Why MN Has So Many Non-Full-Time Jobs — And Why That’s Good (and Bad) for the Economy
New state data show that Minnesota employers have plenty of job vacancies, but more than half of them are part-time, temporary and seasonal — which might explain one reason companies are having a hard time filling them.
“Those jobs tend to have unpredictable hours and may get harder for employees to budget and spend time with their family and friends,” said Frank Manzo, the policy director at the St. Paul-based Midwest Economic Policy Institute. “They also kind of pay lower wages and lack employer-provided benefits.”
The Minnesota Department of Employment and Economic Development (DEED) put the number of job vacancies in this year’s second quarter at nearly 123,000, an increase of 26 percent from the same period a year ago.
Of those, 44 percent were part-time, which the government defines as positions that offer less than 35 hours per week, and 15 percent were temporary or seasonal — bringing the total number of non-full-time jobs to nearly 60 percent.
So is it good or bad for the economy to have too many non-full-time jobs? The answer is much in the eyes of the beholder, economists say.
The good side
People choose part-time work for many reasons, of course. For some, it can offer the freedom to balance employment and family by giving them flexible hours to work and take care of their children or elderly parents. For others, it can provide them with an opportunity to earn a second source of income.
For companies, creating part-time work has several advantages: It increases flexibility and allows companies to step up at peak hours when customers are increasingly wanting their goods and services on demand.
Part-time jobs also allow employers to test out some of their new employees and train them on limited bases before they commit to hiring them full-time — while cutting the cost of payrolls since companies typically don’t provide part-time workers with benefits, including overtime compensation, health-insurance coverage, paid family and sick leave and retirement plans.
“By not providing those benefits to workers,” Manzo said, “they’re saving payroll costs. So that’s the positive side.”
Jonathan Weinhagen, president and CEO of the Minneapolis Regional Chamber of Commerce, agreed with that sentiment. He said that part-time jobs give important employment opportunities for the disabled and older people, who might not be able to hold full-time positions.
“One of the pressures that our market has felt … is this labor shortage,” Weinhagen said. “We have unprecedentedly low unemployment, coupled with a shortage of workers that’s causing employers to get creative with how they offer opportunities — and part-time is certainly one of those mechanisms.”
For people who are just joining the workforce or those transitioning into a new profession, Weinhagen said, part-time positions can also be a good entry point into their careers.
Aside from part-time jobs, temporary and seasonal gigs also make up a big portion of the current job vacancies. Economists say such jobs are meant to meet increased demand for workers during the holiday season. “Our retailers and employers are hiring based on those projections, which will require more workers in November and December,” Weinhagen said. “To that end, part-time opportunities are really good because they’re indicators of a robust retail economy.”
The bad side
There are also economic consequences to having too many non-full-time jobs. Over the last 15 years, Manzo said, the number of part-time workers nationwide has increased by 9 percent, forcing many American workers who want full-time jobs to become part-timers.
“That’s a problem,” Manzo said, “and that’s why I think a lot of these jobs are unfilled.”
He added that an increase in part-time jobs is also bad for the economy because people with those kind of jobs are “much more likely” to live in poverty and receive government assistance.
Too many part-time hours with no benefits can also discourage individuals from trying to re-enter the labor market, Manzo noted. “One of the reasons why these jobs are going unfilled is that workers tend not to apply for part-time positions,” he said. “The positions have various scheduling hours each week and offer lower pay and don’t provide benefit packages.”
In Minnesota, according to a 2015 report by the Minnesota Budget Project, about one in every six people with part-time jobs need to work full time to support their families — a problem that’s more pronounced among communities of color.
“African-American part-time workers are twice as likely to want full-time work as the statewide average,” Clark Biegler, a policy analyst, states in the report. “Workers of color are also more likely to be underemployed, which is when a worker needs full-time employment or is not fully using their job skills.”
To improve existing part-time positions, Manzo said, there should be state and local policies that protect workers, create secure scheduling provisions and expand employment insurance laws to include part-time workers.
“What we really need are quality jobs with good pay and good benefits,” he added. “Now is the time for employers in the state to really compete for labor on the basis of quality — raising wages, offering benefits to attract workers and training employees with skills that they need to move up the company ladder.”