AP Reluctantly 'Discovers' Trend Towards Part-Time and Lower-Paid Work — Years Late
In this case, the old saying, "Better late than never" really shouldn't apply. In June, when the government's Household Survey used to determine the unemployment rate reported that there were 240,000 fewer full-time workers and 360,000 more part-time workers than there were in May, the establishment press, particularly the Associated Press, largely ignored or downplayed the result.
The AP's Christopher Rugaber broke the ice a bit in early July after June's jobs report, and the wire service has finally gone full-bore into noting the trend towards part-time work in the past two days. But while the press slept for months, center-right bloggers and many others have been chronicling the trend anecdotally since late last year, and gradually with solid numbers from the government's own reports as the year has worn on.
In early July, while somehow claiming, despite the stats mentioned earlier, that June's jobs report showed that "U.S. employers are sending a message of confidence in the economy," Rugaber understated the full-time/part-time shift by writing that "Many of the new jobs are only part time."
Additionally, while he finally acknowledged that companies might be "hiring more part-time workers to avoid the health care reform law's requirement that companies provide health coverage to full-time staff," he didn't tell readers that "full-time" in ObamaCare language means 30 or more hours per week, not the legal definition of 40 hours used in overtime calculations and other purposes or the 35 used by the government in its jobs reports. He then discounted by problem by noting that "this week, the Obama administration postponed it (the employer mandate) until 2015."
If Rugaber knew the relevant portion of the law, he would know that employers can't merrily hire full-timers between now and the end of 2014 without consequence. The most time they have is, as of now, a bit less than five months. All one has to do is add one year to succinct guidance issued earlier this year by one law firm (one of at least hundreds of examples, I'm sure), to understand why:
Prepare Now for the Obamacare Employer Mandate
While 2014 is still technically “next year,” employers of 50 or more people should be mindful that, in determining their liability for the health insurance mandate, the government will rely on 2013 data.
With the one-year postponement -- though one never knows given the arbitrary nature of our government these days -- the liability determination beginning in 2015 should be based on 2014 data. Employers aren't going to alter their hiring strategies for five months only to have to switch back starting in January 2014.
Yesterday, Rugaber finally recognized some of the reality, with one significant oversight (bolds are mine throughout the rest of this post):
The U.S. economy is steadily adding jobs - just not at a consistently strong pace.
July's modest gain of 162,000 jobs was the smallest since March. And most of the job growth came in lower-paying industries or part-time work.
The unemployment rate fell from 7.6 percent to a 4 1/2-year low of 7.4 percent, still well above the 5 percent to 6 percent typical of a healthy economy. The rate fell because more Americans said they were working, though some people stopped looking for a job and were no longer counted as unemployed.
All told, Friday's report from the Labor Department pointed to a less-than-robust job market. It suggested that the economy's subpar growth and modest consumer spending are making many businesses cautious about hiring.
That's all fine, but Rugaber, in contrast to June, failed to cite ObamaCare as a factor.
Ironically, as I noted at my home blog yesterday, the seasonal adjustment calculations came out lower than one might have expected based on the raw (i.e., not seasonally adjusted) job additions, leaving one to wonder if Rugaber and others would have largely ignored the part-time trend once again if the numbers had came in, as one arguably might have expected, at 200,000 or higher. But it appears that even the Administration's Press has its limits.
Rugaber also couldn't bring himself to characterize yesterday's report as "disappointing," leaving it to economist Paul Ashworth to do that for him in a weak statement ("While July itself was a bit disappointing, the Fed will be looking at the cumulative improvement") which made July look like a one-off.
Okay, Paul, let's look at the "cumulative improvement." If you can find a lot of "cumulative improvement" in the following cumuluative monthly results far this year, you have better (or more biased) eyes than I:
So far this year, the economy has added an average of over 100,000 part-time jobs per month while averaging only 32,000 full-time jobs per month.
One could try to say that the trend towards part-timers didn't become obvious until June, but it's not true. May's 2-to-1 year-to-date ratio should have been troubling, given that the overall full-time to part-time ratio in the economy is still about 4-to-1.
Besides, the trend toward part-timers has been visible since at least the middle of 2010. Two examples: First, from May 2010 to May 2012, the economy added 1.73 million full-time jobs and 1.39 million part-time jobs -- a ratio of only 1.24-to-1; second, from June 2010 through September 2011, the economy added zero -- that's right, zero -- full-time jobs.
Additionally, as seen in the comparison to the Establishment Survey numbers, the Household's Survey's employment gains so far this year are far lower. Why? Good question. The AP supposedly pays its economics reporters to look into these things. They've had months to do so, and haven't.
What may be happening is that the Household Survey isn't as good at detecting increases in total part-time employment on a timely basis as the Establishment Survey of employers is at determining overall payroll employment. If that's the case, if and when the Establishment Survey catches up, it will be by reporting hundreds of thousands more part-timers and relatively few full-timers. We'll have to see. If the AP can come up with a better take, I'd like to see it.
In an analysis piece today, the AP's Paul Wiseman didn't worry about calling yesterday's result "disappointing," mentioned ObamaCare, and was otherwise pretty rough on the job market's performance:
NEW JOBS DISPROPORTIONATELY LOW-PAY OR PART-TIME
The 162,000 jobs the economy added in July were a disappointment. The quality of the jobs was even worse.
A disproportionate number of the added jobs were part-time or low-paying - or both.
Part-time work accounted for more than 65 percent of the positions employers added in July. Low-paying retailers, restaurants and bars supplied more than half July's job gain.
"You're getting jobs added, but they might not be the best-quality job," says John Canally, an economist with LPL Financial in Boston.
So far this year, low-paying industries have provided 61 percent of the nation's job growth, even though these industries represent just 39 percent of overall U.S. jobs, according to Labor Department numbers analyzed by Moody's Analytics. Mid-paying industries have contributed just 22 percent of this year's job gain.
Analysts say some employers are offering part-time over full-time work to sidestep the new health care law's rule that they provide medical coverage for permanent workers. (The Obama administration has delayed that provision for a year.)
... The low quality of the added jobs could help explain something that has puzzled economists: How has the U.S. economy managed to add an average of roughly 200,000 jobs a month this year even though it grew at a tepid annual rate below 2 percent in the first half of the year?
Some are proposing an answer: Perhaps a chronically slow-growth economy can't generate many good-paying jobs - but can produce lots of part-time or lower-wage retail and restaurant work.
One annoying aspect of Wiseman's writeup is that he repeated the same mistake establishment press writers virtually always make, namely in treating the seasonally adjusted numbers as what actually happened, resulting in the following embarrassing sentences anyone should recognize as faulty:
Not all July's new jobs were low-paying. Local schools hired more than 10,000 teachers and other employees.
Uh, not exactly:
Local schools did not "hire" 10,000 people in July, Paul. Instead they let go of almost 1.2 million. That converted to a seasonally adjusted +10,000 because the raw result is not as negative as it has been in most previous years.
The way Wiseman wrote it up would make one believe that he has no comprehension of raw vs. seasonally adjusted numbers. Say it ain't so, Paul.
Cross-posted at BizzyBlog.com.