MarketWatch columnist Diana Furchtgott-Roth isn't too impressed with several recent developments on the labor front.
"It’s no coincidence that in the space of a month, California declares Uber drivers to be employees, Hillary Clinton attacks the sharing economy, and the Labor Department issues guidelines on when to classify workers as employees, who are entitled to fringe benefits, or independent contractors, who are not,"
she writes.
"What all three have in common is this: They are trying to stem the growth of independent contractors, the largest source of job growth in the United States, according to the American Staffing Association."
California, Clinton and the Labor Department want people to be hired as employees instead. While as employees they would receive benefits, their salaries would drop, Furchtgott-Roth says.
"Someone who is earning $50,000 as an independent contractor might get paid about $35,000, plus fringe benefits, as an employee," she explains. So the government should stay out of it.
Elsewhere on the jobs front, the labor-force participation rate dropped to a 38-year low of 62.6 percent in June, and that's a major concern, experts agree.
Indeed, it "looks like a defining problem of our time,"
writes Washington Post columnist Catherine Rampell. She notes that the decline has played a major role in pushing the unemployment rate down to a seven-year low of 5.3 percent in July. The unemployment rate includes only people actively looking for work.
"The share of Americans who are either working or looking for work has tumbled for about two decades, with the decline actually accelerating during the current recovery," Rampell says. "Declining labor force participation rates have been blamed on the aging of the workforce, but demographics don’t tell the whole story."
People aged between 25 and 54 also are dropping out of the workforce, she points out. In June, the labor-force participation rate for this demographic was 80.6 percent, down from 84.6 percent in 2000.
This employment problem may help explain why Gallup's U.S. Economic Confidence Index
came in at negative 11 for the week ended July 12, matching the prior week's eight-month low.
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