Tuesday, October 27, 2009

A Full-Time Job Ain’t What It Used To Be

News item: October 27, 2009 -- San Francisco Chronicle -- The California State Employment Development Department estimates that the underemployment rate hit 21.9 percent in September. The underemployment rate includes people who could get only part-time work as well as those who want jobs but were too discouraged to look, in addition to the jobless who are actively looking for work.

It is good to see that economists and employment development officials are starting to pay more attention to the underemployment rate.  (California started collecting statistics on underemployment in 1994).  The traditional unemployment rate was based on people who were receiving unemployment compensation. Those people are required to look for work. If you give up looking, you can be cut off unemployment compensation.  This is the typical blame-the-victim attitude that is part and parcel of the American "rugged individualism" myth, which has given us, among other things, the worst unemployment compensation system in the industrialized world.  And among its many faults is the fact that it woefully undercounts the unemployed and doesn't count the underemployed. 

But to get a true picture of the economy, the statistics have to be developed still further to consider that over the years the definition of full-time employment has changed.
I am 54 years old.  I grew up with the definition of full-time work being 40 hours a week.  That was what my father worked.  And 30 years ago, when I entered the labor force, my work weeks, with various temporary agencies, were typically 40 hours. In the late 1980's, I got a so-called "regular, permanent" job with a corporation that labeled 37 1/2 hours full time.  That amount and even 35 hours are often considered full time nowadays.

Calculating the full time work week bears a striking similarity to calculating the Earned Run Average for baseball pitchers.  A regulation baseball game is 9 innings. Every year, a few go extra innings and a few get rain-shortened, but most go 9. And years ago, when starting pitchers usually took the mound with the intention of finishing what they started, it made sense to calculate the ERA in terms of 9 innings. Now that a “quality start” is considered 6 innings, and 5 complete games in a season is considered a major achievement, should not the ERA be calculated in terms of six innings?

Likewise, although we of a certain age are used to the definition of a full-time job as being 40 hours a week, and such jobs still do exist, is 40 still the practical standard? A friend of mine recently started a new job.  He found it after being laid off from another position five months ago.  He was very excited about being hired full time.  However, it turns out that his employer considers anything over 30 hours to be full time.  I mentioned this to another friend and she said that, yes, nowadays 32 hours is considered full time. I consider 30 to 32 hours a week to be three-quarter time employment, i.e., part time. 

Many years ago, this trend toward a reduced standard work week would have been applauded.  I remember some people arguing that the way to create full employment (a phrase used seldom, if ever, anymore) was to shorten the work week for everyone and employ more people. The ideal was four hours a day.  The problem with that is that over the years the cost of living has kept growing while the work week and wages have diminished and overtime rules have been changed so that overtime hours are no longer calculated by the day but rather by the week.  So, for example, my friend with the 30-hour full-time job, is pulling a double shift today and being given an extra day off tomorrow, so he will not get overtime pay for having worked 12 hours today.

Now, consider how low wages are. A perusal of Craigslist shows that $13 an hour is considered a big deal. My friend is starting at $8 an hour, although he'll get a raise to $10 at the end of the probationary period. The shorter full-time work week will mean that after the raise my friend will be grossing about $1200 a month or $14,400 per year.  Health benefits kick in after six months but he will have to pay half the premium. He's in generally good health, but he has some dental problems that need to be taken care of. I wonder if the benefits include dental and if they do, will his current problem will be excluded as a "pre-existing" condition?

Still, he's in a better position than I  am. I make over $20 an hour, but I get only eleven hours a week, not enough for benefits. Not only do I lack health insurance, but I also lack vacation time and sick leave. I literally have gone to work two days after a stroke--twice, in 2005 and 2006. I recently read that I am one of 54 million Americans, mostly low-wage workers, who get no paid sick leave.  Think about that this winter if you are sitting on a bus or train or in an office near someone who is coughing and sneezing. The American Way of work and healthcare makes it too expensive for some people to take the time off to take care of themselves or an ill family member.

My newly-employed friend is a pure W-2 employee, which means he can expect a refund next April 15.  I grossed a little over $13,000 last year and had to pay taxes as I typically do each year, because about $2500 of my income is freelance, and as you self-employed readers know, we get clobbered at tax time, especially if we are phone - desk - computer-type information workers, who have no employees, inventory, and other accoutrements of the storefronts that signified self-employment in the days that the tax rules were written.

But I digress.  My point is that politicians and bureaucrats, often at the behest of big business, play games with the statistics: what constitutes full-time employment, what constitutes part-time employment, what constitutes overtime, what constitutes being unemployed through no fault of your own.  The workers are the losers in a game they never wanted to play in the first place.  It's very expensive to live in the San Francisco Bay Area, and everything from taxes to health care to the definition of full-time employment make it harder every year, especially for people who live in expensive urban areas such as this one.

What to do about it?  There are a lot of things that can be done in the name of justice and commonsense business practice, such as "Medicare for all," which would take the burden of health care off the employer.  (The cost of benefits is a reason employers are reluctant to hire, thus the "jobless recovery" of recent recessions). Paid sick leave for part-time workers, taxation based on how much money you make rather than how you make it, and the use of our tax money for things such as a universal, single-payer health care system, rather than war, tax breaks for the super rich, and bailouts for banksters, would make this country more, and more equitably, prosperous overall.

But even these are halfway measures.  We will never have true peace, justice, and prosperity for all until we get rid of the idea of money altogether.  This theme will be re-sounded in this blog again and again -- get used to it -- and it is one of the central theses of the book I'm working on, called "The Social Contract Renewed."

More on that at another time.