The unemployment rate and the monthly change in total payroll employment are clearly the most widely watched labor market indicators. Neither of these statistics measures an important consequence of the 2008 recession: adult men are working part-time at record rates. As the labor market turns the corner in 2012 the most important leading indicator may be the fraction of adult men employed in part-time jobs.
The following figure shows that the fraction of employed men who work part-time nearly doubled between 1986 and 2011. By 2011 about one third of employed men age 20-24 worked part-time, and 7.4% of employed men age 25-54 held part-time jobs. About 80% of the increase in part-time work for the 25-54 age group occurred during the 2008 recession. About 2.5 million full-time jobs were lost during the recession for men in the 20-24 and 25-54 age groups. It is less well known that the recession caused about 1.5 million adult men in these age groups to switch from full-time to part-time work. The patterns are somewhat different for women, but I will leave that for another post.
The following chart shows that the overall employment to population ratio dropped by 11.4% for men age 20-24 and 6.7% for men age 25-54 between January 2008 and January 2010. These large employment declines understate the depth of the downturn because they treat all jobs the same, whether they are part-time or full-time. The full-time employment to population ratio dropped by 13.8% for men age 20-24 and 8.9% for men age 25-54. These precipitous drops in full-time employment rates were accompanied by increases in part-time employment rates of just over 2%.
The labor market has been slowly recovering since January of 2010. The following chart shows that the overall employment to population ratio for men age 20-24 grew by 4% over the past two years. The length of the workweek did not change much for these younger men because about two thirds work full-time, and full-time employment growth was about double part-time employment growth.
The employment to population ratio of men age 25-54 has grown by 1.5% since January of 2010. The full-time employment rate increased by 2% while there was a slight decrease of 0.5% in the part-time employment rate. The length of the average workweek increased slightly over the past two years these men as some part-time jobs were replaced by full-time employment.
A necessary component of a solid recovery is the transition to full-time work for the (at least) 1.5 million adult men who work part-time jobs because of the weak economy. This change will not appear as an increase in payroll employment or a reduction in the unemployment rate. A key leading indicator that that the economic recovery is finally gaining strength will be more substantial decreases in the fraction of adult men who work part-time.