Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 18, 1993 TAG: 9303180105
SECTION: BUSINESS PAGE: A11 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
SO MUCH WORK, SO FEW JOBS
CUTTING BACK the amount of overtime worked to 1982 levels would create 3 million new jobs without raising the federal deficit - if employers were willing to hire.\ At a time nearly 9 million people can't find jobs, other Americans are putting in the most overtime since the government started keeping records in the 1950s.
With factory workers averaging 4.2 hours of overtime a week, the Bureau of Labor Statistics says more than one-tenth of all work done in the nation's factories is performed on overtime.
The factory work week grew 24 minutes in the past five months and 12 minutes in February alone. The bureau does not measure overtime hours in the nonfactory work force, but does estimate that the work week is expanding in many fields.
"If we could go back to the amount of overtime worked in 1982, we would create three million new jobs without increasing the federal deficit," said John Zalusky, an economist at the AFL-CIO. He said many workers are putting in extra hours for extra pay against their wishes.
One reason employers are going the overtime route, economists say, is that overtime pay doesn't cost much extra. Fringe benefits, as much as 40 percent of labor costs, mostly are covered by the first 40 hours worked. And the overtime hours generally are worked by employers' most skilled and productive people.
Beyond that, using overtime avoids the cost of hiring and training new workers, finding space for them and dealing with the added paperwork.
Because of all those factors, Zalusky calculates that paying a skilled worker time and a half actually costs employers only about 3 percent extra.
The reluctance to add to permanent payrolls explains another phenomenon in the job market: the increasing use of part-time and temporary workers.
Although the economy created 380,000 new jobs in February, dropping the unemployment rate to 7 percent, the lowest in 15 months, 348,000 of them went to temporary or part-time workers.
"At some point, it makes more sense to hire more workers," Labor Department economist Chris Singleton said. "I'm not sure why employers are holding out. Part of it is uncertainty about the recovery."
Kenneth Goldstein, an economist with the Conference Board, a business-sponsored research organization, said employers have been reluctant to hire out of concern that the recovery will sputter and new workers will have to be laid off.
"Those still working are those who have survived through all the downsizing, so to hire new workers and then have to let them go works against the morale of folks still there," he said.
"They'll hire when they are convinced those hires are not going to be shown the door."
Unemployment, always slow to drop when times get better, has been the spoilsport of this recovery. Analysts say the economy has created 3 million fewer jobs than would be expected in a normal upswing.
"Employers are getting more work out per worker," Singleton said. "That mitigates against the need to add workers."
To the AFL-CIO's Zalusky, the solution seems obvious: Change the Depression-era Fair Labor Standards Act to require double pay, instead of time and a half, for work beyond 40 hours a week.
But Jeff Joseph, vice president for domestic policy at the U.S. Chamber of Commerce, said increasing employers' overtime costs would be counterproductive.
"Most business people would be flabbergasted that someone would think a good thing for the country or for American competitiveness would be to double overtime costs," he said.