WORK AND PENSIONS SELECT COMMITTEE:
Labour market seminar: 26TH February:
‘Trends in part-time working and short-term employment
contracts and the impacts on benefit claims.’
BILL WELLS:
DEPARTMENT FOR BUSINESS,
INNOVATION & SKILLS.
STRUCTURE OF THE
UK BENEFIT SYSTEM:
• The UK Beveridgean system provides a universal
basic benefit floor that is more comprehensive than
most other countries but less generous.
• And, unusually, not only are the main rates low but
they are also flat rate and indefinite in duration.
• Consequently, work generally pays in the UK with over
70% of all working age benefit recipients having a
main rate below £100 p.w. whereas fewer than 10% of
employees earn less than £100 p.w.
• The situation is complicated if people are also eligible
for housing benefit as the rules are different and the
amount received does not relate to the individual.
• People on tax credits and, also, eventually Universal
Credit are more likely to be on housing benefit.
The UK’s Beveridgean welfare system delivers a relatively
universal welfare state including a comprehensive benefit
floor at around 40% of average income…
OECD POVERTY RATES:
% OF POPULATION BELOW 40% & 50% OF MEDIAN INCOME
22%
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
40% [2005]
50% [2010]
…but UK main rates of benefits are low by international
standards. They are, however, universal and,
unusually, flat-rate and indefinite.
OECD NET REPLACEMENT RATES [WITHOUT HOUSING BENEFIT]: 2011
RATIO OF OUT-OF-WORK BENEFITS TO SINGLE PERSON'S TAKE HOME PAY [FOR 67% OF MEDIAN EARNINGS]
100
90
80
PER CENT
70
60
50
40
30
20
10
0
START OF CLAIM
AFTER 5 YEARS
The main JSA benefit rate is around 12% of mean full time earnings and
around 17% of overall median earnings. So, if that benefit is all someone
receives they are already very likely to be better off in work- particularly
given the raising of the income tax allowance, eventually to £10,000 p.a.…
JOBSEEKER'S ALLOWANCE AS A % OF AVERAGE EARNINGS: AT APRIL:
22
JSA RATE FOR SINGLE PERSON 25 & Over: AVERAGE EARNINGS NES/ASHE: SOURCE DWP/NOMIS
20
% OF AVERAGE EARNINGS
18
16
14
12
10
8
6
4
2
0
All Employees: Median Earnings
Full-time Employees: Mean Earnings
…and whilst there are differences within and between the different
working age benefit rates it remains true that only around 5% of
people receive a main rate of benefits of more than £150 per week.
DISTRIBUTION OF WEEKLY AMOUNT OF MAIN OUT-OF-WORK BENEFITS:
MAY 2013: WORKING AGE BENEFITS: SOURCE: DWP TAB TOOL
80
68
70
60
58
PER CENT
50
50
40
35
32
30
23
20
15
15
11
10
10
10
8
5
5
0
21
0
£0
1
1
0
0-£20
JSA
0
1
1
0
£20-£40
1
2
£40-£60
2
£60-£80
LONE PARENT & OTHER ON IS
9
4
ESA/IB/SDA
6
1
1
£80-£100
4
£100-£150 £150 & Over
TOTAL
…with only around 15% of employees earning less that £150 p.w.
and less than 10% earning less than £100 p.w.
GROSS AND NET WEEKLY WAGES: ALL EMPLOYEES: SOURCE ASHE 2013:
NET WAGES = GROSS WAGES NET OF INCOME TAX AND EMPLOYEE NATIONAL INSURANCE CONTRIBUTIONS:
£1,800
£1,650
£1,500
£1,350
£1,200
£1,050
£900
£750
£600
£450
£300
£150
£0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
Percentile
Gross Weekly Wages
Wages Net of Income Tax and NICs
75
80
85
90
95
However, for people receiving housing benefit then replacement
rates are not as low by international standards and out of work
income is higher and ‘Making Work Pay’ is more difficult – both at
the start and throughout the claim…
OECD NET REPLACEMENT RATES [WITH HOUSING BENEFIT]: 2011
RATIO OF OUT-OF-WORK BENEFITS TO SINGLE PERSON'S TAKE HOME PAY [FOR 67% OF MEDIAN EARNINGS]
100
90
80
PER CENT
70
60
50
40
30
20
10
0
START OF CLAIM
AFTER 5 YEARS
…also the structure of housing benefit is more complex than the
main benefit rates. It is based not on individual circumstances but on
the rent; is not always flat-rate; and it can be paid in and out of work.
