Slack.
It’s why the Federal Reserve didn’t raise interest rates in 2014 — and isn’t expected to until well into 2015. It’s why most wages aren’t going up. It explains why some people can only find a part-time job – and it may also be why Paula Gibbs has several of them.
“I love what I do – I love helping the elderly,” said Gibbs, 53, a nursing assistant who lives in Rex. She makes about $9 an hour and cobbles together a fistful of jobs to pay her bills. “But would I want full-time? Of course.”
Slack may not be a textbook economic term, but it is a one-word description for a labor market that has more job-seekers than jobs, forcing many to settle for part-time work or juggle more than one job to make ends meet.
Gibbs, for example, doesn’t get enough work from agencies, so she tries to find clients herself. She also cleans houses and provides chauffeuring for people who need a lift.
“You pick up whatever you can to make ends meet. None of them are steady work.”
If slack is a factor for working Atlantans, it’s also a factor in monetary policy as made by the nation’s central bank.
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said in a recent talk that officials see too much slack in the labor market, despite improved hiring and a gradually falling unemployment rate.
Georgia’s jobless rate started the year at 7.3 percent, then climbed to 8.1 percent during the summer to become the nation’s highest for a time. It has since subsided to 7.2 percent, but remains one of the highest and well above the national rate of 5.8 percent.
Borrowing needed
When there’s slack, the economy needs low interest rates to encourage companies to invest and consumers to borrow.
Signs of improvement can build pressure on the Fed to raise short-term rates — which have been near zero since 2008 — in order to prevent inflation.
But despite some signs, the labor market needs to heal more, Lockhart said.
When the labor market is tight – the opposite of slack — wages start to climb. But employers haven’t had to give raises because there is “a large supply of people willing to take part-time jobs when they want full-time jobs,” Lockhart said.
About 6.9 million Americans work part-time because they cannot find full-time work, according to the Bureau of Labor Statistics.
The Fed shouldn’t raise rates until at least halfway through next year, Lockhart said. “We believe there is more slack in the labor market than indicated simply by the share of the labor force that is currently out of work.”
John Becker can testify to that.
Becker, 56, who lives in Virginia-Highland, left full-time work in sales for a tech company in 2006 to pursue his dream to be a writer, editor and photographer. He has since managed only erratic and unpredictable free-lance work.
With expenses steadily eating up his savings, he started looking in late summer for a regular paycheck.
“I see myself as a communications manager for a small company or a non-profit,” he said.
What he found was a job as a server in a new tavern. And they needed him only 30 hours a week – not enough, he said. “I love what I am doing and I love the people I work with. But you just can’t make any money.”
Now he is looking for another restaurant job and a second part-time paycheck.
The need to stitching together part-time jobs – for people who’d rather have one full-time position – is common. About 2.1 million Americans work more than one part-time job, according to the BLS.
Frustrating search
Some people can’t get work at all.
Terry Rivers, 24, was with the military policy in the Air Force when he was wounded in Afghanistan.
Not long after leaving the service, he was hired by a contractor doing security on a military base. Government budget cuts eliminated his job after eight months and the job search since then has been frustrating.
“In the past two years, I’ve applied for 50 or 60 jobs,” he said. “At first, I applied for jobs in the security field. But then I got to the point that I would take anything.”
Rivers lives in a one-bedroom apartment in Macon, getting by on government benefits and some work doing video production while taking college courses. He’s transferring to a school in Atlanta.
“I’ve applied to places like Walmart and Lowes,” he said. “They said they had someone more qualified or they weren’t interested.”
Some people blame the proliferation of part-time jobs on the Affordable Care Act, which requires companies of a certain size to offer health insurance once an employee hits 30 hours a week.
That doesn’t explain the challenge facing Rivers.
The surge in part-time work started before the ACA was passed and doesn’t seem limited to people with hours on the cusp of the law. It looks as if a major reason is simply the weakness in hiring, said labor economist Barry Hirsch of the Andrew Young School at Georgia State University.
“It suggests that demand is not as strong as we’d like it to be,” he said. “If jobs were plentiful, we’d see fewer people working part-time. We’d see more full-time jobs and higher wages.”
