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Part-time recovery

Rochester Business Journal
July 26, 2013

The worst economic downturn since the Great Depression ended in June 2009, but it appears someone forgot to tell millions of Americans. Among respondents to a new McClatchy-Marist Poll, 54 percent believe the nation's economy still is in recession.

It must be noted that in every other McClatchy-Marist Poll since 2008, the percentage was even higher. Nonetheless, the fact that after 40 straight months of private-sector job growth most Americans see the economy in negative terms is remarkable, depressing--or both.

What could cause so many Americans to believe the recession has not ended, when in truth the economy has been expanding for four years? Here's one possible answer: Their own experience--or that of people they know.

Count among them the unemployed, a group that has been declining in number but at 7.6 percent of the workforce--7 percent in the Rochester area--remains unusually large for an economy this far along in a recovery. In addition, millions of workers want to work full time but can find only part-time employment.

Classified by the Bureau of Labor Statistics as individuals who work part time "for economic reasons," these people number more than 8.2 million. That's the highest number in this category since October and nearly twice as many as when the recession began.

By contrast, the number of people working part time for non-economic reasons is smaller now than it was in the summer of 2007.
Some have been quick to point a finger at the Affordable Care Act, with its provision mandating that businesses with more than 50 full-time workers (full time defined as 30 or more hours weekly) provide health insurance or pay a penalty. But this blame seems largely misplaced. The number of Americans working part time for economic reasons has been persistently high since late 2008-roughly a year and half before the act became law. Moreover, the mandate will not take effect until 2015.

A much more likely explanation is the simplest one: In a weak recovery, employers remain wary of adding new full-time workers.

As noted here many times, excessive economic caution is self-perpetuating. For the recovery to gain real momentum, more employers must act as if they believe in it.

7/26/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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