Part Time America and the Effects on Wage Growth

The September 1, 2017 jobs report from the Bureau of Labor Statistics showed a slight slowdown in job growth and a slight uptick in for unemployment from the prior month. Wage growth continued to putter along at a disappointing 2.5% annual rate for the fifth straight month.

One reason for the lack of wage growth is that an increasing number of Americans have part time jobs and wages for these jobs have shown steeper declines and poorer wage growth than other types of jobs.

Federal Reserve Chair Janet Yellen has talked about part-timers at nearly every speech in the last six months and at both of her past two testimonies to Congress.

The Affordable Care Act is a reason why part-time work remains high. At the start of 2015, a key provision in the law stated that large business employers had to offer health care coverage for employees who work 30 hours or more per week. Several companies like Walmart (WMT), Target (TGT), Trader Joe’s, Home Depot (HD) lowered the number of hours that employees worked to avoid paying health care.

The advent of Uber and Lyft in recent years have also increased opportunities for part-time work and changed perceptions about it. The lack of barriers to entry into part-time work like ride sharing also keeps downward pressure on wages.

About Chris Donnelly

Christopher J. Donnelly, is an experienced attorney, bond analyst and fixed income strategist, with years of experience in structured finance, distressed bonds and bond related litigation in a variety of industries and the emerging markets. He is a graduate of Rutgers University (BA), The University of Pennsylvania (JD) and New York University, (LLM in Taxation). Chris is a Managing Director of Straacom, LLC and can be contacted at Straacom provides strategic research, analysis and communications for publication and on assignment for private clients.

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