The Part-Time Debate
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PAUL SOLMAN: How broad a trend is contingent and part-time work, and how big a problem is it? Well, for that, we start with Jeffrey Joseph, vice president of the U.S. Chamber of Commerce. How pervasive a trend, how broad a phenomenon is this? Let’s start with that.
JEFFREY JOSEPH, U.S. Chamber of Commerce: Well, I think there’s about 120 million people working and about 28 million who are working part-time; 24 million of them who want to work part-time. So about 80 percent of the people working part-time are doing it because they want to. There’s the other 20 percent who would love to have full-time employment, but they don’t fit in a job right now. You have the round peg, square hole syndrome. And with the move into the 21st century, where we’re going to have differing kinds of operating environments, away from the 19th century whistle-blowing, come in, punch the time clock at 8, and out at 5, into a globalized world, where business has need for people on an around-the-clock basis, there will be more and more opportunities for part-timers because there will be more windows of opportunity.
PAUL SOLMAN: All right. Well, Eileen Appelbaum has looked at this trend for the Economic Policy Institute here in Washington. And thanks for joining us. Not a big problem?
EILEEN APPELBAUM, Economic Policy Institute: Well, you know, we have just concluded a study looking at data collected by the Department of Labor on this. And we have a really good snapshot for the first time of the contingent work force and of how large it is. And what we find is that about a third of women and about a quarter of men–30 percent overall–are in what are called non-standard work arrangements, of which part-time work is one example. But there are also temporary workers, on-call workers, day laborers, people who work for contract companies, independent contractors, self-employed workers. This makes up a very large number of people–about 34 or 35 million people in this country–who do not have regular full-time jobs. The issue, I think, is really one of–what causes there to be a problem is the question of pay for these jobs. And we saw in your clip at the beginning that small slice of the contingent or non-standard work force that does manage to get good wages, as well as the flexible hours–computer programmers, high-powered consultants–those are the people for whom this works.
I think most people are aware of the fact that workers in part-time jobs are paid less than workers in full-time jobs. But I think that one of the most surprising things that we found when we studied this phenomenon was what is happening to self-employed workers. Women, you know, are often told that a way around the glass ceiling is to start your own business–especially college-educated women. And we discovered when we did the study that college-educated women, who are self-employed, have a penalty in terms of hourly pay of 35 percent, compared to college-educated women in regular, full-time jobs. This is true even if you look at managers and professionals. If you take a look at self-employed managers and professionals, they have a penalty, a pay penalty, of 20 percent. So it’s a very broad phenomena and a very important one.
PAUL SOLMAN: All right. Well, let’s join John Tschohl now, has his own company in Bloomington, Minnesota. He provides customer training service or service training, I’m sorry. And the company, I guess, uses contingent workers almost exclusively, is that right, Mr. Shoale, so is what she just said characteristic of your workers?
JOHN TSCHOHL, Service Quality Institute: I really disagree with that. We use a variety of people. We happen to pay the people that are independent substantially more per hour. I don’t think we could hire them if we had to fire them full-time; they wouldn’t accept the work because they like that freedom. They like that flexibility.
PAUL SOLMAN: Who are they? These are consultants? These are highly-trained professionals?
JOHN TSCHOHL: We use high professionals. Our person that manages our production for our company works out of her house. She is a 10 on a 10-point scale. She is a classy lady. We have people doing our software system that are all independent. These people would never work for us on a full-time basis. We couldn’t afford to have them. We pay them a lot more money. So I tend to think the marketplace is moving toward more of the independent contractor, toward the self-employed, tremendous opportunity for these people.
PAUL SOLMAN: Briefly, Mrs. Applebaum, is he just a unique case here?
EILEEN APPELBAUM: Yes. I would say that he represents a very small part of the employers who make use of independent contractors. The one category is professional men, who are independent contractors. They do—are self-employed–they do make out quite well. But most other categories of non-standard workers, including self-employed women, by and large, pay a large pay penalty. And, in addition, we know that most of them do not have benefits. Only one in ten of the non-standard workers have health care benefits through an employer or have pension benefits through an employer. I think this is an important issue.
