18 Dec 2013

Full-Time vs. Part-Time Workers

Economics, Health Legislation 49 Comments

Does anyone else find this chart shocking?

Here’s the source. I was looking up the proportion of part-time versus full-time workers to see if the passage of ObamaCare had any noticeable impact.

(Note: Be sure to look carefully at the left and right axes. It’s not that the whole composition of the workforce has flipped.)

I don’t think you can pin the blame on ObamaCare in isolation (it passed in March 2010), but the so-called Great Recession has been qualitatively worse than the dot-com bust. My short explanation is that the combination of economic turmoil and “regime uncertainty” in general (not just ObamaCare) has made employers very reluctant to commit to a full-time hire.

49 Responses to “Full-Time vs. Part-Time Workers”

  1. Major_Freedom says:

    “AAAARRRRRGGHHHHH!!!!!! The correct answer is….NOT ENOUGH INFLATION.”

    “Darn it, you’re setting us back to the stone ages.”

    Just trying to get inside the heads of monetary socialists.

    —————————————

    Murphy, the chart looks shocking, but we’re talking only a couple of percent right? Is 83% to 81% a bigger fall than I can appreciate? What am I missing?

    • Rick Hull says:

      Also, you would expect the two rate graphs to mirror each other, roughly. I’m not sure that including them both on one chart adds more signal than noise, disclaimers and all.

      • Ken B says:

        Different ways of displaying information bring out different aspects. There is no one size fits all correct way to show data. The intent here is to show the strong negative correlation in the changes. People drawing graphs routinely show lines moving in parallel to show positive correlation. This mirror reflaction is the same idea. As long as it’s clearly labelled and *does not hide the data* it’s a legitimate way of presenting data.

        I got your back here Murphy!

    • Gamble says:

      Good question Major. Why is a 2-3% swap a big deal? Other than it goes against the propaganda of how many great jobs have been created.

      • Ken B says:

        Bob was looking for numbers relevant to an effect. He found this, which certainly shows a strong correlation. Imagine Bob had written a piece saying “regime uncertainty” including obamacare had led to a noticeable switch from full time to part time. Then I dragged out the stats and drew a grapsh showing that in the 3% of workers affected the corelation was positive not negative. That would discredit Bob’s argument, even with just 2-3% of workers.
        So the 2-3% may be relevant to hwo important Bob’s conclusion is, but not its correctness.

        • Gamble says:

          I think this graph shows that employers are trying to remain/become profitable by avoiding full time employees and the cost associated with full time employees as compared to part timers.

          I really wish America went to a cash for a days labor mentality. Allow the individual to pay taxes, pay for healthcare and save for retirement. Additionally, all employment laws that center around an employee number threshold, such as 49-50 or 499-500 should be abolished immediately. Finally all employment laws related to age of employee, minimum wage, hours in the day, break times, etc., should be abolished immediately.

          The free market would create a more preferable work/reward arrangement as compared to this Federal monstrosity…

          • Peter says:

            We are not “allowed” to pay taxes, pay for healthcare and save for retirement?
            Who is not allowed to pay taxes? Where is this magical land you speak of? I pray for the day when paying taxes becomes an illegal activity.

            Also: “this graph shows that employers are trying to remain/become profitable by avoiding full time employees and the cost associated with full time employees as compared to part timers”
            The graph suggests no such thing. It could as easily (but perhaps less plausibly) be interpreted as: prospective employees prefer part time jobs over full time jobs (perhaps to have more time with the kids, who knows?), and employers are responding to this trend by creating more part time opportunities.

            • Major_Freedom says:

              “It could as easily…be interpreted as…”

              This is precisely why positivism does not work in economics. The same data patterns can be made by more than one intentional behavior.

              Graphs don’t communicate intentions. We impute intentional behavior to observations.

            • Anonymous says:

              Hey Peter,

              If people wanted to spend more time with their family, the would reduce consumption debt and go back to a single income earner. Employers, mainly zero liability corporations have done this, not employees.

              Regarding taxes you completely and purposely misconstrued my meaning. Ever since Milton Friedman helped institute withholding tax, nobody has had any choice.

