Tomorrow’s labour force estimates from the ABS (for the month of September) are likely to show yet another record high for the proportion of people working part-time. As of August, 31.7% of all employed people worked part-time (that is, they usually worked less than 35 hours per week in their current job). This amounted to 3.8 million part-time workers out of a total workforce of 11.9 million. More detailed data about work hours indicates that the most common work pattern for part-time workers is equivalent to 3 days of work per week, on average.
There are a number of interesting trends going on underneath this headline part-time work rate:
Part-time work in Australia has been rising steadily since at least the 1980s, but the share of part-time work has accelerated since 2013. This has come on top of a surge in part-time work in 2008-09, which was never reversed (see chart 1). 2016 has seen an especially strong period of part-time growth, with 105,000 part-time jobs added in 2016 to August, but 21,000 full-time jobs lost. This pushed the part-time rate from 31.1% at the beginning of 2016 to 31.7% in August (trend data).
Some of this change from full-time to part-time is due to job creation and destruction in different parts of the economy and some of it is due to work hours in existing jobs being reduced. In aggregate, this can look as though the same amount of work is being ‘shared’ among more people. This is evident in the fact that even though the number of people working grew by 1.6% in the year to August 2016, the aggregate hours that we worked grew by only 0.5% (trend data).
The big question is, why is this happening?
On the demand side (that is, business and industry preferences), changes in the industry composition of our workforce has had a big influence on the incidence of part-time work. In particular, the rise of healthcare and welfare services to our single largest employing industry had helped to push up the rate of part-time work. Health and welfare employment grew by 236,000 over the five years to August 2011, accounting for 30% of all jobs growth over that period. It now employs 1.5 million workers, or 13% of the workforce. 46% of healthcare workers were part-time in August, a rate not much lower than in retail trade (50% part-time) and hospitality (59% part-time).
At the same time, 77,000 jobs have been lost from the industrial sectors of mining, manufacturing and utilities, which traditionally have very low rates of part-time work: 3.5% in mining, 16% in manufacturing and 7% in utilities as of August 2016. This structural shift from industrial to services jobs is clearly having an effect.
In addition, the part-time rate is rising within each industry, with an acceleration more recently. In healthcare, the part-time rate rose to 46% in August 2016, from 43% five years ago and 43% twenty years ago. Even within the more industrial sectors, the share of part-time work is slowly creeping up. In manufacturing for example, a loss of 62,000 full-time jobs over the five years to August 2016 and the addition of 4,300 part-time jobs saw the part-time work rate within manufacturing creep up to 16% in 2016 from 13% five years ago and 9% twenty years ago.
On the supply side (that is, worker and jobseeker preferences), things get more interesting but also a little more complex. Firstly, there is a clear gender divide in part-time work, with 47% of women working part-time versus 19% of men. Part-time work rates have risen consistently for both men and women since at least 1980 (see chart 2). Some of this is related to the ageing population, since older workers often prefer to work part-time towards the end of their careers. It is also related (more positively!) to rising education participation for 15 to 24 year olds, who are therefore more likely to be working part-time (to fit around their studies) than in previous generations.
There are also far more women in the workforce in 2016 than in the past, so the stronger preference among women for part-time work is helping to push up the total rate at an accelerated pace. As of August 2016, a record high 46.4% of the workforce is female (trend data). This is being driven by rising female workforce participation rates but falling participation rates for men (see chart 3).
This stark difference in participation trends is not related to the ageing of the population, because presumably men and women are ageing at much the same rate. This might be related to men’s and women’s perceptions about employment opportunities, since the ‘growth’ industries of healthcare and education are predominantly female (78% of healthcare workers are women), while the declining industrial sectors are predominantly male (73% of manufacturing workers are male).
How do we know about workers’ preferences for part-time work?
Two pieces of data confirm that a rising proportion of workers and jobseekers want to work part-time. Among people who work part-time, the under-employment data tell us that as of August 2016, around 1 million of the 3.8 million part-time workers (26%) said they were under-employed. That is, they wanted to work more hours than they were currently doing. Conversely, that means the majority of part-time workers (around three-quarters) are not available for more work hours or do not want more hours. While more women are working part-time than men, the data suggest that fewer of them are under-employed, with around 23% of part-time female workers reporting under-employment versus a third of part-time male workers. These proportions have remained remarkably stable in recent years, with movements in the underemployment ratios generally reflecting movements in the proportion of workers who are employed part-time.
Among unemployed jobseekers, around 29% were seeking part-time work only in August 2016. This is surprisingly close to the rate of part-time work that is being undertaken (31.7%) and has risen over much the same period, albeit somewhat more erratically (see chart 4). The rate of jobseekers seeking part-time work only peaked at 33% in 2007, immediately before the slump of the GFC.
This jobseeker data suggests there is a strong element of worker preference in the rise of part-time work. Again, there is a strong gender element to the story, with 38% of female jobseekers wanting part-time work only, versus 22% of male jobseekers. Even for men however, this figure is not small.
And lastly, part-time work is not the same as casual work, since ‘part-time’ relates only to the number of hours that a person works, while ‘casual’ relates to the nature of a person’s work contract. These two categories overlap, but probably not by as much as is commonly assumed. Among part-time workers in August, 38% were permanent employees, 44% were casual employees and 17% were self-employed. This compares to the employment status of all workers in August, of whom 62% were permanent employees, 20% of whom were casual employees and 17% of whom were self-employed. This indicates that part-time workers are just as likely to be self-employed as other workers, but if they are employees, they are more likely to be casual instead of permanent.
Unlike the part-time work rate (which has been rising consistently over a very long period) however, the rate of casual work in Australia has remained roughly the same at least since 1998, at around 20% of the total workforce (see chart 5). This movement in the part-time work rate but not in the casual work rate suggests the two categories are not being affected by the same influences. That is, the influences that are contributing to rising part-time work are not leading to a ‘casualisation’ of the workforce.
Is more of your workforce part-time? Are more employees asking to work part-time? Is this affecting your operations, costs or productivity? Add your comments below and start a conversation.