Zero-hour contracts do not prevent unemployment, they hide it

Fri, 27/02/2015 - 14:01 -- nick

The latest figures on zero-hour contracts were released last week, and these showed a big jump to 1.8 million in operation in the UK.

700,000 people work using this arrangement as their main job, and the majority are in low-paid sectors like hospitality and retail.

Given the lack of guaranteed hours and the typically low earnings even when these are granted, they should not be seen as a positive to the UK economy.

They are, though, useful for companies, who can tie people up and keep them on the hook without having to pay them.

It is no surprise then that the negative coverage is being fought by their representatives.

Neil Carberry, director of employment and skills for the Confederation for British Industry (CBI) stated that they are key to why Britain has not seen the kind of unemployment suffered across southern Europe.

He said: "flexible contracts offer an important source of job creation".

This seems reasonable at first sight, but there is a reason why it isn't.

The trouble is that zero-hour contracts are a con from a jobseeker's perspective.

If you don't get any work for weeks (perfectly possible under this arrangement) are you actually employed or unemployed, and which of the official government counts should you be part of?

The government has made its decision; on the Department for Work and Pensions (DWP) website a response to a Freedom of Information request states:

"We expect claimants to do all they reasonably can to look for and move into paid work. If a claimant turns down a particular vacancy (including zero-hours contract jobs) a sanction may be applied."

Benefits can now be removed for at least three months from those who don't apply for zero-hours jobs.

The coalition counts a zero-hour job the same as it does a real job, helping to pad out its employment statistics and leading to punishments for those unemployed people who, perfectly reasonably, believe that, given their bills come in every month, their earnings need to as well.

It is no surprise that employers value worker 'flexibilty', but the cost is too high to those caught in the trap of zero-hour insecurity.