PAUL SOLMAN: All right. Well, we’re finally joined by William Wolman in New York. He’s been in business journalism for decades, is chief economist for Business Week Magazine. And Mr. Wolman, you recently co-wrote a book called the Judas Economy, which touches on these issues. Give us the overview from your point of view.
WILLIAM WOLMAN, Business Week: Well, from my point of view, it’s relatively simple. At the high end of highly skilled workers being an independent worker is working quite well. For most independent workers who are essentially in retailing or in food service or something like that, wages are far lower than they are for full-time workers. One thing that amazed me, Paul, was the degree of support for the Teamsters Union against United Parcel Service, and all that the polls–
PAUL SOLMAN: And, in fact, that’s why we’re doing this tonight.
WILLIAM WOLMAN: I know it. I just want to make the point: The polls showed, you know, that there was maybe over 50 percent–certainly a USA Today poll–of support for the workers, as opposed to the company. That was very surprising to lots of people, including me. And to me it indicates there is sort underneath everything a disquiet and a discomfort in the American public with the situation of part-time workers and people saying, gee, you know, maybe there’s something wrong here.
PAUL SOLMAN: Mr. Joseph, what’s the response to this? I mean, after all, people–two to one is actually the number, Mr. Wolman, of people supporting the Teamsters where people thought the Teamsters were something that, you know, nobody supported.
JEFFREY JOSEPH: Let’s look at where we are. We’ve been going through rapid change in our economy. We’ve been going through the kind of change that’s different than people who are now at work group up in. It’s a different environment than they saw their parents go to work in. Most job creation today comes from smaller businesses. The big companies aren’t producing the jobs. And by the nature of smaller companies creating the jobs, they don’t have the economic platform that allows them to provide the same kind of benefits big companies do. They don’t have the same tax preferences that big companies do. So, automatically, the nature of the companies creating the jobs can’t even provide the same level of benefits. But then, as you contrast the–as you bring in other factors–globalization and telecommunications connectivity you have–you’re just breeding the opportunity for people to come in and out of the work place, come in and out of the market place at will. And so people who have the right skills can find whatever niche they want in this kind of economy. They can find a full-time job, or they can find the part-time job if they have the right skills.
PAUL SOLMAN: Yes. But that’s a big “if,” isn’t it?
EILEEN APPELBAUM: We looked specifically at managers and professionals. And we discovered, for example, that over 50 percent of managers and professionals who are in temporary jobs want full-time, regular employment. We did not find that workers who are managers and professionals, who are in these situations, with the exception of computer specialists and the very high-powered consultants, with that exception, we did not find that their wages were equal. We found that they were paid lower wages compared to other college-educated women, compared to other managers and professionals. We found that they did not have benefits, and we found that they were–had high anxiety about how long their job would last.
WILLIAM WOLMAN: I–that’s right–
PAUL SOLMAN: Mr. Wolman, just for a second. I’d like to let Mr. Tschohl in. Mr. Tschohl, your workers are not anxious, none of them, like that woman we saw from Power TV?
JOHN TSCHOHL: I happen to think that, you know, first of all, 95 percent of our people–and I’m talking about our women–they’re not men–and we’re paying them $600 a day. We’re paying them $75 an hour, $35 an hour. They get a lot more money than employees presently on board. I think that Eileen is wrong and that Jeff is more on target and that the marketplace has changed. People want flexibility. They want freedom. There’s a lot of women that want to work at home. They have small children. They have–the daycare is incredibly expensive; they can work any hour of the day they want. They can–the marketplace has shifted. And today there’s a lot of people that want that flexibility. We’ve got to encourage it, and we’ve got to support it. Women owning businesses today have more employees in the Fortune 500 companies.
