Zero-hours contracts just the tip of the iceberg for low-paid and insecure jobs

27 Apr 2015, by Anjum Klair in Labour market

While zero hour contracts have dominated the media headlines recently, short hour contracts, along with other forms of insecure work are also making the lives of many workers difficult.

Our recent analysis shows that in addition to the 700,000 workers who report being on zero hour contracts, there are another 820,000 UK employees working up to 19 hours a week who report they would really prefer more hours. Like zero – hours workers, many short- hours workers don’t know how many shifts they will get each week and often to have to compete with colleagues for extra hours.

Retail is the worst affected sector, with nearly a quarter of a million underemployed short-hour workers employed in supermarkets, shops, warehouses and garages. (Full industry breakdown)

Our concern (as with bogus self employment) is that short hour contracts can allow employers to get out of paying national insurance contributions, making it harder for workers to build up rights to pensions and other benefits. The average underemployed short hours worker would have to work more than 19 hours a week for their employer to start having to pay national insurance for their employment.

Similar to self employment, underemployed short hour workers are typically paid a much lower hourly rate than other employees. The average hourly wage for a short- hours worker on fewer than 20 hours a week is £8.40 an hour, compared to £13.20 an hour for all employees.

Women are more vulnerable to these forms of insecure and precarious work. Around 55 percent of zero hour contract workers are women, in short hours work they account for an even higher proportion – nearly three quarters of those underemployed employees on short hours contracts.

Underemployment overall remains high in the UK. New data published today by Eurostat, the statistical office of the EU, has placed the UK in 23rd place out of 28 for its record on underemployment. The new figures shows 5.9 per cent of UK workers are underemployed, 31 per cent higher than the EU average. And again we find there is a disproportionate number of women underemployed, around two thirds.

Our previous analysis has also shown part -time self employment has continued to rise for women despite the fall in overall self employment. All the net growth in self –employment over the last year has come from women’s part-time self employment. The most common part-time self employed jobs for women in 2014 were hair dressers and cleaners which are roles that typically pay below the living wage.

The growth in low paid and insecure work is alarming with workers not being able to earn enough to meet their basic needs; a particular concern is that women have been disproportionately affected by the rise in insecure work. If this continues this recovery could leave women with a worse relative position than they had before the recession.

NOTE: The TUC data analysis on short hour contracts was done by Emily Pfefer ( TUC graduate Intern)