By DAVID LEONHARDT
The New York Times
Brenda Garcia, who works at a Chipotle in Queens, N.Y., has a problem that may sound surprising in today’s tight labor market. She is a part-time employee who wants more work, but the restaurant keeps assigning her less than 20 hours a week.
“It’s not enough for me,” Garcia told the New York Times’ Noam Scheiber. “They’re not giving me a stable job.”
Garcia is one of the millions of Americans who want an established, full-time work schedule and are struggling to find it, as Noam explains in a Times article. As a result, these part-timers struggle with not only low pay but also uncertain shifts that can change at the last minute, disrupting the rest of their lives. The workers can obviously quit, but they often find that the other jobs available to them have similar problems.
How could this be when the country is in the midst of a labor shortage in which employers are struggling to fill jobs? Because executives at many companies have decided that part-time work is too important to abandon just because the labor market is temporarily tight.
HOLDING DOWN LABOR COSTS
Part-time work allows companies to hold down labor costs in two crucial ways:
- First, companies can reduce their benefit costs because part-time workers often do not receive health care and retirement benefits.
- Second, companies can change staffing levels quickly, to meet demand on a given day or week, rather than having workers sit idle during slower periods.
“It’s very deeply embedded in employers’ business models,” Noam — who covers workers and the workplace from Chicago — told me. “They’re incredibly reluctant to give it up, even if it means enduring labor shortages and elevated turnover in the short and intermediate-term. Basically, they think it makes more economic sense to wait out the current shortages than to fundamentally change their labor model.”
DON’T WANT TO BE ‘STUCK’ WITH MORE EMPLOYEES
That may well be a rational decision for individual businesses. The shift toward flexible, part-time and often outsourced work is a major reason that corporate profits have risen in recent decades. After-tax corporate profits have accounted for more than seven percent of national income in recent years, up from an average of 5.6 percent from the 1950s through the 1970s, according to the Commerce Department.
If employers shift away from part-time work during a tight labor market like today’s, they worry they will be stuck with higher labor costs for years. “Employers will typically try everything else first — raising wages, offering bonuses and other financial incentives, giving part-timers more hours temporarily,” Noam explains. “All these measures are reversible, and presumably will be reversed once the labor shortages subside.”
CHANGING THE POWER DYNAMIC
Companies have been able to insist on so much part-time work largely because they have more negotiating power over workers than in the past. The corporate sector is more consolidated than it was decades ago, leaving the average employer with more resources and the average worker with fewer alternatives in any given industry.
Workers, for their part, are much less likely to belong to a union than in the past. And union members make more money than similar nonunion workers, as an extensive study of the U.S. economy by economists at Princeton and Columbia has found. Unions effectively shift some of a company’s revenue from profits to wages. Shrinking unions, in turn, have contributed to growing economic inequality.
One way that unions tend to lift wages is by putting pressure on companies to hire people full time — and threatening to strike if the companies refuse.
Last month, unionized workers at King Soopers, a supermarket chain mostly in the Denver area and owned by Kroger, went on strike. They made the growth of part-time work a central issue. In the strike’s settlement, Kroger agreed to contract language that will likely lead it to add 1,000 or more full-time jobs over the next three years. A majority of jobs at King Soopers are still part-time, but the settlement has changed the balance.
“Without a Labor union that could organize a strike and provide strike pay, it’s hard to see how most workers could pressure their employers to make a similar change,” Noam said.
GOVERNMENT POLICY
In the short term, a tight labor market will lift wages for many American workers. If it were to persist for years — which is unlikely — it might alter the balance of power between workers and employers. But the more plausible way that balance could change is through government policy.
The House passed the PRO (Protecting the Right to Organize) Act that would make it easier for workers to form unions, and President Biden supports it. Among other things, the bill would bar companies from requiring employees to attend anti-union meetings and would impose financial penalties on companies that fire workers for trying to organize a union.
The bill (is) stalled in the Senate, where Republicans oppose it. Democrats may try to pass some of the bill’s provisions along party lines in coming months.
THE BOTTOM LINE
The increasing inequality of the U.S. economy over the past half-century is unlikely to end because of a temporarily tight labor market. “Labor shortages may be a necessary condition for changing the nature of these jobs, but they’re generally not a sufficient condition,” Noam said.
(David Leonhardt is a senior writer for The New York Times. He writes “The Morning,” The Times’s flagship daily newsletter, and also writes for Sunday Review. Reprinted from the New York Times’ “The Morning” newsletter.)
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