Many economists expressed satisfaction with the 223,000 job gain in April and the 5.4 percent unemployment rate, a seven-year low.
But beneath the surface, trouble lies, says financial writer Elaine Pofeldt.
"Tucked away in the pages of a new report by the U.S. General Accounting Office is a startling statistic: 40.4 percent of the U.S. workforce is now made up of contingent workers — that is, people who don't have what we traditionally consider secure jobs," she writes in an article for
Forbes. That's up from 30.6 percent in 2005.
The contingent workers include:
- Agency temps: 1.3 percent
- On-call workers: 3.5 percent
- Contract company workers, 3.0 percent
- Independent contractors: 12.9 percent
- Self-employed workers: 3.3 percent
- Standard part-time workers: 16.2 percent
Pofeldt says the data raise more questions than answers, noting that contingent workers typically have higher poverty rates, low pay, greater job instability, less access to private healthcare and higher reliance on public assistance programs.
"Do we revamp our social safety net to reflect the fact that so many millions of Americans are untethered from employers who once provided security? Should we crack down on businesses that try to avoid paying a living wage? Should we revamp our education system?"
Meanwhile, investment legend Buffett, writing in
The Wall Street Journal, recommends an increase in the earned income tax credit (EITC) to combat the nation's growing income inequality.
"This widening gap is an inevitable consequence of an advanced market-based economy," he says.
"[It's] neither the fault of the market system nor the fault of the disadvantaged individuals. It is simply a consequence of an economic engine that constantly requires more high-order talents while reducing the need for commodity-like tasks."
Better education can help. "But even with the finest educational system in the world, a significant portion of the population will continue, in a nation of great abundance, to earn no more than a bare subsistence," Buffett says.
A higher minimum wage isn't the answer, he maintains. A large increase would reduce employment big-time, while a small increase wouldn't help workers much.
"The better answer is a major and carefully crafted expansion of EITC, which currently goes to millions of low-income workers," Buffett argues.
"In essence, the EITC rewards work and provides an incentive for workers to improve their skills. Equally important, it does not distort market forces, thereby maximizing employment."
© 2025 Newsmax Finance. All rights reserved.