Hyundai Motor Manufacturing Alabama LLC, a unit of Hyundai Motor Co., idled 3,300 production workers for 10 Fridays over the past three months, effectively dropping their weekly hours to 32 during the affected weeks. Pella Corp., a window and door manufacturer in Iowa, has trimmed hours for several hundred of its 10,000 employees over the past few months, many to part-time hours.
The moves indicate how cautious employers have become as they grapple with the slowing economy. Reducing hours is enabling many companies hurt by slowdowns in housing and autos, in particular, to hold off on layoffs and retain skilled workers, but the cuts are squeezing earnings for many workers and putting some workers' benefits at risk.
There were 2.8 million people working part-time hours because of slower business conditions in 2007 on average, up 231,000, or 9%, from 2006, according to Labor Department data. The increase reverses a steady decline from 2003 through early 2006. Since August of 2007, the upward trend has accelerated, and it ticked up again in December to 3.1 million people, the highest monthly figure in four years.
"Employers have been holding the line on actually laying people off," said Marisa Di Natale, a senior economist at Moody's Economy.com. Cutting hours saves employers costs associated with layoffs, including severance and retraining, she said. "As long as they can keep payroll flat and vary the hours, they're going to continue to do that."
While the group of workers in part-time positions because of slower business represents a relatively small slice of the roughly 25 million part-time workers tracked by the government and an even smaller one of the total U.S. work force, economists say the gauge can capture weakness in the labor market that doesn't show up in other figures.