Part-time America: National unemployment rate edges down to 7.3 in August

The Bureau of Labor Statistics announced today that the national unemployment rate edged down in August to 7.3 percent, down from 7.4 percent one month earlier. Non-farm payroll employment rose by 169,000. Unemployment decreased by 193,000, leaving the total number of unemployed Americans at 11.3 million in August. But there are many Americans suffering from...

The Bureau of Labor Statistics announced today that the national unemployment rate edged down in August to 7.3 percent, down from 7.4 percent one month earlier. Non-farm payroll employment rose by 169,000.

Unemployment decreased by 193,000, leaving the total number of unemployed Americans at 11.3 million in August.

But there are many Americans suffering from more than just unemployment.

The BLS tracks several unemployment figures, including the broadest measure of labor underutilization called the U6. The U6 includes not just the unemployed, but also people working part time while seeking full-time work, as well as unemployed people who haven’t looked for work in the past four months but have sought employment in the past year. The August U6 rate was 13.7 percent, down from 14 percent in July.

Under the U6 rate, more than 21.3 million Americans at the national level are unemployed or underemployed.

Non-farm payrolls grow slowly

August’s addition of 169,000 to payroll employment was slightly higher than the six month average of 160,000, but this is hardly encouraging.

The nation’s rate of payroll growth is significantly below the range needed to bring the U.S. employment back to pre-recession levels. According to the Brookings Institution, even if the nation began creating 195,000 payroll jobs per month, the nation would not return to pre-Great Recession employment levels until 2021.

Part-time employment up

Unfortunately, much of the limited growth in employment the nation has experienced over the past year has been because of growth in part-time and not full-time employment. Of the 848,000 jobs created so this year, 813,000 were part-time positions.

What’s worse, part-time employment is growing at the same time the labor force is shrinking.

Government data showed that only 63.2 percent of working-age Americans have a job or are looking for one, the lowest proportion since 1978.

According to Jim Pethokoukis, America is becoming a nation of part-time workers:

There are 28 million part-time workers in the US today vs. 25 million before the Great Recession. There are 116 million full-time workers in the US today vs. 122 million before the Great Recession. In other words, 19% of the (smaller) US workforce is part time vs. 17% before the Great Recession.

The nation is on the wrong path. A workforce of part-time employees cannot restore America to its pre-Great Recession prosperity.

The downturn will not be over for many Americans until the nation sees actual robust job growth driven by real market reforms.