One in 40 British workers is now employed on a zero hours contract. Depending on your point of view, this is either a blight on the state of modern Britain, a sign of capitalism in dysfunction, or it is the jewel in Britain’s flexible labour market crown and proof that one in 40 people who would otherwise be out of work have some form of employment. The truth is a bit more nuanced.
Zero hours contracts were a small, but definitely useful factor in keeping unemployment down during the recession. In difficult times, they enable businesses to hold onto staff. Subsequently, flexibility in the labour market, including the growth in self-employment and slow wage growth, has meant the private sector could create jobs at a faster rate than many predicted.
By most measures, the 2.4 per cent of British employees hired on a contract with no guaranteed hours value their flexibility. They are used heavily by students, the under-25s and over-65s – those who do not or cannot commit to a set number of hours per week. For skilled professionals and tradesmen, those who can work ‘on call,’ the flexibility of a zero hours contract can actually boost their earning power.