November 6 2012

Part-time Nation: How Not to Help the Middle Class

Charlotte Hays

Real estate mogul, former Obama supporter, and New York Daily News owner Mortimer Zuckerman says that the U.S. has reached “a disastrous new normal” with regard to employment:

The number of Americans now working part time has soared to 8.3 million—up 313,000 in the past two months alone. With economic growth declining or stagnant for quarter after quarter, many companies feel it is too risky to take on people full time.

This has created an army of "underutilized labor." America's narrow unemployment rate is 7.9%, but it is 14.6% when accounting for involuntary part-time workers. The number of Americans working full time has declined by 5.9 million since September 2007, while the number working part time has jumped by 2.6 million.

Over the same period, according to the National Employment Law Project, low-wage occupations have grown nearly three times as fast as mid-wage and higher-wage ones. Whereas lower-wage jobs were 21% of losses during the recession, they have accounted for 58% of new jobs since—and these have the highest proportion of part-time jobs. By contrast, mid-wage occupations were 60% of recession losses but have been only 22% of recovery growth. Higher-wage occupations were 19% of jobs lost and have been 20% of jobs recovered. …

This underscores the difference between job quantity and job quality. When low-wage jobs are growing in number, mid-wage jobs are disappearing and higher-wage jobs are paying more, the result is a hollowed-out middle class.

Obamacare, if not repealed, will only add to this problem: because employers of more than 50 people will be forced to provide health insurance that meets government standards, there will be a huge incentive to keep the number of full-time employees below that number.

Social mobility has been a hallmark of American society, but, as Zuckerman points out, this is now imperiled. The way families and individuals have made it into the middle class has been through good habits and good jobs.  

As Charles Murray noted in Coming Apart, Americans have traditionally described themselves as middle class. But this doesn’t seem to be the case anymore. Quoting data from the Pew Research Center, Zuckerman says that one third of Americans now identify themselves as lower class or lower middle class, up by a quarter from 2008.

It is ironic that President Obama has talked so much about the middle class in his campaign, while at the same time creating an economy that prevents people from rising to or remaining in the middle class. Indeed, President Obama seems to view the middle class primarily as a possible interest group in need of government support. He doesn’t realize that, if government got out of the way, people could--and would--build their own prosperity. That is how America has in the past created and nurtured a middle class.

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