Business

Report shows tech is forcing full-time employees into part-time work (2 graphs)

Image Credit: @BarackObama

The Bureau of Labor Statistics released a widely celebrated jobs report this week, showing 288,000 jobs were added in June, bringing unemployment closer to pre-recession levels.

It’s overwhelmingly great news for much of the economy, but lurking in the shadows is a force displacing more people into part-time work or out of the labor market altogether.

Technology displaces jobs through a number of mechanisms: globalization, automation, and decreased wages in low-pay work. While it is difficult to know if the trends from the most recent jobs report are cyclical or permanent, the report shows, at the very least, that the associations we see between technology and the economy are not reversing.

Not returning to work

Economists “keep expecting people who have become discouraged during the recession and slow recovery to start looking for work again,” wrote the Wall Street Journal’s Phill Izzo, “But that hasn’t happened. In fact, the number of unemployed who were re-entering the labor market actually fell in June.”

The graph below from Fivethirtyeight shows the economy is still full of discouraged people not looking for work (“discouraged workers”)

 

 

casselman-datalab-jobsday-3

Retiring baby boomers account for some of the declining participation rate in the job market, but not all of it. Globalization and automation is also shrinking the total U.S. workforce. “Fax machines, e-mail, and the internet enable a growing number of contingent workers to provide services from their homes or other non-traditional sites.This, in turn, permits firms to reduce costs by reducing the size of their facilities and paying only for work actually needed,” explained Stephen F. Befort in the Berkeley Journal of Employment and Labor Law [PDF].

Economist Peter Kuhn finds that people who make more are working more, while those making less are working less, because the inequality of each hour of work is growing, providing less incentive for low-payed people to find work.

Part-time working

When firms do need work, they may not be hiring full-time workers. In June, much of the jobs bump is due to a 275,000 increase part-time workers.

The graph below from The Atlantic shows the share of the economy that is part-time work (blue) vs. the unemployment rate. Part-time work has not dropped as steadily as the unemployment rate.

Screen Shot 2014-02-07 at 10.50.23 AM (1)

New technology platforms for part-time work, or “contingent workers”, are helping the unemployed find work. Brian Chesky last week explained how flexible work platforms, such as Task Rabbit, or his own housing rental service, Airbnb, are helping beleaguered citizens pick up work through occasional gigs.

For a service like car ride sharing app, Uber, it is both destroying traditional jobs in the Taxi industry, but giving new jobs to part-time workers who drive their regular cars as cabs. In this regard, technology both displaces workers and helps others find new hope.

The jobs report is good news, but it has not reversed the long-term trends towards discouraged and part-time workers.


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26 comments
Austin Calvert
Austin Calvert

Obamacare, is causing some of this part time madness, considering many entities are scared shitless to be investigated by having an employee above part time hours and not getting healthcare. Therefore, more businesses are moving there workers to part time, considering they can't really afford to offer full health benefits to many full time employees. Some fucked up shit.

Michael Leber
Michael Leber

Why is this news? It's been happening since 1900 and the start of the industrial revolution, go look up the origin of "sabotage".

Chris Close
Chris Close

"Jobs created per month" mean nothing without comparing them to the percentage of people working in full time jobs in the same period.     If you are in a leaking boat and you increase your bailing rate from 9 to 10 buckets of water per minute... but 12 buckets a minute are coming in you are still sinking.  Wake up!!!!!

Jooho Kwon
Jooho Kwon

This headline should also say and we spent $4 Trillion doing it...

Simon Naldoza
Simon Naldoza

While the graph has its own implications (it's been used a number of times in other articles), I don't think this article is at all taking any political position (it is venturebeat afterall), despite some of the responses. Also, the article wasn't really trying to enumerate/parse out the number of technology jobs out of the larger numbers; it was simply trying to emphasize the effect that technology has had on the jobs market over the years (email, sharing economy businesses like taskrabbit, uber, and lyft). It's a much bigger/broader discussion than any political one: i.e. we would see the same effect regardless of who's the POTUS.

Alan Robinson
Alan Robinson

Technology taking people out of work and a larger population on Earth, how do we keep people engaged and motivated and also with money to spend........

Barbara Saunders
Barbara Saunders

I think we lack imagination if the only solution we envision is make-work and make-jobs.

Joseph Wooldridge
Joseph Wooldridge

If any of those former full-time tech people want to do something with that spare time, have them send me a resume!

Chris Young
Chris Young

Folks that are taking student aid and not going to school and or not working are not factored in. Yet the largest at risk. Then add in the under employed that have dropped out and or under 30hrs a week through the temp companies. Oh but were raising the min wage...

Kucinich TwoThousandSixteen
Kucinich TwoThousandSixteen

Tech or ACA requiring you start buying insurance as soon as you hit a certain number of full-timers?

Zach Petersen
Zach Petersen

I probably shouldnt have used the 92 million number as its nearly as difficult to understand as the "unemployment" rate. That said the unemployment numbers that you see tossed around on a monthly basis are, for the most part, political tools. The numbers are adjusted to not included those who are underemployed or simply no longer looking for work. Also, I believe the "Labor Force" numbers are based on working age (pre-Retirement age) people. Last month 800k people dropped from the Labor Force.

Locke Anthony Michaels
Locke Anthony Michaels

Look closer...280,000 new jobs created and 275,000 were part Time positions...75% of those replaced full time jobs...NOT JUST TECH...you better wake up and smell the socialist while you still can

Steve Koch
Steve Koch

92 million is 30% of the U.S. population which includes children and the elderly. If we exclude children and the elderly that would be closer to 50%. Are you saying the unemployment rate is actually well above 30%?

Zach Petersen
Zach Petersen

The great thing about numbers is that they can be handled in so many ways. For instance, you can take some numbers and manipulate them to create a graph such as the one in the headline. You could also take information from the same dataset to show that there are 92 million Americans who are not working. Bottom line, if you are trying to present information on this topic you shouldnt lead with a graphic produced by a politician.