Asymmetrical Information - Megan McArdle


The Incredibly Shrinking Shift

Retailers are demanding shorter and more variable shifts. That's bad for workers, and not so great for America.

In my last post, I wrote that there are serious specific problems underlying generalized statistics like "inequality".  An article in the New York Times outlines one: people forced into part time work that isn't really enough to support themselves.  

The sense I get from spending a lot of time on personal finance sites is that this is indeed a large and growing problem.  Retail stores keep workers part-time to cut down on benefit costs, but also because it allows them to match their labor cost to customer flow.  They can now use sophisticated software which predicts customer demand, matches with the times people say they're free, and spits out a schedule with shifts as short as 2-3 hours.  

There are good things to be said for this: it controls labor costs, and the employees don't have to spend long hours standing there with nothing to do.  It allows students, retirees and housewives who only want to work for a few hours a week, but have fairly flexible schedules within that, to enjoy jobs tailored to their needs, while helping retailers do more with less.  The trend seems to be moving into other industries, like health care.

But there are also a lot of bad things to be said about this.  The entire workforce cannot be--like most students, housewives, and retirees--supported by someone else's full time job.  Fifteen or twenty hours a week on a retail salary is not enough to support anyone.  And because the shifts are so variable, you can't do what people used to, and string two or three part time jobs together.  Retailers penalize those who block off a lot of time as unavailable by giving them fewer hours.  

(You can argue about whether this is punishment or software arithmetic, but from the employee's perspective, it doesn't really matter.  You have to make yourself "available" for 100 hours a week to be sure of picking up 25--which means that you are not available to any other employer.  It also makes it difficult to have the kind of family life that conservatives envision: hard to schedule that quality time if Mom and Dad do not know from one day to the next whether they will be called into work.)  

The decline in income may show up in inequaltiy statistics, but redistributing income would not fix the problem of employees who cannot work enough hours to support themselves, and are nonetheless expected to spend essentially every hours of their lives on call to their employers.  You could argue that something like a guaranteed national income would help, by giving workers an alternative to getting jerked around by employers--but making sitting in front of the television a viable alternative to work creates its own problems, which I would argue are even larger.

The main problem is the weak labor market, of course; if unemployment were lower, retailers would find it a lot harder to get people to agree to work these shifts.  Since 2006, the number of people who are employed part-time "for economic reasons"--slack demand at their job, or "could only find part time work"--has roughly doubled, while the number employed part-time for non-economic reasons has held steady.  The latter is still a much larger group, to be sure, but the former is gaining fast, and now comprises about a third of the part-time workforce.  

That slack demand for low wage labor--or the propensity of employers to get slight labor savings by wreaking havoc on their employee's lives--may seem like difficult problems to solve.  And I agree.  But at least the attempted fixes would directly target what's wrong.  

Update: A reader tweets that this is inevitable in a shifting retail landscape--and perhaps he's right.  Certainly the instant response that many people will have (mandate longer shifts!) is deeply problematic in the face of internet retailing and the invention of the self-checkout machine.  Underneath every problem there are new layers of problems.  It's turtles all the way down.