bad-economy

Friday, July 5, 2013 – 10:00 a.m.

It didn’t take an Ivy League economist to see this coming down the road.

According to the U.S. Department of Labor, 195,000 jobs were created in June. But, the official unemployment rate (U-3), remained unchanged at 7.6%.

The serious problem? Job quality!

Tens of thousands of part-time jobs, about 75,000, were added in the food services and leisure industries. A side effect of the, now delayed, implementation of the Affordable Care Act, otherwise known as Obama Care. Large and mid-size companies continue to cut full-time workers back to 28-hours per week, in order to avoid paying for health benefits for those workers, while, at the same time, avoiding stiff penalties imposed by the government.

The more broad underemployment rate (U-6) tells the tale here.

The U-6 rate, which takes into account part-time workers seeking full-time work, and discouraged workers, climbed sharply in June, That rate increased from 13.8% to 14.3%.

A jump of 0.5% in one month.

There really isn’t more payroll dollars flowing into the economy. Just the same payroll dollars flowing to more workers, who, in-turn, earn less.

For example, someone who worked near or at full-time at let’s say Denny’s, now must work less hours at Denny’s and take up work at IHOP, just to make ends meet.

It’s all a numbers game, because the reports don’t really carve-out people in the two-jobs category when factoring the rate.

Is a part-time economy really a good thing? It’s highly doubtful.