Zero hours nation

Zero-hours contracts are on a worrying upward trajectory, according to figures released today (February 25) by the Office of National Statistics (ONS).

 
Comparing the last quarter of 2013 to the same time period a year later – from October to December 2014 – the number of zero-hours contracts shot up to almost 700,000, an increase of more than 100,000.

 
Zero hours contracts do not guarantee workers any hours in a given week, an arrangement that often translates into insecure wages and weaker employment rights.

 
The ONS says that the uptick could be attributed to the rising awareness of such contracts, since the figures are self-reported and depend on workers knowing their employment status.

 
Economist John Philpott, however, contends that heavy media coverage of zero-hours contracts happened in 2012, well before the most recent increase reflected in today’s figures.

 
“The big leap in public awareness of zero hours contracts was in 2012 and 2013 which suggests that most of the rise between 2013 and 2014 is probably due to a greater number being employed in this way,” Philpott contended on his blog, the Jobs Economist, today.

 
Zero-hours workers

 
Who is most likely to be on a zero-hours contract?

 
According to figures, such contracts are rife in traditionally low-wage, high-profit industries, such as the hotel and catering industry.

 
Women are most likely to be on zero-hours contracts, as are those under 25 and over 65, those in full-time education and those working part-time.

 
Several recent reports show that zero-hours contracts are increasing at a faster clip in areas of the country already suffering from fewer employment opportunities, such as the North East.

 
The most prevalent users of zero-hours contracts are big businesses, including such employers as McDonald’s, Sports Direct, and JD Weatherspoon.

 
Unite general secretary Len McCluskey argues that the use of zero-hours contracts among big businesses demonstrates the length to which they will go to exploit workers in their never-ending quest for higher profits.

 
“The prevalence of zero-hours work in bigger employers indicates that this rise is not so much about employers trying to weather the downturn, but more about businesses enjoying the freedom this form of employment affords them from the fundamental rights and decent wages that ought to accompany responsible employment,” McCluskey said.

 
Flexibility for whom?

 
Business secretary Vince Cable hailed zero-hours contracts for providing the so-called “flexibility” that many workers supposedly want. It’s a line that’s been repeated ad nauseam by businesses aiming to justify these contracts.

 
Philpott, however, argues that this justification obscures how other workers can be affected by the rise in zero-hours contracts.

 
“What [the flexibility argument] ignores is that the ability of employers to hire people in this way undermines the bargaining ability of other workers, thereby dampening pressure for improved pay and conditions at the bottom end of the labour market,” Philpott noted.

 
Earlier this month, a piece in the Manchester Evening News told the story of Joe Jennings, who was initially swayed by the seemingly good terms of a zero-hours contract job in home care.

 
But soon Jennings found himself in the absurd position of doing ten and fifteen minute shifts here and there. Nine hours of work in one week was the best he could hope for. He often had to wait, sitting in his van, two hours between shifts.

 
“I was paying more to travel to shifts than I actually made,” he said. “It actually cost me more to go to work than I made.”

 
Jennings eventually got his old job back, but not before suffering, barely above the breadline, for nine whole months.

 
Shut out of the economy

 
Both Philpott and McCluskey argue that the only outcome of zero-hours contracts is chronic income instability.

 
“The practice undermines the spirit of the statutory National Minimum Wage, since although people employed on zero hours contracts are entitled to the minimum wage for the hours they work the lack of guaranteed hours is a source of income insecurity,” wrote Philpott.

 
McCluskey went on to say that the insecure nature of zero-hours contracts hobbles working people’s ability to fully participate in the economy.

 
“An economy based on low-paid, insecure work shuts people out of the economy – you cannot hope for a home or save for the future when you don’t know if you will have a wage, let alone what it will be,” he said.

 
Indeed, mortgage lenders are particularly reticent to take on borrowers who are on zero-hours contracts or are self-employed.

 
For example, Santander considers income earned on zero-hours contracts as only secondary income, while HSBC requires a borrower working on a zero-hours contract to demonstrate a three-year track record of income earned.

 
Growing pattern

 
Ultimately, the biggest problem with zero-hours contracts is that their use has increased even in the face of a so-called economic recovery. This indicates, as Philpott notes, a “structural shift” in employment arrangements.

 
“It looks as though zero hours contracts are becoming a more ingrained feature of the UK’s employment landscape, which is likely to buttress poor pay and working conditions in the lower reaches of the labour market,” noted Philpott.

 
McCluskey pointed to the record levels of self-employment in the country, arguing that, combined with the increase in zero hours jobs, “insecure work is becoming an employment model of choice.”

 
If this is the case, then the only way to make insecure work arrangements go away is to deliberately consign them to the statutory dustbin.

 
“We need urgent, meaningful action to rebalance our economy,” McCluskey asserted. “A ban on zero-hours contracts and the return of collective bargaining must be the basic first steps to put a floor under the ever-falling living standards for millions in this country.”