San Francisco Fed: Rise in Involuntary Part-Timers Signals Changes in Labor Force

The share of the labor force working part-time but that would prefer to work full time has risen, according to a Federal Reserve Board of San Francisco study released yesterday. The study provided evidence that slack in the labor market is persisting even as the economy recovers. Such labor market slack, which surged to a 6-percent peak during the Great Recession, has been slower to improve than overall unemployment levels.

The ratio of the rate of involuntary part-time work to the unemployment rate rose from about 0.55 during the late 1990s to about 0.75 in early 2015, suggesting employers may be more reliant on part-time work than before the recession.

The report cites several “structural factors” that contributed to the rise, such as industry changes, demographics, tax rules and the costs of health benefits.