More Workers Seeing Limited Hours As Businesses Struggle

The number of Americans who have seen their full-time jobs chopped to part-time because of weak business has swelled to more than 3.7 million - the largest figure since the government began tracking such data more than half a century ago.

The loss of pay has become a primary source of pain for millions of American families, reinforcing the downturn gripping the economy. Paychecks are shrinking just as home prices plunge and gas prices soar, furthering the austerity across the nation.

"I either stop eating, or stop using anything I can," said Marvin L. Zinn, a clerk at a Walgreens drugstore in St. Joseph, Mich., who has seen his take-home pay drop to about $550 every two weeks from about $650, as his weekly hours have dropped to 37.5 from 44 in recent months.

Zinn has run up nearly $2,000 in credit card debt to buy food. He has put off dental work. He no longer attends church, he said, "because I can't afford to drive."

To judge from the surface, the job market is weak but hardly desperate. Layoffs remain less frequent than in many economic downturns, and the unemployment rate sits at a relatively modest 5.5 percent. But that figure masks the strains of those who are losing hours or working part time because they cannot find full-time work - a stealth force that is eroding American spending power.

All told, people the government classifies as working part time involuntarily - predominantly those who have lost hours or cannot find full-time work - swelled to 5.3 million last month, a jump of more than 1 million over the past year.

These workers now amount to 3.7 percent of all those employed, up from 3 percent a year ago, and the highest level since 1995.

"This increase is startling," said Steve Hipple, an economist at the Labor Department.

The loss of hours has been affecting men in particular - and Hispanic men more so. Among those who were forced into part-time work between spring 2007 and spring 2008, 73 percent were men and 35 percent were Hispanic.

Some 28 percent of the jobs affected were in construction, 14 percent in retail and 13 percent in professional and business services, according to an analysis by Hipple.

"The unemployment rate is giving you a misleading impression of some of the adjustments that are taking place," said John E. Silvia, chief economist of Wachovia in Charlotte, N.C. "Hours cut is a big deal. People still have a job, but they are losing income."

Many experts see the swift cutback in hours as a precursor of a more painful chapter to come: broader layoffs. Some struggling companies are holding on to workers and cutting shifts while hoping to ride out hard times. If business does not improve, more extreme measures could follow.

"The change in working hours is the canary in the coal mine," said Susan J. Lambert of the University of Chicago, a professor of social service administration and an expert in low-wage employment. "First you see hours get short, and eventually more people will get laid off."

The growing ranks of involuntary part-timers reflect the sophisticated fashion through which many American employers have come to manage their payrolls, experts say.

In decades past, when business soured, companies tended to resort to mass layoffs, hiring people back when better times returned. But as high technology came to permeate American business, companies have grown reluctant to shed workers. Even the lowest-wage positions in retail, fast food, banking or manufacturing require computer skills and a grasp of a company's systems. Several months of training may be needed to get a new employee up to speed.

"Companies today would rather not go through the process of dumping someone and hiring them back," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. "Firms are going to short shifts rather than just laying people off."