Zero-hours contracts: when work doesn’t pay

Photo credit:   jacobchristensen

August 9, 2013 // By: Joe Penny

News this week that up to one million UK workers could now be employed on zero-hours contracts stands in stark contrast to this Government’s stated aim of supporting people into work. Indeed, such figures challenge the very premise on which the its welfare reforms rest.

Contrary to many expectations, unemployment figures have not significantly risen since the Coalition's austerity drive began. But as the growth in zero-hours contracts suggests, and as others have already argued, the reason is not because the economy is rebounding, or showing signs of green shoots. Rather, it is because wages have stagnated and people are increasingly finding themselves unwillingly underemployed.

Overall employment figures are masking a worrying shift in working patterns for those at the bottom of the ladder: the precarious, part-time and poorly paid.

A rise in zero-hours contracts highlights serious shortcomings in the Government’s welfare reforms and their oft repeated commitment to make work pay. The stated intention of welfare reform, besides cutting public expenditure, is to get more people back into work. Welfare reform, we are told, is about helping the ‘striver’ get ahead and breaking the pernicious culture of entitlement and dependency that allows the ‘skiver’ to sit at home playing PlayStation all day.

If we take this stated aim seriously, then it would be reasonable to expect the government to seek out policies which a) help prepare people for employment and b) ensure that there are decent jobs for people to go into.

Regarding the first part – preparing people for employment – you can question the way the Government is going about the task. For example, it is placing far too much emphasis on punishing those that don’t find work and spending far too little comparatively on building people’s capabilities. You can also point to the evidence on how much is being achieved by the Work Programme, which is so far damning: the work programme is reportedly “worse than doing nothing”. Yet it is fair to say that the Government has at least focused on this side of the equation.

As for the second aspect, ensuring there are decent jobs, it is equally fair to say that they have neglected it completely. Growth in jobs that are precarious, part-time and poorly paid means that more and more people are experiencing in-work poverty. In fact, as the Joseph Rowntree Foundation points out, the number of people who are poor and in work is now greater than those who are poor and unemployed.

Even if the Government successfully prepares people to enter employment, it is doing nothing to make sure that employment actually improves people's livelihoods or well-being. You can’t make work pay simply by reducing benefits and sanctioning claimants for failing to turn up to jobs-training workshops.

You make work pay by providing good jobs. This means jobs that are satisfying, pay a living wage, provide security and the right number of hours for people, and which are spread evenly across the country. Achieving this requires a clear “good jobs strategy”, which nef has previously outlined.

As long as jobs growth is built on precarious, part-time and poorly paid jobs, work will not pay. The rise in zero-hours contracts are a sure sign of policy failure.

Issues

Work & Time, Public Service Reform, Jobs & Industrial Strategy

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