              Paying for your own insurance will only happen when employers do not receive tax privilege in purchasing healthcare when compared to the individual. Retirement is yet another item distorted by tax policy. For starters, reducing debt and paying off your mortgage should be tax deferred.

              I don’t even want to try to explain it to you. Alls I can say is tax code is designed to keep the rich rich and the poor poor regardless of what “they” say.

              • peter says:

                Dude, don’t get all worked up about this, I didn’t say I disagreed with you, just that you can’t make the “conclusions” you made.
                And with regards to your “solutions”, the only effective tax policy is no tax policy. The worst thing is to use tax policy to en(dis)courage behavior, that’s just adding more statist nonsense.

            • Gamble says:

              Peter the graph does show employers trying to dodge the burned of full time employees although it requires more input to conclude this. I can provide you reams of data showing employers planning this. The graph came after they determined obamcareless would sink them . Just make everybody part time, no worries.

              Regarding individuals versus business paying for taxes, healthcare and retirement, I stand by my remark. It is not that I am saying taxes are a privilege. I was saying tax code has screwed the individual royally by confusing what is income and a business deduction. W2 employees get screwed because they have no say and get no deductions. Your salary is suppose to cover everything,lol. Retirement is jacked because for 1, you cant touch your money till 59.5. Most people see crashes coming and would rather pull their money and pay down their mortgage but tax policy prohibits obvious, rational behavior from occurring.

              Peter don’t purposely misconstrue my intent. Tax code and business regulation are designed to keep the rich rich and the poor poor, regardless of what “they” say!

              • Major_Freedom says:

                “Peter the graph does show employers trying to dodge the burned of full time employees although it requires more input to conclude this. ”

                Then it doesn’t actually show it.

  2. joe says:

    It’s a lot of fun to play the Obamacare vs the Labor Force game. The best one is looking at private sector employment before and after Obamacare was signed into law on March 2010.

    Private Payroll Employment (thousands)
    March 1999 107938
    March 2010 106961
    March 2013 113454

    So in the 11 years prior to the passage of Obamacare, fewer than zero jobs were added to the private sector. In the 3 years following the passage of Obamacare, nearly 7 million jobs were added to the private sector.

    It’s quite the job killer.

    • skylien says:

      Let me guess what your favourite hobbies are:

      1. Cherry picking
      2. Post hoc ergo propter hoc

    • Gamble says:

      Hi Joe,

      I think you just said ObamaCare is making America sick?

      • Gamble says:

        For clarification sakes, the amount of healthcare employees should be declining, rather than increasing. Assuming we are becoming healthier. Along these same lines of thinking, it is not surprising doctors recently came out and said vitamins are worthless. They are obviously afraid vitamins, minerals herbs and alternative medicine may eventually be included as an approved Obamcareless expense, ultimately reducing the need for more healthcare professionals. IT is a tragedy my HSA ( tax free health care savings account) cannot be used for items such as hot-tubs, health club memberships vitamins, Cannabis and other real, alternative medicines. I understand the market distortions created by tax privilege but we are currently engulfed in market distortions, why not some that actually make sense…

    • Major_Freedom says:

      Where are you getting this data, joe?

  3. Eric says:

    The really disturbing part is that the graph designer is intentionally misleading by choosing the different scales. The intent is to get the reader to think that in 2009 there was some change that flipped the relationship between full time and part time workers. They even call it “a conspicuous crossover” => they want us to believe that there was some equality in the numbers between the two charts in 2009, that 81.5% is somehow equal to 18.5%!

    And yes, a weak recovery makes employers less likely to commit to full time workers. 2% less.

    • Ken B says:

      Does the graph vivdly show a correlation? It does and it’s clearly labelled.

      You are thinking How To Lie With Statistics. You should be thinking The Visual Display Of Quantitative Information.

      Both books I recommend to anyone who cares about data and evidence. And to Rothbardians too.

      • skylien says:

        “How To Lie With Statistics”

        I have put it into my shopping cart.

        • Ken B says:

          It’s a great book, and fun.
          The Tufte is expensive but seriously worth reading. (It was recommended to me in person by the head of Bell Labs.)

          • skylien says:

            I’ll think about Tufte.

            Thanks for the recommendations.

            In general I really like it to get book recommendations, and I really mean it when I am asking for a book recommendation. I am not doing that for any useless rhetorical effect.

