NEW YORK (TheStreet) -- On Tuesday, the Labor Department is expected to report the economy added 185,000 jobs in September and unemployment was steady at 7.3%. Part-time positions dominate the jobs picture.
Since January, 848,000 additional Americans have reported working part time, while only 35,000 more say they obtained full-time positions. In significant measure, the part-time economy is driven by Obamacare health insurance mandates, which push down wages in industries such as retailing and restaurants and widen income inequality.
September data predate the government shutdown, and the closure won't have much of an impact on employment several months from now. About one half of one percent of employed workers was furloughed for about two weeks. After the Clinton-era shutdown, the economy recovered lost ground quickly and the shutdown had hardly any lasting effects on retail sales.
Government workers will receive and spend back pay, and many tourist dollars not spent at government-run museums and parks, for example, were spent in other places.Unfortunately, hardening business expectations for permanently slower growth and more burdensome regulations are changing labor market and social conditions. These days, most new growth is concentrated in the auto, housing and on-shore oil and gas sectors, while the rest of the economy languishes. New college graduates often work at unpaid internships, while taking part-time jobs at places such as Starbucks (SBUX) to meet minimal living expenses. They put off marriage and childbearing, which also drags on consumer spending and growth. Adding discouraged adults, who have quit looking for work altogether, and part-timers who want full-time employment, the unemployment rate is close to 14%. Second-quarter gross domestic product advanced 2.5%, but third-quarter estimates, also unaffected by the shutdown, are expected to show growth slowed to about 1.8%. Even with more full-time positions, the pace of jobs creation is well short of what is needed. About 360,000 additional jobs a month would lower unemployment to 6% over three years, but that would require GDP growth in the range of 4% to 5%. Stronger growth is possible. Four years into the Reagan recovery, after a deeper recession than President Obama inherited, GDP was advancing at a 5.1% annual pace, and jobs creation was robust.
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