Low-wage Employees Face Shrinking Workweeks

June 27, 2014

The Great Recession of 2008 and 2009 caused many employees to see their work hours reduced, as employers cut back on overtime and shifted to part-time employment. After the downturn, employees in most segments of the economy saw their work hours return to normal levels -- but this was not the case for low-wage workers, according to a report from Filip Jolevski and James Sherk of the Heritage Foundation.

Today, low-wage workers are working an average hour per week less than they did in 2007, losing approximately $500 a year.

  • Only in two industries -- educational services and information -- did the average workweek rise for workers in the bottom quintile (and the rise was statistically insignificant).
  • For 18 of 20 industries, the average workweek fell. The arts, entertainment and recreation industries saw the largest drop, with the average workweek cut by 10.1 percent.

Reduced work hours not only reduce the income of employees, but they reduce their odds of receiving raises and promotions that can command higher pay in the future. Full-time, minimum wage workers are 10 percentage points more likely to be promoted within a year than part-time minimum wage employees working between 10 and 19 hours, say Jolevski and Sherk.

Unfortunately, the trend towards part-time work is likely to continue, as Obamacare incentivizes employers to create part-time jobs. In fact, it will cost an average 18 percent more to employ a worker in the bottom quintile full time than to employ him part time.

Source: Filip Jolevski and James Sherk, "Shrinking Workweeks: A Sign of Unequal Recovery from the Great Recession," Heritage Foundation, June 12, 2014

 

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