      • skylien says:

        “And to Rothbardians too.”

        The singling out of Rothbardians is not fair here. They are not saying that data isn’t important in general. They only disagree in how much and what you can be proved with it.

        • Ken B says:

          It’s a shot skylien. Gimme a break, I’ve just put up several comments defending Bob’s acumen and integrity. There’s only so much one man can stand before he has to howl.
          :)

          • skylien says:

            Ok, I wasn’t sure, since you had already some heated debates about that issue..

            ;)

            • Ken B says:

              Geez. I’m even definding Bob from some guy named Murphy now!

    • Harold says:

      The scales are the same – only the position is changed. Each scale spans 5 percent, so it is not so bad, although he term crossover seems misleading.

      • skylien says:

        I thought the same. The crossover here is by design. The real crossover for this chart can only be at 50:50..

      • Ken B says:

        Yes. Misleading is too strong a word, depending on who the audience is, but if Murphy had used it on a blog like this I’d have objected. But Murphy was careful not to use the word. He copied the graph and not the sentence. He gave the source but without endorsement.

        • Harold says:

          Murphy pointed out the labels and did not say crossover. These mild criticisms are directed at the source.

  4. Our Own Troll “Joe” Shows How to Pick Cherries says:

    [...] my post about part-time versus full-time employment, frequent commenter and critic Joe wrote: It’s a lot [...]

  5. Bob Murphy says:

    Hey everybody,

    I agree that this chart is very misleading, especially if you read it in the context of the original post by its creator. I am NOT using this chart in my class on ObamaCare.

    Yes, the axes are labeled, but I still think it visually gives the effect that the tables have flipped.

    • Ken B says:

      Let’s fight this out Murphy. I think Bob was careful and fair in presenting this graph. He even explicitly called out the axes. I think the conclusions he drew from the graph were reasonable, and fair. You on the other hand think he’s presenting misleading stuff. Now normally I’d defer to you, Dr Murphy, in any criticism of Bob, but in this case I want to defend him.

      • Bob Murphy says:

        ??? If I had a graph that showed this same information, I would swap it out. If I can get it for my class, I’ll put it in here.

        If I put up a misleading graph and say, “Watch out when you read this thing,” then I don’t think *I* am being misleading.

        • Ken B says:

          This is getting confusing and I wonder if you’ve picked up on my jest. I am glad you now agree *Bob* was not misleading, though his source might have been. However:

          To me the best way to show this is to show both graphs against the same axis, and then animate the lower one sliding up to show the mirror effect. Then sliding back down once the effect is seen. This would also be the best way to show two graphs that matched perfectly.

          • Bob Murphy says:

            And we should hire Morgan Freeman to narrate the–

            Oh.

            • Ken B says:

              Yes. That’s a lot to ask in a blog post.

              Not Morgan Freeman. Liev Schreiber. Man is the best narrator ever.

  6. RPLong says:

    Bob, have you seen Kevin Erdmann’s series of provocative posts on minimum wage and labor force composition? You may be interested in taking a look, if you haven’t already seen it.

  7. Matt M (Dude Where's My Freedom) says:

    Putting aside the issues with the graph, I’m struggling to see why I should care about this.

    Jobs themselves (and the amount of hours worked) are a means to an end. Ideally, in a world without scarcity, we’d all work zero hours and enjoy abundance and luxury. From a long-term historical perspective, the amount of hours worked required to enjoy certain material benefits has been declining for hundreds of years. And that’s a good thing, right?

    So, all else being equal, more of the population working fewer hours is a good thing. Now, if you’d like to say that all else ISN’T equal and that the working of fewer hours is causing the average person’s standard of living to decline significantly, that’s a different point entirely, and may very well be correct. But in and of itself, the “average worker” working fewer hours isn’t necessarily bad.

    • Major_Freedom says:

      Excellent point Matt M.

      We have to constantly be vigilant and make an effort to remind ourselves to avoid, nay, to strictly eliminate, economically reasoning from past historical data. It’s a trap so easy to fall into, because we all have our ideas before we observe past economic data, and observing that past economic data often unconsciously triggers or stimulates those ideas, but we react to that by thinking it derived from the data itself. So we attach a reality to that economic data and believe it shows something on its own, when in reality it just made something already in your head click.

