Controversial zero-hours contracts are just the tip of the iceberg when it comes to low-paid and insecure jobs, according to a new report published today.
An analysis by the Trade Union Congress (TUC) shows that in addition to the 700,000 people on zero-hours contracts, a further 820,000 workers are underemployed – working between 0 and 19 hours a week.
The TUC says that whilst zero-hours contracts have featured heavily in the news, underemployment is blighting the lives of “hundreds of thousands of workers” struggling to make ends meet.
Workers on ‘short-hours contracts’ are typically paid a much lower hourly wage than other workers, the TUC says. The hourly rate for a short-hours worker is just £8.40, compared to an overall average for all employees of £13.20 an hour.
According to the TUC, short-hours contracts “give too much power to the employer” and allows them to escape having to pay National Insurance for their employees.
Like zero-hours contracts, workers on short-hours contracts can be offered as little as one hour paid work each week and have to compete with colleagues for extra hours.
Workers in the retail sector are the hardest hit by low-paid contracts. Nearly 250,000 people working in shops, supermarkets, warehouses and garages are trapped on short-hours – 29% of all underemployed workers. This compares to 16% in the education sector, 14% in food services and 12% of health and social care workers.
The TUC’s report shows that women account for nearly three-quarters (71.5%) of all workers trapped on short-hours contracts.
Zero-hours and short-hours contracts, along with low-paid and bogus self-employment, have reduced tax revenues and are harming the UK economy, according to the TUC.
TUC General Secretary Frances O’Grady said: “Zero-hours contracts are just the tip of the iceberg when it comes to low-paid, insecure work.
“Hundreds of thousands of other workers find themselves trapped on short-hours contracts that simply do not guarantee enough hours for them to make ends meet.
“Like zero-hours contracts, short-hour contracts give too much power to the employer. Bosses have an incentive to offer low wages and fewer hours to get out of paying national insurance.
“Without more decent jobs, people will continue to have to survive off scraps of work and UK productivity will continue to tank.”
The report also draws attention to a sharp increase in self-employment, which accounts for 31% of the net rise in employment since 2010. Figures published by the Office for National Statistics (ONS) show that average earning for self-employed people have fallen dramatically by 22% since 2008/09.
New figures published by Eurostat place the UK at 23rd out of 28 for its record on underemployment.
The figures show that UK underemployment is 31% higher than the EU average, which the TUC says is a sign of the Government’s failure to create high-quality jobs.
Frances O’Grady said: “These figures show what a bad time British people are having at work compared with their European neighbours.
“We have a fragile recovery built on pumped-up house prices, instead of the strong foundation of good quality jobs with decent hours and wages.
“The current approach just isn’t delivering enough high quality jobs to meet demand and it’s leaving too many families struggling to get by on scraps of work.”
Last updated at 16:58pm on 27 April 2015 to include Eurostat figures.