August's unemployment report is worse than the big fat zero in job growth. People being forced into part-time jobs skyrocketed by 430,000 in a month, to a tally of 8,826,000 people. That's a 5.12% monthly jump. People in part-time jobs due to slack work conditions increased 146,000, or 2.5%. Slack business conditions cause employers to cut hours of their employees. People who could only get a part-time job but want and need full time, increased by 219,000, which is a whopping 8.7%.
Part time workers who need full time income is the ultimate hidden wage arbitrage. They count as employed, the job counts as a payroll job, yet in terms of wages and earnings, these people are hurting. It's bad enough one simply cannot make it on a full-time minimum wage job, period, in the United States. Forced to go part-time and your income can be cut in half. Involuntary Part-time also isn't a good sign for the economy. Slack business conditions as a reason for involuntary part-time work is often the predecessor to being laid off completely.
Below is a graph of forced part-time because they got their hours cut as a percentage of the total employed. If you want to see a recession economic indicator, this looks like a pretty damn strong one. See how closely the percentage increase matches recessions, the gray bars?
August saw the part-time due to slack work to employed percentage uptick from 4.08% to 4.17%. What is more disturbing is how this percentage has stayed so high since the start of the Great Recession. Quick, someone tell the NBER, who declared the recession over in July 2009.
Average earnings for the private sector (drum roll please), decreased 3¢, $23.09/hr., a 0.1% decrease in a month. The worker bees, or non-supervisory jobs average pay decreased 2¢, or 0.1%, to $19.47/hr. For the year, wages have increased 1.85%. Realize these wages are not real, or adjusted for inflation. The CPI index has increased 3.6% from July 2010 until July 2011. In other words, earnings are not keeping up with inflation. You could see this also in real income data as well.
The average work week dropped 0.1 for all nonfarm payrolls to 34.2 hrs. 35 Hours is cut off for full-time. For all workers not classified as production or supervisory hours also dropped 0.1 to 33.5 hours. Manufacturing jobs are still full time, now 40.3 hours with 3.2 hours of overtime.
Take a look at how many industry sections are below full time hours. Is a common practice among employers to keep workers part-time, in order to deny them full-time benefits. It's also not good due to the same reasons as forced part-time due to slow business conditions.