How fast are zero hours contracts growing?
Nigel Williams, 13 March 2014
The latest estimate of zero-hours contracts, from October to December 2013, is 585,000, give or take a margin of error of about 60,000.
It looks as if the numbers are rising rapidly, and is enough for Labour’s Chuka Umanna to send out a press release blaming David Cameron for
’employment becoming less secure at a time when families are facing a cost-of-living crisis.’
It may indeed be that there are more people working on these particular contracts. 2013 was a year of major changes in the labour market. The fall in jobseekers allowance claimants has, at times, been sharper than the fall in unemployment. The first of these comes from administrative records of people signing on at Job Centres Plus. The second is constructed from a sample of people’s own assessment of their circumstances in the Labour Force Survey. Although the survey definitions are not changing radically, our interpretation may need to. If told that they are not unemployed enough to receive benefit, survey respondents may respond by looking harder for work, by continuing to consider themselves unemployed even in the absence of benefits, or by redefining their situation. A self-employed person without customers is not so very different qualitatively from an unemployed person without benefits or an employed person on a zero hours getting no paid work.
The situation with zero hours is similar. ONS are concerned that people may not have been aware until recently that their contracts counted as zero hours. It is a possible answer to a question about flexible working. Given that the flexibility is mostly for the employer, whereas the employee is expected to remain available, survey respondents may not consider their working pattern to be flexible at all. Coverage of this issue is almost certainly making more people aware of their circumstances. ONS has set in process a business survey to corroborate the estimate from the Labour Force Survey.
It is a small disappointment that the flexible working question is not yet in the publicly available longitudinal datasets for the Labour Force Survey. As people are interviewed several times over a year, there is scope for seeing what were their circumstances before they began to say they were on zero hours. The increase bears a different interpretation when it is reported by people staying in one job as opposed to by people starting new jobs.
As for how to deal with zero hours, it is over-restrictive to ban its use when it clearly meets many employers’ needs. Chuka Umanna is right to be concerned about exploitation but there are simpler solutions. The minimum wage is now applied only to hours of activity. The fallow time of zero hours contracts is, for employers, something for nothing, as they enjoy potential resource without paying for it. A minimum wage for time available would get over the problem neatly. For a starting value, it could be a rate that paid the equivalent of JSA for 35 hours. Benefit recipients should not have to risk their income by taking a job.