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

date: Sunday 26 April 2015
embargo: For immediate release

Zero-hours contracts are just the tip of the iceberg when it comes to low-paid and insecure jobs, according to new analysis published today (Sunday) by the TUC.

The analysis shows that in addition to the 700,000 workers who report being on zero-hours contracts, there are another 820,000 UK employees who report being underemployed on between 0 and 19 hours a week.

The TUC says that while zero-hours contracts have dominated the media headlines, short hours-contracts, along with other forms of insecure work, are also blighting the lives of many workers.

Underemployed short-hours 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.

The TUC says that short-hours contracts, which can guarantee as little as one hour a week, can allow employers to get out of paying national insurance contributions.

The average underemployed short-hours worker would have to work more than 18 hours a week for their employer to start having to pay national insurance for their employment.

The TUC says that like zero-hours workers, many short-hours workers don’t know how many shifts they will get each week and often have to compete with colleagues for extra hours.

Women are particularly at risk of becoming trapped on short-hour contracts, says the TUC. They account for nearly three-quarters (71.5 per cent) of underemployed employees on short-hours contracts. 

Retail is the worst affected sector. Nearly a third (29 per cent) of underemployed short-hour workers are employed in supermarkets, shops, warehouses and garages – nearly 250,000 people.

Education (16 per cent), accommodation and food services (14 per cent) and health and social care (12 per cent) also account for large shares.

The growth in low-paid, insecure jobs since the crash has been bad for workers and the public finances, says the TUC, with taxpayers having to subsidise poverty pay through tax credits.

The TUC says that short-hour and zero-hours contracts, along with low-paid and bogus self-employment, have reduced tax revenues and are dragging down UK productivity.

Self-employment has accounted for nearly a third (31 per cent) of the net rise in employment since 2010. Figures published last summer by the Office for National Statistics show that average earnings for self-employed workers have fallen by 22 per cent since 2008/09.

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.”

NOTES TO EDITORS:
- The 2014 to 2015 Weekly Secondary Threshold (the point at which employers must start paying NI) was £153. Therefore at the average hourly rate of £8.40 for underemployed short-hours workers, an employee must work 18.2 hours a week before their employer must begin paying NI.
- The share of the net rise in employment accounted for by self-employment refers to the most recent seasonally adjusted figures in the ONS’ April 2015 Labour Market Statistics release.
- All TUC press releases can be found at www.tuc.org.uk
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