Part-Time Work Is the Solution, Not the Problem

The recent Teamsters settlement with United Parcel Service underscored the growing preoccupation of organized labor with part-time work. The official labor view, as promoted by the Union’s spin doctors, was that part-time employees are under represented, over utilized, under compensated, and overlooked. Fed by lingering public anxiety over job security, that view called up the specter of an increasingly disposable work force driven by fleeting marketplace demand.

Lost in the debate was that part-time employment is a stable component of our dynamic economy, and the arrangement of choice for most part-time workers and their employers. Left unfettered by excessive regulation and unionization, this vital organizational tool will provide increased workplace flexibility, boost labor productivity, and strengthen America’s competitive advantage in the world economy.

Part-time workers numbered 21.5 million, or 17.2 percent of the work force, in the March 1997 Current Population Survey. That’s only two points up from 15.5 percent when Census began counting in 1969 and lower than at any time since 1974. Of all part-time workers in 1997, 81.6 percent characterized their job status as voluntary, while 17.1 percent cited economic circumstances or an inability to find full-time work. Voluntary part-time work increases with economic good times, as more full-time jobs become available for those who want them.

Among those choosing part-time employ-ment are youth who want to earn extra money, older workers phasing in their retirement, full-time workers earning extra income, and women juggling employment and household responsibilities. These arrangements allow workers to adjust their work lives to serve personal and family needs, and can provide experience and skills needed to advance to full-time permanent jobs.

According to surveys of older workers conducted by the University of Michigan’s Institute for Social Research, nearly three-fourths of respondents would prefer phas-ing in retirement by working part-time instead of having to leave the work force abruptly. Shorter hours would provide the opportunity to continue to earn income, yet have more time for leisure activities or to take care of parents or grandchildren. Yet many older workers are locked into a health or pension plan that would be jeopardized if they left their current employer.

Convenience sometimes comes at a price in pay and benefits. Even so, worker shortages have prompted many employers to raise wages or to adopt new benefit plans to attract applicants. The problem comes when compensation is mandated and management must weigh the trade-offs between wages, productivity, and training costs, and either raise prices or trim services to make up the difference, or look for another product or industry.

That’s why European economies, whose rigid workplace rules have forced unemployment rates into double digits, have been moving toward more flexibility, including flex-time, phased retirement, reduced work hours, temporary employment, and self-contracting. In 1995, part-time and temporary workers were 28 percent of the work force in France, nearly 30 percent in Germany, and 47% in the Netherlands. In a 1994 economic report, the Organization for Economic Cooperation and Development stated that, "Increasing short-term and lifetime flexibility of working time in contracts voluntarily entered into by employers and workers would lead to higher employment ... Governments have a role to play in this process by removing obstacles to, and facilitating, reductions in working time and by reducing existing taxation and social security provisions which discriminate against part-time work."

What the rest of the world is beginning to discover, and American seems to want to forget, is that mandating equality through legislation and collective bargaining only results in less employment and more in- equality. The role of government should be to establish a free marketplace, let wages and benefits reflect the conditions of labor supply and demand, and get out of the way.

Estimates are that $700 billion is tied up each year in regulating how America makes its money, while another $750 billion goes to benefits, services, subsidies, and special tax breaks that mandate who should get it and how it should be spent. Reducing the regulatory burden would create new employment opportunities through increased workplace flexibility. But far more economic progress would come from making even a low-skilled wage a living wage. Research conducted for the Institute for SocioEconomic Studies at Columbia University has found that

redirecting the money our government now spends on income support to fund a national tax rebate could provide a family of four with $1,000 a month, combine with even a part-time minimum wage job to provide a livable income, and make welfare unnecessary.

Allan Ostergren is a Senior Research Associate at the Institute for SocioEconomic Studies