TUC right to attack a rising tide of zero-hours misery in insecure Britain

Official figures show the number of people on zero hours contracts is up by a fifth. The Government's complancy is playing into the hands of payday lenders.

James Moore
Thursday 08 September 2016 17:42 BST
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TUC general secretary Frances O'Grady is critical of zero-hours contracts
TUC general secretary Frances O'Grady is critical of zero-hours contracts (AFP)

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Louise Thomas

Louise Thomas

Editor

If you need an explanation for why zero-hours contracts are a problem you just need to watch the noxious Quick Quid ad that is currently polluting cable and satellite TV channels.

The ad goes like this: A harassed waitress is in a spot of bother. She’s been sick but hopes to make up the lost earnings with extra hours. Unfortunately her boss has told her there are none.

What will the poor woman do? Quick Quid to the rescue. She picks up her phone and calls for a loan, and then beams before urging her boss to put her at the top of the list for overtime next week.

The small print tells you that Quick Quid’s representative APR is 1294.1 per cent. These are short term loans, however, as the industry likes to point out. People don’t take them our for a year and the APR is therefore not a fair figure.

So how pricey are they? Let’s run some numbers. If our waitress borrows £200 for 28 days she’ll pay back £244.80. She pays back £200 plus 25 per cent every time she calls Quick Quid in this scenario.

Waiting tables doesn’t pay much as a rule. Rare is the zero hours contract that does. The TUC’s analysis of official figures shows that the median hourly rate for a zero hours worker is £7.25 against £11.23 for permanent workers.

It would only take two or three of those loans to act as a serious drain upon the resources of our waitress or anyone else forced into the position of taking them out through not getting enough hours.

But, but, but, flexibility, say the defenders of zero hours. Employees value that.

Trouble is the flexibility is almost always with the employer. The waitress got sick, she didn’t get paid. She wanted extra hours, they weren’t available.

Extrapolate a bit from the ad. Let’s say that a few weeks later there are extra hours that the restaurant wants her to take. But she can’t get childcare. What happens if she says no? Chances are she’ll find herself at the bottom of the list for extra hours when she needs them in future, if she even keeps her job. Happy days for Quick Quid!

But, but, but, says the Government’s Department for Business, Innovation & Skills (BIS), 70 per cent of people on this type of contract are happy with the number of hours they work. Assuming you believe that figure, it still means 30 per cent are unhappy.

Now, according to the Office for National Statistics some 903,000 people’s main jobs didn’t guarantee a minimum number of hours between April and June, a 21 per cent increase from the figure of 747,000 for the same period last year.

Using the BIS numbers, 270,000 are unhappy with the hours they are getting, up from 224,000. A rising tide of zero hours misery, then.

"If you don't know how much work you will have from one day to the next, paying the bills and arranging things like childcare can be a nightmare,” says TUC general secretary Frances O’Grady.

Exactly.

Prior to the release of the official figures, the Resolution Foundation said it had found that some 400,000 over-25s on zero-hours contracts had been with the same employer for more than 12 months. These arrangements, which have gained publicity recently through Sports Direct's use of them, are increasingly becoming the new reality of employment in insecure Britain.

The employer wins, Quick Quid wins, but the employee all to often ends up trapped in a nasty double bind. Set against that, the complacency of BIS is frankly offensive.

We keep hearing about how Prime Minister Theresa May wants a Britain that works for the many and not just for the few, how she wants to tackle the insecurity that blights life for Britain’s working class and is increasingly finding its way into the middle class.

If she means it she’s got a lot of hard work to do. She might start by sending a rocket up her colleagues at BIS.

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