June’s cautious economic recovery is based in part-time work and vulnerable industries


https://www.washingtonpost.com/business/2020/07/02/junes-cautious-economic-recovery-is-based-part-time-work-vulnerable-industries/?fbclid=IwAR290sM5RZgwuxNMBDi1chv_i1ulzy4zY2KF4f1cDUMCsiTTpME2wkGVM6s&utm_campaign=wp_main&utm_medium=social&utm_source=facebook

 

The June unemployment rate of 11.1 percent, down from a peak of 14.7 percent in April, reflects a continuing, cautious economic recovery. What those numbers don’t show is an increase in employment driven disproportionately by part-time work and industries that are vulnerable to another shutdown.

The unemployment rate is a blunt tool. It takes into account anyone who works, even if they work for only one hour a week. And part-time employment has recovered much more quickly from April’s catastrophic losses than full-time employment. While full-time employment is still 12 percent lower than it was in February, part-time employment is back to pre-pandemic levels.

According to the Labor Department’s survey of American households, many of those workers would work full-time if they could and are working part-time only because of poor economic conditions. The number of people pushed into part-time work has more than doubled since February. Meanwhile, the number of people who work part-time by choice is still down by 23 percent.

 

 

The unemployment rate isn’t wrong: Part-time work is still work. However, those jobs have already proved to be vulnerable to a slowing economy. Anyone pushed into part-time work by the coronavirus’s initial shock to the economy may be even more vulnerable in the case of future shutdowns. And part-time workers may not have access to benefits such as health insurance that are available to full-time workers.

The industries that bounced back in May and June are also at the mercy of future shutdowns as coronavirus cases surge across the Sun Belt. For instance, unemployment in leisure and hospitality is still very high but dropped by 10 percentage points from April’s staggering 40 percent. Retail and wholesale unemployment dropped by a third. In contrast, finance, government and professional services have had a slow start to recovery. Unemployment in the information industry actually increased from May to June.

 

 

If the greatest gains in employment are in industries that suffered most in the early stages of the pandemic, those gains are vulnerable to future waves of shutdowns. Meanwhile, less-volatile industries may continue to be slow to bounce back. A Congressional Budget Office report predicted that the unemployment rate is expected to stay above its pre-pandemic levels through the end of 2030.

 

 

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