For the first time on record, the number of people on zero-hour contracts has risen to over a million. The number of people on zero-hour contracts rose by 17% compared to the same period last year, and this rise was most pronounced in two industries: health and social care (35%) and wholesale and retail (41%). The increase in these two industries equates to 90,000 more people on zero-hour contracts, which is over half of the 156,000 increase across all industries.
The steep increase, especially in these two industries, suggests that the pandemic has led to increased demand for key workers in these sectors, but many of these new workers are being employed on insecure contracts.
Zero-hour contracts, and insecure work in general, have long been an issue in some of the occupations we now call ‘key workers.’ A quarter of the adult social care sector workforce, for example, are employed on zero-hour contracts.
Usdaw, the union for retail workers, has raised the issue that many retail workers, including those working during the pandemic, are getting by on low pay and insecure contracts – not just zero-hour contracts, but also short-hour contracts that fail to reflect the number of actual hours worked and leave workers reliant on overtime.
Zero-hour contracts are not the only type of insecure work. Recent TUC analysis estimates that once you add in those employed in other forms of insecure work (such as agency, casual and seasonal work) and those in low-paid self-employment, around 3.6 million people are in insecure work.
Low-paid self-employment is the model used by plenty of ‘gig economy’ platforms. Many of those delivering food for companies like Deliveroo during the pandemic, for example, are not employed by the company, but are instead self-employed contractors. This means the companies hiring them don’t need to pay the minimum wage, or provide holiday or sick pay. A recent exception to this is JustEat, which has recently announced its decision to move away from the gig employment model.
While some claim that zero-hour contracts and other forms of insecure work provide flexibility, the reality is that this flexibility is one-sided, benefitting the employer or company hiring the worker. Giving bosses the ability to suddenly provide someone with no hours creates a situation where those on zero-hour contracts feel compelled to work whenever asked out of fear of losing favour with their boss.
With no guaranteed hours, workers are left at the whim of their employer, facing irregular hours and therefore irregular income, as well as last minute shift cancellations. This makes it nearly impossible for them to plan their finances or time. The latter is a particular issue for parents on zero-hour contracts, who must arrange childcare (which can also be prohibitively expensive).
When we talk about thanking key workers, it’s therefore vital that we see clamping down on insecure work as part of that. It’s time to follow the lead of Ireland and ban zero-hour contracts altogether.
This would involve ensuring decent notice of shifts and compensation for cancelled shifts. We also need to see strong penalties for employers who mislead people about their employment status, protections for the genuinely self-employed, and a move towards genuine two-way flexibility. This would involve the introduction of a right for workers to work flexibly from the first day in the job, and for all jobs to be advertised as flexible.
But tackling insecure work won’t be enough (or even really possible) unless we ensure everyone is paid enough to live on. 4-in-10 key workers are paid less than £10 per hour. This rises in certain occupations, such as in social care, where 7-in-10 employees earn less than £10 per hour.
Raising the minimum wage to £10 per hour will benefit 3.7 million key workers, as well as the 5.6 million other workers who earn less than this. We also need to continue to campaign for pay rises for public sector workers who are still suffering after years of freezes and cuts to their pay. We can’t allow the pandemic to be used as an excuse to keep wages low, and see a continuation of the decade-long pay squeeze we’ve seen since the 2008 recession.
This all hints at a wider issue: it’s vital that we protect and create jobs, but we have to be more ambitious than that. As we look at how to address the levels of unemployment that many are forecasting, we must ensure that we are protecting and creating well-paid, good quality and secure jobs.
As we look to the future, we should be looking at how we move away from the labour market trends that were increasingly prevalent before the pandemic hit: high employment rates, but increasingly insecure, precarious and low-paid work.
Ending insecure work and raising the minimum wage are steps towards a better working future. But we also need public investment that creates these well-paid jobs, especially in the wake of the pandemic. Fast-tracking government investment in environmentally friendly and publicly beneficial projects such as broadband, green technology, transport and housing could deliver a 1.24 million jobs boost by 2022.
Meanwhile, those who do lose their jobs must have the support of a proper safety net to fall back. This requires an immediate overhaul of Universal Credit. This should include raising the basic level and legacy benefits to £260 per week, scrapping the five-week wait for first payment by converting emergency payment loans to grants, removing the two-child limit and benefits cap, and re-suspending conditionality requirements.
As lockdown eases, we can’t forget the lessons we learned at its peak. While many of us could work from the safety of our homes, and some of us were furloughed, millions of underpaid and undervalued key workers kept the country going. The least we can do to thank them is to overhaul a labour market that leaves too many facing low pay and chronic insecurity.