This complexity does not help the ‘Making Work Pay’ agenda…
PROPORTION RECEIVING HOUSING BENEFIT BY EMPLOYMENT STATUS AND
WHETHER ALSO ON A MAIN BENEFIT (PASSPORTED OR NOT): %:
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
70%
63%
60%
50%
40%
30%
21%
20%
16%
10%
0%
Out of Work: On Main Benefit
Out of Work: Not on Main Benefit
In Work:Not on Main Benefit
…and with a supplement to the main benefit rate of usually around
£50-£125 p. w. it is generally people in receipt of housing benefit that
need income supplements in the form of tax credits whilst in work.
HOUSING BENEFIT BY MAIN PASSPORTING BENEFIT AND SIZE OF AWARD: %:
SOURCE: DWP HOUSING BENEFITS.
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
IN RECEIPT OF:
JSA
LONE PARENT & OTHER IS BENEFITS
ESA
PENSION CREDIT
TOTAL
STRUCTURE OF EMPLOYMENT
• The UK’s ‘light and even’ employment regulation system sets
universal basic minimum standards to prevent exploitation whilst
allowing workers and employers the freedom to set the terms &
conditions that suit them both.
• This delivers a system which is both dynamic – there is a lot of
voluntary turnover – and diverse – there are a very wide range of
types and patterns of employment.
• The system has helped to deliver both a high employment rate and
also high for all age and sex groups…
• …and levels of satisfaction with all forms and types of work in the
UK tends to be higher than in most other countries.
In terms of employment the UK’s ‘light and even’ employment regulation
regime enables workers to move in and out of work easily. Consequently,
there are always vacancies coming up as part of the high natural turnover
in the UK…
HIRING & SEPARATION RATES: OECD ESTIMATES:
Annual Average: 2000-2007
30
25
15
10
5
Hiring Rate
Separation Rate
Ic
e
en
D
Sp
an
C
S
U
Fi
n
K
U
Sv
k
Sl
v
C
ze
B
el
G
er
N
or
A
us
Po
r
Sw
i
Fr
a
Sw
e
Po
l
H
ol
Ire
It
0
G
re
H
un
Per Cent
20
…and, in general, workers tend to find a job that tends to suit
them. So, for example, the UK has relatively few workers who are
in forms of work that are generally not well regarded by the people
in them – here temporary work…
28
24
PER CENT
20
16
12
8
4
0
PERCENTAGE OF EMPLOYEES THAT ARE TEMPORARY:
2012:OECD ESTIMATES
In addition, as there are few legislative restrictions on types of work in
the UK it has a greater range in work patterns – for example, on hours.
This diversity means that when workers look for work they have more
opportunities to find a job that suits their personal circumstances…
Us ual Hour s Wor k e d
47
50
50
44
41
38
44
41
38
35
32
29
26
0.0%
20
0.0%
50
10.0%
47
10.0%
44
20.0%
41
20.0%
38
30.0%
35
30.0%
32
40.0%
29
40.0%
26
50.0%
23
Italy
50.0%
23
35
32
Us ual Hours Work e d
France
20
47
Us ual Hours Work e d
29
20
0.0%
50
0.0%
47
10.0%
44
10.0%
41
20.0%
38
20.0%
35
30.0%
32
30.0%
29
40.0%
26
40.0%
23
50.0%
20
50.0%
26
Ge r m any
23
UK
Us ual Hours Work e d
This wider range of opportunities provided by the UK’s ‘light and
even’ employment regulation system has helped to deliver not only a
high overall employment rate but also generally higher rates for all
age and sex groups (except the oldest)…
EMPLOYMENT RATES BY AGE AND SEX: 2012: OECD ESTIMATES
100
90
80
PER CENT
70
60
50
40
30
20
10
0
UK
OECD AVERAGE
…but also UK workers tend to be more satisfied with their
circumstances. For example, the proportion of involuntary parttimers is low internationally suggesting that workers are more likely
to find a type of job that suits both them and their employer...
70
60
PER CENT
50
40
30
20
10
0
SHARE OF INVOLUNTARY PART-TIMERS AS % OF ALL EMPLOYEES:
2012:OECD ESTIMATES
EMPLOYMENT PERFORMANCE DURING
AND SINCE THE RECESSION.
• The UK’s ‘light and even’ employment regulation has also helped the
UK to show resilience during and since the recession.
• Employment levels are already above pre-recessionary levels
despite GDP not having reached its previous peak…
• …and this is not because of labour hoarding. Average hours worked
are as high as they were when employment peaked in early 2008.
• In fact, for adults, employment has grown even faster than
population. The employment rates for age groups 25-64 and 65 &
over are already above the pre-recessionary levels of 2008…
• …whilst for young people aged under 25 leaving education there
remains a major problem making the transition into work or further/
higher education…
• …whilst, for youngsters who have made the transition,
worklessness is already close to pre-recessionary levels.
