A hidden drag on the economy

[JBeukema]

Over the past decade, U.S. businesses increasingly have relied on contract workers as a way to keep a lid on health-care and retirement benefit costs and to give them more flexibility to adjust payrolls as conditions change. Now, with the American economy flashing code red, companies from Wall Street to Silicon Valley are casting off temporary workers and freelancers left and right, typically without any severance pay.
While the ability to shed contingent workers helps protect corporate profits, economists say it's a net negative for the economy. That's because while companies may save on labor costs, they aren't likely to use those savings to boost investment with the economy so weak, preferring instead to rebuild their balance sheets.

A HIDDEN DRAG ON THE ECONOMY - Free Online Library

 

[william the wie]

That is all quite true but I don't see where this thread should head.

 

[boedicca]

If we're going to discuss drags on the economy, let's discuss the one of total government spending approaching 50% of our GDP.

Focusing on temp workers as a drag is nonsensical.