January 22, 2018 11:14 am CST
The Part-Time Problem
By Briton Ryle, Wealth Daily

Last week, I wrote an article titled, "How the Bull Market Ends."

The gist of the article was that the employment picture in the U.S. is not getting the credit it deserves. In fact, many sources tend to go to extreme lengths to poke holes in the ongoing "economic recovery" story, as this headline (which I included in that article) shows: "In April There Were 26 Waiters And Bartenders For Every Manufacturing Job Added."

Comparing bartender jobs to manufacturing jobs is an unfair comparison. Manufacturing has been in decline for 23 years — until last year. Manufacturing had a net 10,000-job gain for 2014, the first time there's been a net gain since 1990.

But of course, that's not the whole jobs story, as one Wealth Daily reader pointed out.


I don't know if you take replies or answer them. I read the article with a degree of skepticism, just as I read the bears gloom and doom. You addressed the employment picture and the types of jobs being produced by this economy. What you didn't address was pay and full or part time work.

If I'm unemployed (Which I am but that's a different story) I'd be happy to have any job. But if I was still at the stage of my life of trying to provide for a family, save for college, all the things we middle class folks do to grind it out, I'd be very concerned about the jobs this economy provides...

I can't speak for every Wealth Daily reader, but I love getting replies from readers. (Normally, I would include your first name and last initial so you could enjoy eternal Internet fame along with my amazingly insightful response.)

Yes, there has been reason to be concerned about the quality of jobs the U.S. economy has been creating. There has been reason to be concerned about workforce participation, too. And while neither of these metrics is back to "normal," they are also better than you might expect.

I've got a series of charts to show you what I mean...

U6 unemployment

This one is a combo — U.S. unemployment and part-time workers for economic reasons (slow economic growth). Clearly, this total was at ridiculously high levels, a testament to the severity of the financial crisis. It's also improved dramatically.

I know the question is: How much more will it improve? It sure seems like something structural has changed in the U.S. The notion that you can be at the same company out of high school or college for 40 years and have a solid standard of living and retirement seems out the window.

Some of this is because the standard of living in other countries is rising, and some of it is because there's still a lot of slack in the economy. With more people than jobs, the ball is in the company's court. That will change.

And we're seeing that. The number of people who have part-time work due to slack economic conditions is falling...

part-time jobs

The number of people who have part-time jobs because that's all they can find is not really falling. This is likely due to structural changes in the economy.

We could look at the housing market and suggest that fewer homes being built means fewer construction jobs. We could look at increased automation in factories from robotics and see fewer opportunities for workers.

Labor markets change — that's not new. Just look at the challenges industrial cities like Pittsburgh and Baltimore have faced and Detroit is now facing.

It Was a Doozy

The biggest takeaway from these charts and the employment picture in general is that the financial crisis of 2008-2009 was really, really bad. It's been six years since the S&P 500 bottomed, and the economy still hasn't recovered. 

Don't forget it took nearly 15 years for the U.S. economy to recover from the Great Depression.

The U.S. economy lost 10 million jobs during the financial crisis. And it's added nearly 8 million full-time jobs since. Great?

No, it's not great. But it's not terrible, either...

If you want to know why the theme of the "part-time job" recovery persists, I've got one more chart for you...

full time jobs ii

As you can see, the recovery in full-time employment didn't really get into gear until 2012. We still haven't seen any robust GDP growth, and wages remain stagnant.

I realize all this doesn't help much if you are struggling to find a decent job. But if the job market continues to perform like it has, hopefully your prospects will improve.

Until next time,

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Briton Ryle

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