Part-time employees earn 19.8% less per hour than full-time workers

There is a penalty for working part-time in America that goes beyond the lower annual earnings and fewer benefits that part-time employees get. Across demographic groups, even in the same occupation and industry, workers face a stiff pay penalty for working part-time.

According to research from Penn State economics professor Lonnie Golden, part-time workers face an adjusted hourly wage penalty of 29.3% compared with workers with similar demographic characteristics, and education levels who work full time. Even after fully adjusting, for their industry and occupation, part-time workers are paid 19.8% less than their full-time counterparts.

The part-time worker gap is even bigger when the difference in benefits is taken into account, adding up to an average total compensation penalty of 25.3%.

The adjusted wage penalty is 15.9% for women and 25.8% for men, suggesting that men pay a relatively higher price for working part time. However, women are much more likely to be working part time hours, and constitute nearly two-thirds of those employed part time.

By gender and race, white men face the highest wage penalty at 28.1%, followed by black men at 24.6%, black women at 17.2%, white women at 16.4%, Hispanic men at 16.9%, and 12.3% for Hispanic women. The difference in penalties likely in part reflects white male workers’ advantage in wage rates at full-time jobs, as well as a shared disadvantage when they are in part-time jobs.

Golden finds that the part-time pay penalty is higher for those working part time who would rather be working a full-time job. Part-time workers who work reduced hours because of economic reasons faced a larger penalty than those who chose part-time work for other reasons.

“While some workers prefer the time flexibility that part-time working provides, more than 4 million U.S. part-time workers still would prefer to work a full-time job and likely many others who are working part time for non-economic reasons would also prefer full-time work if they did not have constraints like the lack of support for family caretaking and pursuing education,” said Golden. “Whatever the motivation for working part-time, all such workers face a pay inequity that should be directly addressed through policy action.”

The report suggests a variety of ways that policymakers could promote pay parity for part-time workers. Policymakers, Golden recommends, should adopt codified measures to ensure rights for workers in part-time jobs, including provisions for wage and hours fairness and pro-rated benefit coverage.

Senator Elizabeth Warren (D-Mass.), member of the Senate Health, Education, Labor and Pensions Committee, and Representative Jan Schakowsky (D-Ill.) introduced the Part-Time Worker Bill of Rights Act, legislation to strengthen protections for part-time workers and allow them to better balance their work schedules with personal and family needs.

The legislation would address one of the primary issues that hourly workers face – work schedules that do not provide as many hours as they need to support their families – and provide additional protections and benefits for part-time workers.

Corporations often use underemployment, giving part-time workers fewer hours than they want and spreading work among many part-time employees rather than hiring full-time employees, as an intentional strategy to avoid providing benefits and paying higher wages in order to boost short-term profits.

A recent, groundbreaking study found that unpredictable schedules – which often mean lack of access to enough working hours – are associated with financial insecurity, housing insecurity, high stress, poor health outcomes, and, for parents, less time spent with children, which, in turn, leads to worse outcomes for children.

Another study found that 65% of respondents with part-time jobs had dealt with “at least one serious material hardship” in the past year. Workers facing these challenges are disproportionately women and workers of color as exposure to schedule instability is 16% higher among workers of color compared to white workers.