August Unemployment Report & Part-Time Jobs

This post will examine some of the unspoken aspects of Augusts report on employment

Erica worked for a retail company in the western United States. She worked 40 hours a week and enjoyed her job very much. She earned a little above minimum wage. The company did not offer medical benefits, but provided an educational reimbursement program that paid for her to earn a certificate as a phlebotomist.  Unfortunately, before President Obama delayed the requirement for companies with more than 50 employees to provide health insurance to all full-time employees, her employer reduced all sales associates hours from 40 to 28 hours a week. Erica lost 27% of her income.

Why Do We Believe Their Numbers?

The Department of Labor released employment numbers last Friday. We find troubling elements of the report and want to shine a light on some issues.

The report stated “Total nonfarm payroll employment increased by 162,000 in July, and the unemployment rate edged down to 7.4 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade, food services and drinking places, financial activities, and wholesale trade.”

We find two major problems with these statements:

• The industries with the largest increases—retail, food service, drinking, finances, and wholesale—do not pay high wages. In fact, most pay just above minimum wage
• The report states employment increased by 162,000 BUT
  • Later it adds “Total nonfarm payroll employment for May was revised from +195,000 to +176,000, and the change for June was revised from +195,000 to +188,000.”
  • This pattern of declaring semi-optimistic gains in the month, but then downgrading them months later when no one is watching troubles us. Why should we believe these numbers?

Hidden Causes of the Increase in Part-Time Employment

They reported “The average workweek for all employees on private nonfarm payrolls decreased by 0.1 hour in July to 34.4 hours.”

Many full-time workers in retail, education, and food services lost 11-15 hours pay a week to avoid providing medical benefits demanded by the Affordable Healthcare Act.

Monday we begin a new series about how to find satisfaction in poorly managed companies

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