through future investment with the stipulation of simultaneously broadening private, individual ownership of income-producing productive capital––the non-human means of production embodied in human-intelligent machines, super-automation, robotics, digital computerized operations, etc.––that we will be able to enrich EVERY American’s life.

    As a nation, we continue to ignore the possibility of democratizing future ownership of labor-displacing productive capital technologies and rising ownership incomes as a market-generated means of eliminating wage slavery, welfare slavery, debt slavery and charity slavery for the 99 percent of humanity. Binary economist Louis Kelso argued that the Keynesian model fails to recognize that “when capital workers replace labor workers as the major suppliers of goods and services, labor employment alone becomes inadequate because labor’s share of the income arising from production cannot provide the progressively better standard of living that technology is making possible. Labor produces subsistence at best. Capital can produce affluence. To enjoy affluence, all households must engage to an increasing extent in capital work”

    For decades employment opportunity in the United States was such that the majority of people could obtain a job that could support their livelihood, though in most cases related to a family, it required the father and mother to both work, if they aspired to live a “middle class” lifestyle. With “Free Trade” those opportunities began to disintegrate as corporations sought to seek lower cost production taking advantage of global cheap labor rates and non-regulation, as well as lower tax rates abroad. This resulted in a chain reaction forcing more and more companies to out-source in order to stay competitive (thus the rise of China, Indiana Mexico, and other third-world nations economies).

    At the same time tectonic shifts in the technologies of production were exponentially occurring (and continue to do so), which resulted in less job opportunities as production was shifted from people making things to “machines” of technology making things, The combination of cheap global labor costs and lower long-term invested “machine” costs has forced the value of labor downward and this will continue to be the reality. Our only way to far greater prosperity, opportunity, and economic justice is to embrace technological innovation and invention and the resulting human-intelligent machines, superautomation, robotics, digital computerized operations, etc as the primary economic engine of growth.

    But significantly, unless we reform our system to empower EVERY American to acquire, via insured capital loans, viable full-ownership holdings (and thus entitlement to full-dividend earnings) in the companies growing the economy with the future earnings of the investments paying for the initial loan debt to acquire ownership, then the concentration of ownership of ALL future productive capital will continue to be amassed by a wealthy minority. Companies will continue to globalized in search of “customers” with money or simply fail as exponentially there will be fewer and fewer customers to support their businesses worldwide. Why, because the majority will be disconnected from the income derived from the non-human means of production that is replacing the need for labor workers.

    Education is not the solution, though it is critical for our future societal development. But except for a relative few, the majority of the population, no matter how well educated, will not be able to find a job that pays sufficient wages or salaries to support a family or to prevent a lifestyle which is gradually being crippled by near poverty or poverty earnings.

    Already, GDP growth is at a near standstill. Lowering taxes on the wealthy ownership class will not much impact this reality because they will not invest unless their are customers to create demand. This will continue to be the reality unless we reform the system to connect the majority of people to the property rights of the non-human production of products and services while simultaneously spurring economic growth, and entitle them to the earnings of capital (dividends, interest and rent) as a second income source to supplement their earnings from their labor in the short-term, with the long-term lifetime goal of earnings from capital ownership being the primary source of their income. This is the ONLY way to strengthen individuals and empower them to become personally responsible for their lives and not depended on taxpayer redistribution and national debt to sustain welfare support, open or concealed.

    Sadly, our leaders are not prepared and are not preparing the American people for the coming economic collapse and the next Great Depression, due to their lack of wisdom and foresight to understand that full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role––as the use of “machines,” superautomation, robotics, digital computerized operations, etc. to produce products and services.

    Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American middle class and make it impossible for more than a minority of citizens to achieve middle-class status.

    A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.

    There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.

    The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the “machines” that are replacing them or devaluing their labor value.

    Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

    February 23rd, 2013 at 9:40 am
  2. Don Levit said:

    I knew that the PPACA considered part-time workers as full-time equivalents.
    For example, a company with 30 full-timers and 100 part-timers, has 80 full-time employees.
    I was wondering why all these companies want to reduce their employees’ hours to 29 per week, thus making them part-timers. They still will be calculated as full-time equivalents.
    The reason is that part-timers, even those who are full-time equivalents, are not mandated by the government for employers to cover.
    Thus, a company with 30 full-time employees and 100 part-timers, need not offer health insurance at all, for the first 30 full-time employees are excluded from the “formula.”
    What’s the point of full-time equivalents if their employer need not cover them?
    Don Levit

    February 23rd, 2013 at 1:37 pm

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