The Employment Recovery EXPOSED: Full-Time vs. Part-Time and Temporary Jobs (Part 2)

Continued from: Huge Divergence Between the Velocity of Money and S&P Shows What Has Really Recovered During This Cycle (Part 1)

I keep hearing this interesting statistic that 77% of the jobs created so far in 2013 have been part-time jobs, which doesn't sound normal given that we're in a mature economic recovery. Emac's Bottom Line at broke out the recent data on August 21. She blamed the recent spike on health care reform:

Health Reform Turning U.S. Into Part-Time Nation

Part-time work accounted for a whopping 77% of the jobs the U.S. economy created from January through July, according to household survey data from the Bureau of Labor Statistics.

Specifically, this data show that the U.S. economy has created 953,000 jobs so far in 2013. Of that sum, 731,000 were part-time jobs versus just under a quarter, 23%, or 222,000, full-time jobs. This first-half trend held last year. Based on that federal survey, from January to July 2012, the U.S. economy created 1.4 million jobs. Of that sum, 53% were part-time jobs, 764,000, versus 658,000 or 47%, full-time jobs, reports FOX News analyst Steve Joachim.

But health care reform aside, it is well known that the U.S. has a structural unemployment problem. I'm going to chart out the data so you can see the long-term trends visually. In the chart below, you can see that the number of full-time jobs recovered a bit since the great recession ended, but it's still well below the 2007 high. On the other hand, the number of part-time jobs and temporary jobs both made new highs recently.

First, here's a chart comparing full-time employment to part-time employment since 1985 and 1999 via the St. Louis Fed's FRED database.

Full-Time (Blue) vs. Part-Time (Red) (1999-2013)

Source: St. Louis Fed

Full-Time (Blue) vs. Part-Time (Red) (1985-2013)

Source: St. Louis Fed

Next you can see that temporary jobs (red) also hit a new high.

Temporary Jobs (Red) vs. Full-Time Jobs (Blue) (1990-2013)

Source: St. Louis Fed

Finally, you can see what's going on more clearly with ratios. The green line is full-time jobs/part-time jobs and the orange line is full-time jobs/temporary jobs since July 1990.

 Full-Time/Part-Time Jobs (Green) vs. Full-Time/Temp Jobs (Orange) (1990-2013)

Source: St. Louis Fed

In conclusion, most of the full-time jobs that were created before the "Great Recession" have been replaced by part-time and temp jobs, and the trend hasn't reversed yet. Does this perma-temp and part-time market explain why corporate profits were at a record high in May? Also, what happens when the economy contracts again?
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