In responding to the survey that I, George Howarth and Luciana Berger ran on zero-hours contracts, one person said:
It has been very difficult as I want to move on with my life but can’t as I don’t know when and if I will be next out of work so this stops me from committing into anything financial like moving out or furthering my education more as I do not know if I will be in long-term work as I am always waiting for them words that I am now a permanent employee. This has not only brought stress on myself but people that are nearest to me as it tends to be them that I vent my frustration to.
I cannot imagine a better description of the risk that hyper-flexibility such as misuse of zero-hours contracts exposes our economy to. It is why the employment minister’s confusion this week about whether people on universal credit would be sanctioned or not for refusing a job on zero hours is a demonstration of the lack of care the Tory government has for those who face the challenge of unemployment.
The misuse of zero-hours contracts, and the myriad other ways that people’s incomes have been held down, mean that underemployment is now a serious problem, creating a vicious circle of poverty. If employees cannot work all the hours they would wish to this means they have lower incomes, fuelling the cost-of-living crisis.
But crucially – and what is often missed in this debate, but not by the individual quoted above – there is also the long-term problem we face when so-called flexibility undermines the long-term health of our labour market, calcifying lower skill levels as uncertainty prevents people investing in themselves. Whether it is the chance of a degree or a mortgage, aspirations are stamped on.
The theory that zero-hours contracts increase flexibility and save resources highlights a classic mistake made when we fail to think collectively and about the many. If every employer subscribed to this logic we would be in a race to the bottom that would deskill our labour force.
The Pickavance review, commissioned by Ed Miliband and Chuka Umunna, shows that some businesses use these contracts as a tool to facilitate personal choice and genuine flexibility, and many do not use them at all. But too many others take advantage of people’s desire to work and use zero-hours contracts to create an imbalance between employer and employers.
That so many businesses do not use zero-hours contracts is very telling. As Norman Pickavance found, this is because they find the benefit of flexibility that these contracts offer is outweighed by the negative impact they have by ‘undermining company loyalty and workforce commitment’.
Locally, we need to encourage and facilitate research into our communities’ labour markets to find out what skills are needed and for what jobs. As I wrote for Progress, nationally we need reform in job centres so that their services can become more individualised and productive.
Government must use its powers to outlaw exploitative clauses in zero-hours contracts and make a positive case to businesses to work with us, because having a skilled, motivated, respected and healthy workforce is in everyone’s interest.
We need a government that does not push people into these contracts by threatening them with benefit cuts but instead appreciates the value of investing in people and skills.
Real flexibility is the power to better your life. Whether it is the chance to learn, or have a good family life, real flexibility is the chance to control your circumstances. We have too many people in Britain who now have no such control. That is the job of the next Labour government – to give people that control. Let’s win the election and get on with it.
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Alison McGovern MP is shadow international development minister, a vice-chair of Progress, and member of parliament for Wirral South. She tweets @alison_mcgovern
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