Belfast Telegraph

Saturday 19 April 2014

DebateNI home of Northern Ireland politics

'Zero-hours' contracts hurt most vulnerable

Zero-hours contracts have helped create a 'Precariat' of 34,000 at-risk workers here. And the effect on the economy is just as ruinous, writes Robin Wilson

Risky business: Sports Direct stores are under fire for issuing 'zero-hours' contracts.
Risky business: Sports Direct stores are under fire for issuing 'zero-hours' contracts.

The Stormont Executive has wasted much time and energy tilting quixotically at the windmill of lower corporation tax for Northern Ireland.

While its ear has been turned by business lobbyists supporting, unsurprisingly, tax-breaks for capital, ministers have been blind to what has been happening in the labour market – and, in particular, to the needs of the most marginalised within it.

This week's revelation that one in 20 workers here – some 34,000 in all – is on a 'zero-hours' contract showed starkly that the bottom is falling out of that market, at great human cost.

Zero-hours contracts come with zero sick pay and likely zero holiday pay, too. And zero-hours workers are mainly female.

Conventionally assumed to be responsible for household budgets, women living on volatile incomes – plenty of work one week, nothing the next – are bound to find it hard to make ends meet – never mind to arrange childcare.

Official UK statistics on wellbeing show, as one would expect, that those on temporary contracts have lower life-satisfaction, lower self-esteem and higher anxiety than their permanent colleagues.

The social supports that used to be there to counter super-exploitation – notably trade unions, the welfare state and constraints on the movement of capital – have all been deliberately eroded.

And a much wider swathe of the workforce than those on zero-hours contracts is affected by the consequent insecurity.

Just as Northern Ireland appears to have proportionately more zero-hours workers than Britain, it also came out worst in a recent UK-wide survey of living standards.

Fully two out of three adults surveyed in the region said they were struggling to keep up with bills and repayments.

Under-employment, low (or no) annual pay increases and inflation in food and fuel prices have all eaten away at the value of salaries for those still in work.

The chancellor, George Osborne, has clutched at the straw of some modest growth to declare that the economy is "healing".

But the slowest UK recovery since the 1870s depression has been retarded precisely because downward pressures on living standards have flattened demand for goods and services.

The availability of zero-hours contracts as an option allows companies to compete by racing further to the bottom, enhancing their own profits at the expense of their employees and the wider economy, while undermining those firms willing to offer greater job security and employee rewards.

They have been outlawed in the Netherlands – and they should be outlawed in the UK.

What the citizens of Northern Ireland desperately need is a regional economy which moves from its chronic low road of low employment, low productivity and so low incomes on to a high road of high employment, high productivity and, so, prosperity.

What that requires is an activist Government focused not on the corporate elite – to be wooed at yet another ineffectual investment conference in the wake of the G8 summit – but on the bulk of the population for whom life is about work, having enough of it and trying to get by.

There are instruments available to the Executive to support, in particular, those with least labour-market leverage to control their lives – the group that has come to be called the "Precariat".

The Department of Enterprise, Trade and Investment (Deti), under Arlene Foster, could tell Invest NI that companies utilising zero-hours contracts, or paying any workers less than a living wage, will no longer be eligible for support.

The Department of Finance and Personnel (DFP), under Simon Hamilton, could insert a similar requirement into all public procurement contracts and ensure that zero-hours arrangements are obliterated from the public sector itself.

Ministers have agreed that there should be "social clauses" in procurement tenders – they just haven't got round to agreeing what should be in them.

Both departments could finally back the Green New Deal readily agreed between the social partners – business, the unions and the voluntary sector – after devolution was renewed in 2007.

This would provide secure employment for a trained-up green-collar army of workers involved in such tasks as retrofitting homes, tackling greenhouse-gas emissions and fuel poverty in one fell swoop. Much of the expenditure could be advanced as loans to homeowners, to be recouped with falling fuel bills. Unfortunately, the party in control of Deti and DFP – the DUP – has shown zero interest in any of this agenda.

In what might be called its Protestant grammar-school worldview, business is best left to itself and the market will miraculously find its ideal equilibrium – nostra devastated by the crisis that began five years ago with the collapse of Lehman Brothers.

Germany's powerhouse performance, compared with the insipid UK recovery, has demonstrated how economies organised in the public interest – with regional public banks to support firms, collective apprenticeship arrangements, which prevent firms poaching skilled labour, forms of worker participation and feed-in tariffs to favour renewable energy – will always prevail over those insisting on the dogma of laissez-faire.

A growing number of DUP voters have joined the ranks of the "Precariat" in recent years. Support for the party fell below 200,000 in the 2011 Assembly election.

As things stand, it might become a lot more precarious in 2016.