Unemployment, the Uber Economy, and the Throes of Part-Time Labor

On a recent trip to the D.C. area, I needed a ride to the Baltimore airport. I dreaded calling a cab, since I knew the ride would be over $100 and the cab itself might make the 30-minute ride less than pleasant. So I took the occasion to hail an Uber car.

The car arrived at 6:10am, and I had a very pleasant ride to the airport in a recent model Volvo S60.

The driver assisted me with my bag, offered me bottled water, and drove directly to the airport without talking on his phone or blasting the radio. The trip only cost about $60.

It was an enjoyable early-mornrning drive. But what struck me the most about the ride was the driver himself. He appeared to be in his early 40s, was well-dressed, and obviously had (or had access to) a car that was less than three years old.

Why was he picking up Uber fares at 6am on a Saturday mornrning?

Welcome to the Uber economy, where people are cobbling together part-time jobs in an effort to replicate the full-time employment they wish they had.

Right now in New York, Uber is battling a proposal to cut the number of cars on the road by limiting their business in the city.

Uber drivers are outraged. While the turnrnout to Uber’s staged protest was small, several Uber employees showed up with signs saying “Don’t destroy Brooklyn jobs” or “My car. My business. My family.”

For them, it’s a matter of paying the bills. And it’s a matter of finding work wherever they can get it in an economy lacking full-time jobs.

It matches the sentiment of the millions of people surveyed by the Bureau of Labor Statistics (BLS).

Each month the Bureau issues the Employment Situation report, which includes the much-discussed unemployment rate and net change in non-farm payroll jobs.

Often lost in the noise is a host of other data points that are very useful. One of those is Part-Time Employment for Economic Reasons, which counts people who would like to be working full-time, but have taken part-time work instead. This is either because their employer cut back their hours, or part-time work’s all they could find.

Keep in mind that, as far as the broad measure of unemployment is concernrned, these people have jobs even if they work just a few hours a week. But just because you have a job doesn’t mean you can pay the bills.

The number of people in this category more than doubled from December 2007 to September 2010, from 4.618 million to 9.246 million, then fell to 6.652 million as of last month. That’s a great improvement from more than nine million, but it’s still almost 50% higher than where we stood at the end of 2007.

When the Federal Reserve tried to get to the bottom of this, they concluded that it’s largely a matter of the business cycle. From their view, higher wages drive up part-time positions, not full-time ones, as employers fight to keep costs down. That’s why this number remains high even as the overall unemployment rate drops.

But they also determined long-term structural issues that are making matters worse: That there are more boomers than young adults under 25 looking for work, and the simple fact that the area where the economy’s been adding new workers are in leisure and hospitality – which are, traditionally, part-time gigs!

This all comes back to the Uber driver. Assuming from his age that he wants to work full-time, he could have a regular job and simply be supplementing his income. Or, he could be unemployed – by his terms, not the BLS’ – and using this as a way to bring in a little cash until he finds a new position.

He’s a tiny sliver of a large workforce ready for full-time employment and/or better pay. Problem is, there are almost too many applicants for employers to choose from, even as jobs become available. Which keeps a lid on what companies must pay to attract qualified workers.

This might be good for companies, but it’s a drag on the broad economy. With less income, consumers can’t spend as much as they otherwise might. The economy remains stagnant.

Before our economy can truly recover from the financial crisis, we’ll have to create more full-time jobs to soak up the workers who would love to be on the clock for 40 hours per week. But for now, they have to spend their days in hospitality, leisure, or the driver’s seat of an Uber car.

Rodney Johnson


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