Multiple Jobholders: Another Sign of a Job Market in Crisis?

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Source: http://www.flickr.com/photos/wjlonien/

How many times since the start of the Great Recession have you heard a story like this one, from USA Today?

“Heather Rolley’s primary occupation is motherhood, but it doesn’t pay the bills. So most days, after she takes her daughter and two sons to school, the 36-year-old divorcee heads to work. Some days it’s at the Polo Ralph Lauren store at an outlet mall, where she makes $8.50 an hour as a part-time sales associate. Other days, she focuses on her home-based Mary Kay beauty products business, making telephone calls, checking orders and meeting clients.

Many days, she does both. ‘It helps me make ends meet, but it’s barely enough,’ Rolley said of her dual income, which is supplemented by child support. ‘It is very difficult. Holding two part-time jobs, plus being a mom, is a juggling act. It’s tough, it really is.’”

Anecdotes like this grab our attention, but just how common are they? After taking a look at the data on part-time workers earlier this year, I thought it would be worth digging into the story of multiple jobholders.

How many people hold multiple jobs?

The first thing we learn is that although multiple jobholders are not rare, they are not as common as the impression you might get from accounts in the media. The chart on the next page shows the basic data. Multiple jobholders account for about 4.5 percent of the labor force. These include 2.4 percent who hold a part-time job in addition to a full-time job — a  pattern we can call FT/PT.

Those who piece together two or more part-time jobs — Heather Rolley’s category, or PT/PT — make up about 1.2 percent of the labor force. (People like Rolley, whose primary or secondary job is self-employment, count as multiple jobholders, but people whose only work consists of two or more forms of self-employment do not.) Smaller numbers of workers, not shown in the chart, hold two full-time jobs or hold multiple jobs that are unclassified because they vary in hours from week to week.

P140307-21

The chart shows that multiple jobholding has decreased a bit since the start of the recession, but seasonal variation and the format of the chart make it hard to track recent trends in detail. The next chart does two things to bring those trends out more sharply. First, it removes the seasonal variation by plotting 12-month moving averages. Second, it changes the vertical scale to an index with each indicator’s average value for 2007 equal to 100.

P140307-22

This version of the chart highlights the divergent trends in different categories of multiple jobholding. Early in the recession, the FT/PT pattern became less frequent, while PT/PT became more common. At that time, it would be easy to imagine that people were losing their full-time jobs and, in desperation, piecing together two that were part time.

Interestingly, though, that pattern has not reversed as the economy has recovered. The FT/PT category bottomed out in May 2011 and since then has risen a bit, but the PT/PT pattern has continued to grow also. That is not what we would expect if the PT/PT workers were shifting back to FT/PT as the job market grew stronger. We need to think more about just what motivates multiple jobholders.

Why people hold multiple jobs

The next thing we learn when dig into the data is that not every multiple jobholder is a hardship case. The BLS does not report people’s reasons for holding multiple jobs on a monthly basis, but an occasional survey, taken in 2004, sheds some light on the question. At that time, 25.6 percent of those surveyed said they needed the job to meet regular expenses or pay off debt — the answer we would expect Heather Rolley to give.

Another 21.3 percent appeared motivated mainly by the value of the second job itself rather than the money it brought in. These included people who took a second job to gain experience, to build a business, or because they enjoyed the work. A third group, 38.1 percent of the total, simply said they wanted the extra income without saying why. Maybe they, too, needed the money desperately, or maybe they wanted to take a cruise or buy a fancier car. We don’t really know. The remaining 15 percent gave other unspecified reasons or no reason.

P140311-21

We can get further, indirect insight into the motivations of multiple jobholders by looking at data on part-time workers. Multiple jobholders and part-time workers are overlapping categories. Very few multiple jobholders have two full-time jobs; on average, they work about thirteen hours per week at their secondary jobs, so they are active in the part-time segment of the market. The degree of overlap is ambiguous, however.

The BLS data do not tell us how many people with two part-time jobs work more than a total of thirty-four or more hours per week, which would classify them as full time workers even though they do not have full time jobs. Similarly, data on part-time workers do not tell us how many have just one part-time job and how many more than one.

Still, whether we look at full-time workers with a secondary part-time job or at part-time workers, the data suggest that most people who hold part-time jobs do so voluntarily, rather than out of economic necessity. Our earlier pie chart showed that was true for multiple jobholders, and the next chart shows the same to be true for part-time workers. Hardship cases like Heather Rolley’s are real enough, but they certainly don’t dominate either among multiple jobholders or part-time workers.

P140115-1

What lies ahead?

As we look forward, both multiple jobholding and part-time work are likely to become more common and increasingly voluntary, for two reasons.

The first reason is an aging population. Workers older than 55 are less likely to have multiple jobs than people of prime working age, but of those who do, fewer report that they need the extra job to meet expenses or pay debt. Instead, they are more likely to have a second job because they enjoy the work. At the same time, older people are more likely to work part time. In the 55 and older age group, 22 percent work part time, compared with just 13 percent of those 25 to 54. What’s more, part-time work is voluntary for 84 percent of older workers, compared with 70 percent for prime-age workers.

The Affordable Care Act is another reason to expect changes. As has been widely noted, the ACA is likely to create an increase both in the demand for part-time jobs and in the supply of such jobs. The increased demand for part-time jobs will come from people who no longer have to hold an unwanted full-time job in order to get healthcare coverage. Able to purchase insurance on exchanges, sometimes at subsidized rates, some former full-time workers may cut back to a single part-time job or to a more flexible pattern of multiple part-time jobs.

At the same time, once employer mandates come into full force, it is possible that some employers will choose to offer more part-time and fewer full-time positions. If that happens, some people might shift involuntarily from a single full-time job to multiple part-time jobs, but also, more part-time positions would open up for those who prefer that kind of work. We will know more about the effect of employer mandates by next year.

The bottom line: Each of these in-depth indicators — part-time work, multiple jobholders, or whatever — provides another perspective on a labor market that is often drawn in terms of just a few big numbers, like new jobs or the unemployment rate. Sometimes the details make the labor market crisis look worse than we thought. The data on multiple jobholders, though, look less alarming as we examine them more closely.

Ed Dolan is Wall St. Cheat Sheet’s in-house economics professor. He is the author of an acclaimed series of textbooks called Introduction to Economics and Ed Dolan’s Econ Blog.

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