Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, September 19, 1993 TAG: 9309160008
SECTION: BUSINESS PAGE: C-3 EDITION: METRO
SOURCE: By BILL HENDRICK
DATELINE: STONE MOUNTAIN, GA. LENGTH: Long
The 30-year-old has a "very good" part-time job unloading boxes for Macy's department stores. But what he wants is a full-time job.
Since moving from Queens, N.Y., four years ago, Cammorto has tried to find a full-time job because working 20 to 32 hours a week doesn't put enough bread on the table for his family of four. And he gets no sick leave or other paid days off.
"I have no health insurance," he said. "And I can't afford it."
Although the recession officially ended 2 1/2 years ago, companies are still laying people off by the tens of thousands and hiring part-timers to fill jobs normally reserved for full-time employees.
The rising number of part-timers is one reason the nation's unemployment rate has dipped from a high of 7.7 percent in June 1992 to 6.7 percent, the U.S. Labor Department reported recently. Part-timers aren't counted as unemployed even though millions work fewer than 20 hours a week.
"It's scary, to the extent people would rather have full-time jobs," said economist Donald Ratajczak of Georgia State University. "The employer is saying, `I have some business now, but I don't know how long it's going to last.' Also, `I don't want to burden myself with long-term benefits by hiring people I may or may not need.' "
In short, companies aren't hiring as many full-time workers because they're afraid the economy isn't going to get much better soon - and may get worse. By adding part-timers, companies not only skirt the possibility of hiring people only to have to lay them off later, but they save on the soaring costs of benefits, notably health insurance.
Few companies are willing to discuss the trend or even acknowledge it, fearing it could be detrimental to employee morale, said economist Cynthia Latta of the prominent economic consulting firm DRI/McGraw Hill Inc.
"There is ample supply in the labor market, so companies can get away with hiring part-time people," Latta said. "We expect these involuntary part-time numbers to grow for a while longer because we don't see the labor market firming up for a couple of years."
One reason for the trend, she said, is that companies don't know how much President Clinton's health reform plan will cost.
Although Clinton has said all companies will be required to provide costly health insurance for workers, details haven't been announced, and no one can guess what shape the reform will take by the time it winds its way through Congress, a process that could take years, Latta said.
So most companies aren't taking chances.
Fixed costs, such as employees, hurt profits when business is weak, so there is no end in sight to the "downsizing" trend that has bloodied the work force in the past few years but has saved companies billions of dollars, Zandi said.
Gerald Celente, director of the Trends Research Institute in Rhinebeck, N.Y., said weak economic conditions since 1989 have created new "classes" in the work force: "permanent part-timers" such as Cammorto, and millions of middle-aged, formerly white-collar managers who have lost their jobs and are having trouble finding new ones. Celente said there are other incentives for companies to hire part-timers: "The cost of putting on full-timers is quite heavy; there are a lot of government regulations regarding terminating a person; executives are afraid they'll be sued; you don't have to offer benefits."
But he thinks there is a downside to downsizing, which he calls "dumbsizing."
"It's a two-sided coin. Employees no longer want to give themselves to their companies," Celente said, "because there is no bond of loyalty anymore. Part-timers have no reason to feel loyal, and full-timers feel threatened when part-timers are hired to fill jobs that in normal times would be filled by full-timers."
It's not just the weak economy and the possibility that health reform will cost businesses more that is making executives jittery, Celente said. He pointed out that:
If the North American Free Trade Agreement becomes law, "a lot more jobs are going to be exported."
Many firms are considering doing away with all long-term fringe benefits.
Companies are doing more "outsourcing," shifting work that used to be done by full-time employees to either temporary workers or outside contractors. "This is a long-term trend we'll see into the next century."
The Labor Department said the number of involuntary part-timers nationwide rose by 209,000 last month. The number of involuntary part-timers was 5 million when the recession began in 1990 and has grown by 1.5 million since.
A recent survey by Wyatt Co., a consulting firm, said 29 percent of companies it polled nationally plan to lay off workers this year. It also said that one in nine companies plans to increase the number of hours that employees work instead of hiring more full-timers. And more than 25 percent of companies surveyed said they plan to use more part-timers and temporaries in the next year.
That's not what people such as Cammorto want to hear.
"If I had a major accident or illness," he said, "I would be in big trouble."
Although he likes his Macy's job, which pays "pretty well," he wants a full-time position.
"I'm not picky," he said. "I can do a lot of things."
by CNB