Is UK employment really on the road to recovery?

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Earlier this week, the Office for National Statistics published the latest employment statistics; with 30.39 million in work, a five-year high, and an increase in average wages exceeding inflation for the first time since 2010, they have been triumphantly flaunted by the Coalition as definitive proof of the success of their economic policies. However, there are a number of reasons why it might be a little too soon to join the employment minister Esther McVey in celebrating the UK economy getting ”back on the path to prosperity”.

The first major revelation of the report which undermines the dominant narrative of growth and recovery is that the number of self-employed people in the UK has steadily risen to reach 4.5 million, around 15% of the total workforce, the highest proportion since records began in 1992. The government are keen to suggest that the majority of these are creative, self-made entrepreneurs; however, a recent report from the Resolution Foundation think tank recently found that ‘of those who became self-employed in the last five years, more than one in four (27 per cent) gave lack of work alternatives as the reason…The new face of self-employment is more likely to be female and looking for an alternative compared with their more established counterparts’. 

The report clearly demonstrates that, while the majority enjoy the benefits self-employment, there is a considerable minority who have been forced into doing low-paid, casual work without the security of being an employee. There is no comprehensive survey of the wages of the self-employed available; significantly, this has allowed the government to discount 15% of the total workforce in calculating that wages have outstripped inflation. It is difficult to speculate about the extent of the impact the inclusion of these wages would have, but, with The Guardian reporting last week that the average annual wage for self-employed women is just £10,000, the difference could potentially be considerable.

The report also reveals that another significant boost to the overall 30 million figure is part-time employment, which has increased to reach 8 million. As with self-employed statistics, while there is a majority of people for whom part-time or temporary work is an empowered choice, we can again discern the growing trend of a considerable minority who were left with no other option: 36% of temporary staff, and 17% of part-time staff stated that they were undertaking such employment because they ‘could not find a permanent job’. The increase of part-time employment is therefore another inconvenient truth which disrupts the sweeping assumption that all part-time or self-employed work is equally valid evidence for the resilience of the labour market. 

The Bank of England’s continued refusal to raise interest rates despite unemployment falling beneath 7% demonstrates that other economists are less jubilant. Howard Archer, chief UK and European economist at IHS Global Insight, told the BBC that “The Bank of England will likely regard the fact that there are 1.421 million people who are working part-time because they cannot find a full-time job as evidence that there is still substantial slack in the labour market.”

In McVey and the Chancellor George Osborne’s self-congratulatory comments to the media, the buzzword was security: ‘greater economic security’ or ‘the security of a regular wage’. While the ONS report records the dramatic effect that irregular part-time and self-employed roles have on employment figures, a major trend which has not been accounted for by the study is the increasing prevalence of zero-hours contracts, which have been subject to widespread criticism for the culture of insecurity they enforce upon staff.

Zero-hours contracts give an unprecedented amount of power to the employer: employees must be ready to work whenever they are asked, for as many or as few hours as required. The legal status of those on zero-hours contracts is ambiguous: whether they are technically ‘‘employees’ or ‘workers’ remains undetermined. This means that currently those on such contracts are often not protected from unfair dismissal, and maternity or redundancy rights. The employer is similarly not obliged to provide sick pay or holiday leave; the only obligation is to pay the national minimum wage.

The number of people currently on zero-hours is uncertain: the government’s initial forecast of 250,000 people was proven to be wildly underestimated. The most recent ONS statistics cite 580,000; the Chartered Institute of Personnel and Development estimates one million, and Unite the Union up to five million. After increasing pressure from unions and the press, the government has launched an investigation which received over 36,000 responses.

The results of this report, which closed over a month ago, are yet to be published, a conveniently delayed blockage of information which would call into question the ‘greater economic security’ that the UK is apparently enjoying. Whatever its findings, it is clear from comments made by Vince Cable that there is no question of a serious prohibition of zero-hours’ work: “We do not believe that zero-hours contracts are bad in themselves… they have a place in today’s labour market and are not proposing to ban them outright”.

Cable has also defended the common of use ‘exclusivity clauses’ in the contracts, which further restrict the rights of employees by ensuring they are only able to work for one company regardless of how insufficient the hours offered may be, citing the need for certain companies to protect sensitive information. However, given that the majority of zero-hours contracts are unskilled work; this would be applicable only in a very specific and limited number of cases.

The government is currently too busy celebrating the ‘five-year-high’ in employment to really concern themselves with the realities of the job market, harnessing superficially impressive statistics for their own party-political ends as next year’s general election looms ever closer. The complacent assumption that a job is a job is a negation of  the continued absence of long-term, secure employment; if, as McVey claims, ‘the rise in employment is being fuelled by businesses and entrepreneurs… and private sector jobs across the country’ it is also being fuelled by part-time, low-paid, casual roles filled by workers with no alternative. 

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