John Lott points out the following: “So far this year there have been 848,000 new jobs. Of those, 813,000 are part time jobs…. To put it differently, an incredible 96% of the jobs added this year were part-time jobs.”
In addition to all of this underemployment, today’s job market report shows the labor force participation rate is down to its lowest level since 1978 (when fewer women wanted to work, of course). And population growth is outpacing job growth, as indeed it had earlier in the oughties before the financial crisis and recovery. Perhaps that is the new normal? (Here are a few graphs from the new numbers.) Here is a passage from my forthcoming Average is Over:
Those laid off workers have been absorbed, into new jobs, at a much slower than usual rate, following a recession. They can’t get their old jobs back, even though the worst of the crisis is over and corporate profits are back up. Most importantly, the new jobs being created are more likely low wage than mid wage. In essence, the American economy is learning that — for structural reasons — it can’t afford as many mid wage jobs as it used to have. Businesses will make higher profits by slotting those workers elsewhere, but not back in other high or mid wage jobs, where they had been before.
Monetary policy is fine, and I see no significant costs from having a higher rate of price inflation in the United States, but stimulus can fix these problems to only a limited degree.
Addendum: As Ben Engebreth points out, based on these BLS charts, the correct number seems to be 59% not 96%, though the higher estimate does still seem to hold in Lott’s (more cumbersome and less transparent) sources.