      But sometimes what’s already in our heads is NOT correct, and so what we believe to be a truth coming from the economic data itself, such as “OMG employment is falling ergo we’re worse off) is in actuality just our incorrect ideas being stimulated about an alleged constancy between hours worked and standard of living.

    • Harold says:

      I thought this also – reduced working hours is a good thing – we celebrate the shorter working week. However, this is only true if it is voluntary. As the sharp drop coincides with a recession, it seems vanishingly unlikely that the reason for the change was that suddenly everyone decided they would rather spend more time with their family.

      • Major_Freedom says:

        “However, this is only true if it is voluntary”

        Voluntary includes employers firing workers, and workers quitting their job.

        • Ken B says:

          Oddly enough I agree with MF and not Harold here. Employment is a contract between two parties, and those parties will have agreed its terms, including those which specify when and how either party may end the realtionship. If I decide to fire Bob I will do so according to the terms of an agreement Bob agreed to.

  8. Some Links says:

    [...] (and DeMuth’s essay), Jonah Goldberg has more on some of the unprincipled cronyism in play. Bob Murphy has some discouraging, but unsurprising, data on employment trends.  I agree with Bob’s diagnosis of the [...]

  9. Gamble says:

    Hi Peter,

    You wrote: peter
    “Dude, don’t get all worked up about this, I didn’t say I disagreed with you, just that you can’t make the “conclusions” you made.
    And with regards to your “solutions”, the only effective tax policy is no tax policy. The worst thing is to use tax policy to en(dis)courage behavior, that’s just adding more statist nonsense.”

    Yes I am worked up. Not at you. I have worked hard my entire life and now I see that hard-work has little to nothing to do with financial security and freedom. My joints are sore, my bones are tired and I have not even cracked 40. Up till a few years ago, I really did believe America was the land of the Free, it is not.

    Sorry for the argument as it is clear we are in basic agreement.

    Certainly zero tax policy is ideal but unrealistic considering the political nature of America. Sometimes the only real life action possible is a baby step, as frustrating as it may be. So I suggest an unwinding of tax policy. Anytime you can remove any government intervention tax policy, the better off we will be. Sometimes it takes words to unwind interventionist tax policy, sometimes it simply involves erasing existing tax policy.

    School vouchers for example. I know Milton Freidman was all for them and Gary North and other Austrians were against them. Sometimes I think Austrians are as human as anybody and take positions just to spite , be different or opposite of their supposed political enemy’s. I am a firm believer education vouchers are a step in the correct direction. It will be easier to first create an artificial education market with vouchers and then remove the tax support than it will be to first cut public education taxes. People simply don’t like taking a plunge into nowhere land.

    You can use my voucher hypothesis for every tax policy. Present a more free alternative rather than an axe. People don’t vote yes for axes but they do vote yes for a more free substitute. Libertarians are way too idealist and ignore the incredibly political nature of reality. You just cant speak freedom into existence, you have to pull the political levers.

    I tried a 10B dollar axe here in Colorado. It garnered only 33% of the vote. Way to idealistic. It cost me dearly but I learned a lot. People would have voted yes for something moderate. Sure it takes much more time and money to take baby steps but sometimes baby steps are the only method that will work.

    There are very few rugged individuals anymore. Baby steps…

  10. Gamble says:

    MF wrote :

    “Peter the graph does show employers trying to dodge the burned of full time employees although it requires more input to conclude this. ”

    Then it doesn’t actually show it.”

    You are correct. The only thing the graph shows is less full time jobs and more part time jobs. It does not show why. Is there any scenario in which you would believe the graph has useful meaning other than a fulltime/parttime shift?

  11. Krzysiu says:

    It is most probably tax avoidance. I see it in Poland quite often: you pay the minimum or so the rest goes under the table, both parties agree on it – it’s better to get less mandated benefits or non than not have job at all. Just businesses trying to survive financial and policy repression.

  12. buah merah wamena says:

    the only thing the graph shows is less full time jobs and more part time jobs. It does not show why.

    • Ken B says:

      Which is unusual amongst graphs, which usually are able to reach beyond the pedestrian task of illustrating corelation to the more exciting one of displaying causation.

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