PAUL SOLMAN: Mr. Wolman, you were trying to say something there–
WILLIAM WOLMAN: Well, I’d like to make the point that we should be very careful–we should be very careful about having a delusion of adequacy about what goes on in the United States as compared to other countries. In the course of doing the Judas Economy, I visited Bangalore in India, which is a software center. It just seems–it’s still very tiny by world standards, but it’s growing incredibly fast and produces cheaply. It just seems to me that those people at the top of the income scale in the computer business, who are confident right now that, you know–I can work independently, nothing bad can happen to me–are going to have to watch what happens through–as companies with the computer and with telecommunications can hire contingency workers abroad just as easy as they can at home, given the delivery systems that are being evolved in this area.
So it seems to me the world may be changing–and it’s changed up to this point where, you know, in the high ends–contingency workers are doing pretty well–but it’s not stopped changing, it seems to me, and those workers at the top end will be threatened over the next decade, just as surely as the manufacturing worker was threatened when manufacturing became globalized. So I wouldn’t get too excited about what’s happening right now, but we need to worry about the future. And to repeat, the support for the Teamsters against UPS is a sign of anxiety about the sustainability and the worthwhileness of part-time work.
PAUL SOLMAN: Mr. Joseph, how do you explain the support for the Teamsters?
JEFFREY JOSEPH: Well, I agree with Mr. Wolman, but let’s remember, the reason there were part-time workers in a two-tier contract system with the Teamsters was because competition in the 80′s forced them and forced the union to agree to a second class of worker who would do in bits and pieces the same kind of work for a reduced salary, although perhaps pretty much the same benefits. Competition in the broadest sense is going to determine who’s going to win and lose in the market place between big and small, between domestic and international. UPS was under competition–competitive pressures in the 80′s. The unions knew that their salary system could not be extended to new workers without sinking the whole company. So, I mean, you know, you had this in a lot of industries. Whether it’s India for software producers, or whatever the next fad is, anyone who is not prepared for a competitive work environment is not going to succeed, be it an employer or an employee. And every worker who gets the right kind of training for the right jobs that are available will succeed.
PAUL SOLMAN: Do you think that competition can go too far, I mean, will make people simply too anxious, too uncertain?
JEFFREY JOSEPH: No. You cannot hold back progress. Competition means that you’re always going to have to improve yourself. Continuous improvement is where we have to go as a nation. Life-long learning is going to be the key to success. Young people are being told today when they go to college, prepare yourself to have five, six, or seven careers in your lifetime. And that’s just the way it’s going to be.
PAUL SOLMAN: Mrs. Applebaum for a second, and then Mr. Wolman.
EILEEN APPELBAUM: Yes. I would like to respond to a couple of these remarks. We are told that companies want to have continuous learning and so on. But I find that the ability to pay workers who are not in regular full-time positions less, and despite the fact that we have one employer here who is not doing that, I’m not saying every employer does that, but many do, because we know what the numbers show–that overwhelmingly, people in these jobs earn less and don’t have benefits.
The ability to pay people less because they’re hired on a part-time basis, rather than a full-time basis, provides businesses with what economists call perverse incentives. I personally have no objection to a company hiring a part-time or a temporary worker when they have a business reason to do so. I think that’s perfectly legitimate. And there are many people who want flexibility in their lives. Many of the workers, as has been pointed out here, are women with families, with children, and they’re working to help make ends meet for their families.
PAUL SOLMAN: But the perverse part is?
EILEEN APPELBAUM: But the perverse part is that you pay these workers less simply because they’re working fewer hours, simply on that basis, and this then sets up a perverse incentive for companies to hire part-time workers or temporary workers when there’s no business reason to do so; to take what would have been regular full-time jobs at full-time wages and convert them–because you can pay less–into part-time or temporary or contract or whatever it is–other kinds of arrangements.
I would like to just point out that the ability to pay people less on an hourly basis based on their hours of work is the last legal form of pay discrimination that we have in this country. It’s legal in this country to have a full-time labor force that’s predominantly male and a part-time labor force that’s predominantly female. And you could not pay the women less than the men because they’re women, but it is perfectly legal to pay them less because they are part-time workers and not full-time workers.
PAUL SOLMAN: Well, we’ve got about a million issues still to cover, and we have no time left in which to do them. And so, thank you all very much. I’m sure we’ll continue with this one for years to come perhaps.