(Daily Caller News Foundation) — An increasing number of Americans are taking up part-time work and even getting second jobs as worsening economic conditions such as high inflation have chipped away at their finances, according to experts who spoke to the Daily Caller News Foundation.
The median real weekly earnings for Americans are down 2.1% since the first quarter of the Biden administration, with data from August showing a spike in the unemployment rate and a job market that is beginning to cool, according to the Federal Reserve Bank of St. Louis. Due to wages failing to keep up with inflation and debt levels increasing, workers are increasingly taking part-time jobs and even second jobs in order to make ends meet, according to economists who spoke with the DCNF.
“Savings have become depleted and debt levels have grown as people tried to cope with falling real earnings,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “We’ve already seen many people get a second, or even a third, job, but now families are having to increase the number of people working too, in order to bring in extra income.”
Unemployment spiked to 3.8% in August, increasing from 3.5% in July, with the economy adding 187,000 nonfarm payroll jobs for the month. Combined with stubbornly high inflation eroding individual savings, more people are needing to work even as the job market continues to tighten, limiting access to jobs.
Real wages declined due partly to high inflation under Biden’s tenure as president, with the Consumer Price Index reaching a high of 9.1% in June 2022, slowly receding to 3.0% in June, and then ticking back up in July to 3.2%, far from the Federal Reserve’s 2% target.
Since June, the trend has emerged that employers are increasingly unable to provide full-time jobs, resulting in the creation of comparably more part-time jobs instead. Part-time jobs, defined as those 35 hours or less per week, grew by over 1 million in that time period, while full-time jobs dropped by 670,000.
“Increasing part-time workers can indicate several economic trends, but at present it’s likely a sign that consumers are under duress,” Peter Earle, an economist at the American Institute for Economic Research, told the DCNF. “And in the face of growing uncertainty about the prospects for growth in coming quarters, some business owners are probably hiring cautiously. That shows up, at times, as a shift from hiring full-time to hiring part-time workers.”
Employment Trends Index fell yet again in Aug after Jul was revised down; been trending down since Mar '22, same month household survey shows something breaking in labor market; conditions clearly softening w/ probably a few more months to go before we see monthly job losses… pic.twitter.com/XRh67JTKap
— EJ Antoni (@RealEJAntoni) September 6, 2023
Market conditions are also pushing more mothers into the workforce, with the share of women in the workforce whose youngest child is under five climbing higher than its pre-COVID-19 pandemic peak, to 70.4%, according to data from the Bureau of Labor Statistics (BLS) and compiled by The Hamilton Project.
“Mothers of small children seeking to increase their incomes additionally reflect higher prices and tightening credit,” Earle told the DCNF. “Single people and childless couples faced with higher costs of living tend to make personal budgeting changes, but parents are more likely to try to increase their incomes than tighten their belts when young kids are involved. Also, for those receiving child support, those amounts have not kept up with inflation either.”
The number of people not in the workforce fell by 525,000 in August, according to the BLS. This was mirrored by an increase of 514,000 more people considered unemployed in August, meaning many of those who pushed to join the workforce were unable to find a job.
“Increasingly poor economic conditions are drawing more people back into the labor market, which is what caused the recent rise in the unemployment rate,” Antoni told the DCNF. “If those who left the labor force all rejoined, and if those who never entered the labor force since the pandemic decided to do so, it would drive the unemployment rate over 6 percent — that provides some context as to how strong the labor market actually is.”
The number of part-time workers in the economy for economic reasons, meaning those who took part-time jobs but would rather have a full-time job, increased in August by 221,000 people, from 4,000,000 in July to 4,221,000 in August, according to the BLS.
Moreover, the total amount of debt that American households held reached a new high of $17.06 trillion in the second quarter of 2023, with over $1 trillion of that being credit card debt. The personal savings rate, an indicator of how much families are saving from disposable income, fell in July to 3.5% compared to 4.3% in June and 4.7% in May, according to the Bureau of Economic Analysis.
“Only about 1 in 10 of those who entered the labor market in August looking for full-time work were able to find it,” Antoni told the DCNF. “Before a recession, employers commonly shift from full-time to part-time jobs, then stop hiring altogether, and finally begin layoffs.”
The White House did not immediately respond to a request to comment from the DCNF.