A worrisome job-market trend may last longer than previously thought - and it spells trouble for millions of vulnerable Americans

Getty / Tim Boyle

• A new study from the San Francisco Fed finds that companies increasing reliance on part-time and contract work in the aftermath of the Great Recession may be more permanent than previously thought.
• A high instance of involuntary part-time work points to a labor market that is less robust than the headlines suggest.
• A separate study finds more reliable schedules "actually increased both sales and labor productivity, signaling a high return on investment."

Most Americans are all too familiar with a post-recession shift in the US economy toward more reliance on temporary and contract work.

Alarmingly, new research from the Federal Reserve Bank of San Francisco suggests the temporary work trend is, well, not so temporary.

"The shift toward service industries with uneven work schedules and the rising importance of the gig economy appear to be long-term trends that are unlikely to reverse in the near future," Rob Valetta, a vice president in the SF Fed's research department, wrote in a new blog.

"We find that the changing structural features of state labor markets have propped up involuntary part-time work in the aftermath of the Great Recession."

The rising share of US employment occurring in the leisure and hospitality industry, as well as education and health, "both of which have high rates of part-time employment, made especially large contributions to the overall change," according to Valetta.

The charts below shows a narrowing between the jobless rate and the rate of workers employed part-time but who would like full time work, as well as the increasingly structural nature of part-time employment.

San Francisco Fed

San Francisco Fed

The SF Fed report argues the trend is unlikely to change "in the absence of public policies aimed directly at altering work schedules."

The trend also suggests US employment conditions are less robust than the headline 4.1% jobless rate would suggest.

Stable work schedules boost productivity, sales

A separate report from the University of California's Hastings College of the Law echoes that sentiment. It finds that more stable scheduling can actually boost sales and productivity.

"Most retailers operate under the assumption that stabilizing employees' schedules would hurt their financial performance because instability is an inevitable outcome of variable demand patterns in retail stores," the report finds.

Instead, finds companies' reliance on unstable scheduling "reflects not business realities but an organizational failure."

The authors found more reliable schedules "actually increased both sales and labor productivity, signaling a high return on investment."