Tuesday, August 8, 2017

The number of people on zero hours contracts has quadrupled since records began

By Georgina Lee-7 AUG 2017

Unemployment is at its lowest level since 1975, according to the Office for National Statistics.

And the Conservatives have been keen to point out that since they took office in 2010, the proportion of people that want to work but can’t get a job has fallen by 3.5 percentage points.

But while unemployment levels are low, so is job security. The number of “zero hours contracts” is at a record-high at over 900,000.

FactCheck looks at the figures.

What is a zero hours contract?

According to the ONS, which compiles the main measure of employment (the Labour Force Survey), there’s no standard definition of “zero hours contract”. In fact, many people may not be aware that they are on one.

But the ONS says that the common theme among this type of arrangement is that the contract doesn’t guarantee a minimum number of hours of paid work for the employee.

How many people are on zero hours contracts?

In 2000, an estimated 225,000 people were on zero hours contracts (although the term wasn’t widely used). That figure fell steadily for two years, but began to creep up again through the 2000s.

When the Conservatives took office in 2010, 168,000 people were employed on these terms. That number rose gently until 2012, when there was a sudden leap from 252,000 at the end of 2012 to 585,000 the following year.

That sharp rise has continued, and by the end of 2016, just over 900,000 people were on zero hours contracts – four times the number in 2000.

Why are more people on zero hours contracts?

One thing to bear in mind is that the Labour Force Survey, which interviews 40,000 people around the country to estimate trends in employment, relies on people’s own descriptions of their working patterns.

The ONS says this can potentially skew the data for a few reasons. They point out that many people may not even know that they are on zero hours contracts, which could mean the Survey under-reports the true number of people in this situation.

On the flipside, they also note that the term “zero hours contract” has become more widely-recognised in recent years, which may account for some of the increase in reported cases. The ONS say that they can’t accurately measure the effect of people becoming more aware of the term.
So the accuracy of reporting processes may partly explain the recent surge.

Isn’t this about the gig economy?

We’ve heard a lot in recent years about the so-called “gig economy” as companies like Uber, Deliveroo and TaskRabbit have grown. The RSA defines the gig economy as “the trend of using online platforms to find small jobs, sometimes completed immediately after request”, and estimates that 1.1 million people carry out gig work in the UK.

But it’s not quite the same as a zero hours contract. People in the gig economy are paid per task performed – be that providing a lift, delivering a meal or completing a chore – whereas employees on zero hours contracts are paid per hour of work carried out.

That said, people on zero hours contracts may also “top-up” their incomes with work in the gig economy.

Women and young people are more likely to be on zero hours contracts

  • According to the ONS, 52 per cent of employed women are on zero hours contracts.
  • The likelihood of working on a zero hours contract is higher if you’re young: 34 per cent of workers aged 16-24 don’t have guaranteed working hours, compared to 12 per cent of the rest of the population.
  • 18 per cent of people on zero hours contracts are in full-time education.

Are zero hours contracts necessarily a bad thing?

Many commentators claim that zero hours contracts mean that workers have little or no job security. The Trades Union Congress, which represents around 5.8 million workers in the UK, says zero hours contracts allow bosses to treat workers like “disposable labour”.

A spokeswoman for the TUC said in March this year: “If you’re on a zero-hours contract you have no guarantee of work from one day to another. Put a foot wrong and you can be let go in a heartbeat. Turn down a shift because your kid’s sick and you can be left with little or no work.”

They cite research suggesting people on zero hours contracts are paid around a third less than those on standard contracts.

But there are some people who benefit from zero hours contracts. For example, the ONS points out that the large number of young people on zero hours contracts who are also in full time education might be explained by the fact that this arrangement is more flexible than standard working patterns, and allows employees to adjust their hours around their other commitments.