ECONOMY: Underemployment adds to jobless woe

By CHRIS BAGLEY - Staff Writer | Saturday, November 29, 2008 5:00 PM PST ∞

Some Southwest County companies are cutting work time for employees who are paid by the hour, a move that staves off outright job cuts but is nonetheless pushing workers to the financial brink.

Less work has long been a fact of life for self-employed people, such as repairmen and commissioned sales agents, amid the economy's two-year downturn. Payroll employees had been relatively immune because pinched employers tend to stop hiring new workers before they cut hours or positions for existing workers.

Businesses in the two-county area of Riverside and San Bernardino had 1.02 million people on their payrolls in October, about 28,000 people fewer than in October 2007, according to state figures. Researchers don't keep track of the number of hours that local employees work in the same way they track numbers of people who are employed or unemployed.

Excluding supervisors, the average U.S. worker put in about 33 1/2 hours per week last month, about 15 minutes less than during the summer and during October, according to the U.S. Labor Department. That statistic probably underestimates reductions among workers paid by the hour because it includes salaried employees whose companies have little incentive to send them home early, said Amar Mann, chief economist for the Labor Department's western region.

Local employers may be cutting hours more sharply on average, according to an informal survey this week. Several employees said they had had an entire day lopped off their work weeks.

For Masterglass Windshield Repair & Replacement, that has meant no more overtime hours for its 10 technicians, sales manager Kari Lightner said.

The Escondido-based business specializes in BMWs, Mercedes and other upscale cars, and the slumping economy had affected few of its clients. But stock markets began to plunge in late September, and potential customers are now shopping aggressively on price, Lightner said.

In early November, the shop stopped opening Sundays, and cut the technicians' work weeks from six days to five.

"In the last month, it's been so dead that we did what we had to do," Lightner said.

Several dental offices, pet groomers and retail shops have cut hours, too, employees said.

It's tough to draw conclusions from the recent cuts in hours, Mann said. A company that reduces hours in the early stages of an economic downturn may have to resort to layoffs a couple of months later, Mann said. But many companies have already laid off their least productive employees and are now cutting hours to avoid having to lay off the productive employees that remain, he said.

In some cases, employers cut hours, hoping that employees will do the same amount of work in less time, with less pay, Mann said.

"It's a temporary measure, to sort of get more out of their existing workers," he said.

In some cases where co-workers are laid off, though, remaining employees end up working longer hours ---- and earning more money, Mann said.

But the only thing that's clear is that Americans are earning less than they were earning a year ago, Mann said. Government data show the total number of employed people declining by about 1 percent in the last year. And the people who have kept their jobs have been earning 1 percent to 2 percent less in recent months than they earned last year, after adjusting for inflation.

In some cases, Mann said, that's because of outright cuts in wages; more often, it's because of reduced hours or because wages haven't kept up with inflation, he said.

Murrieta resident Jennifer Williams said her employer, an oral surgery practice, had recently cut its week from four and a half days to three and a half, entailing a 22 percent cut in her weekly pay. The office had been getting fewer patients, particularly for procedures that insurers don't cover, Williams said.

"It's going to be a tight Christmas," she said.

Contact staff writer Chris Bagley at (951) 676-4315, Ext. 5444 or cbagley@californian. Bagley blogs about local economic trends at http://bizblogs.nctimes.com.