Last week, our Atlanta Fed colleagues Lei Fang and Pedro Silos highlighted the wage growth trends of full-time and part-time workers in recent years. Using data from the U.S. Census Bureau's Survey of Income and Program Participation (SIPP), they showed relatively weak growth in hourly wages of part-time workers between 2011 and 2013. The Current Population Survey (CPS)—administered jointly by the Census Bureau and the U.S. Bureau of Labor Statistics—also contains wage information and has data through September 2014. We thought it would be interesting to see if the CPS data revealed a similar post-recession pattern, and if the more recent data show any sign of improvement. The short answer is that they do.
The following chart displays the median year-over-year growth in hourly earnings of wage and salary earners (shown as quarterly averages). The wage data are constructed using a similar methodology to that outlined in this paper by our San Francisco Fed colleagues Mary Daly and Bart Hobijn. The orange line is the median year-over-year growth in the hourly wages of all workers. The green line is the median wage growth of workers who worked full-time in both the current month and 12 months earlier (it is close to the orange line because most workers work full-time hours). The blue line is the median wage growth of workers who were part-time in both periods. Note that the median part-time wage growth is less precisely estimated (and thus demonstrates relatively more quarter-to-quarter variation) than its full-time counterpart because the CPS's sample size of wages for part-time workers is much smaller than for full-time workers.
Despite the noisy nature of the part-time wage data, it seems clear that the median wage growth of people usually working part-time fell dramatically behind that of full-time workers between 2011 and 2013. This finding is consistent with that of Fang and Silos. Interestingly, the other period when median part-time wage growth slipped behind was during the sluggish labor market recovery following the 2001 recession, albeit much less dramatically than the recent episode.
The SIPP data used by Fang and Silos ended in mid-2013. The more recent CPS data suggest that overall wage growth has picked up during the last year and that the wage growth gap has closed a bit, which are encouraging findings. But the wage growth of part-time workers, as a group, continues to lag well behind that of full-time workers. The relatively low wage growth of part-time workers heightens the importance of the fact that the number of people working part-time—especially involuntarily part-time—remains elevated.
By John Robertson, a vice president and senior economist in the Atlanta Fed's research department, and
Ellyn Terry, an economic policy analysis specialist in the Atlanta Fed's research department