Employment is above its pre-recessionary peak. And as total hours
have growth even faster there is, therefore, little sign of labour
hoarding due to involuntary part time working. Average hours are
now at or above 2008 levels…
EMPLOYMENT, TOTAL & AVERAGE ACTUAL HOURS WORKED:
INDEX: APRIL 2008 =100: SOURCE LFS: SEASONALLY ADJUSTED
106
INDEX: APRIL 2008 = 100
104
102
100
98
96
94
MONTH IS MID MONTH OF THE QUARTER
EMPLOYMENT
TOTAL ACTUAL HOURS WORKED
AVERAGE ACTUAL HOURS WORKED
The UK’s ‘light and even’ employment regulation has also helped the
UK to show resilience during and since the recession. Those aged
25-64 and 65 & over are already above pre-recessionary levels…
[But as there has been a population shift towards those aged 65 & over the overall
employment rate for all aged 25 & over are not quite above pre-recessionary levels.]
EMPLOYMENT RATES: AGES 25-64 & 65 & OVER:
SOURCE LFS: SEASONALLY ADJUSTED
12
78
10
76
8
74
6
72
4
70
2
68
0
Aged 25-64 Years [LHS]
Aged 65 & Over [RHS]
Per Cent
Per Cent
80
The recession stimulated more young people to stay in education and
the higher staying on rates have been maintained since. This tends to
reduce the overall employment rate because the employment rate for
people in full time education are lower than for those who do not.
PROPORTION OF UK POPULATION IN FULL TIME EDUCATION:
16-24 YEARS: LFS SEASONALLY ADJUSTED
44
42
40
PER CENT
38
36
34
32
30
28
26
24
However, a major problem remains for young people leaving education.
They are taking longer when they leave education to either move into
further/higher education or to move into work. Their experience differs
from that of young people who have successfully entered the labour
market – and had a job. Amongst this group the numbers are already
close to pre-recessionary lows.
WORKLESS UNDER 25 NON-STUDENTS: BY WHETHER HAD PAID JOB OR NOT:
SOURCE LFS: AGE 16-24 EXCLUDING THOSE IN FULL-TIME EDUCATION: 4 QUARTER AVERAGE: BIS ESTIMATES
1,000
THOUSANDS
800
600
400
200
0
HAD A JOB (Inc. Missing Values)
NEVER HAD A JOB (Inc. Missing Values)
REASONS FOR THE UK’S GOOD EMPLOYMENT
PERFORMANCE: DEMAND OR SUPPLY?
• Increased hiring is the main cause of the UK’s good employment
performance as workers have taken up ‘Second Choice’ jobs rather
than remain unemployed.
• During the recession the fall in labour demand led to both
involuntary job losses and some short time working. However, the
scale of the job losses was much greater than the hours reduction.
• As demand has picked up both of these aspects – job losses and
short-time working - have improved and are now moving towards
pre-recessionary levels.
• However, there has also been a substantial rise in ‘Second Choice’
jobs - part timers who would prefer to work full-time and self
employed.
Involuntary job losses rather than hours reductions was the main
response to the fall in labour demand during the recession. However,
subsequently, redundancies and other involuntary separations have
fallen back and total separations are now at pre-recessionary levels…
JOB SEPARATIONS: ANNUAL FLOWS OUT OF EMPLOYMENT:
4.4
AGE 16-64: LFS EXPERIMENTAL SERIES: N.S.A.
4.0
3.6
MILLIONS
3.2
2.8
2.4
2.0
1.6
1.2
To ILO Unemployment
To Economic Inactivity
All Outflows
…and although there was some rise in short-time working/lay-offs
during the recession it was small relative to the fall in employment.
Since 2010, the hours reductions due to economic reasons has
been falling back towards pre-recessionary levels.
NUMBER WORKING LESS THAN USUAL HOURS AS:
ON SHORT TIME OR LAID OFF FOR ECONOMIC REASONS:
LFS: 4 QUARTER AVERAGE
300
1.2%
1.0%
200
0.8%
150
0.6%
100
0.4%
50
0.2%
0
0.0%
THOUSANDS
250
Total [LHS]
Working Less than Usual as Short-Time [LHS]
Worked Zero Hours as Laid Off [LHS]
Total as % of All Employment [RHS]
The fall in labour demand in the recession is replicated by the fall in
the numbers who remained in their job. Again, since 2010 the numbers
staying in work have picked up and they are also now above prerecessionary levels…
REMAINED IN EMPLOYMENT FROM PREVIOUS QUARTER:
29
Millions
28
27
26
25
24
LFS FLOWS: AGED 16-64: N.S.A.: EXPERIMENTAL SERIES
…and the type of jobs that fell during the recession - both (voluntary)
part time workers and, particularly, full-time employees - are those
most associated with falls in labour demand. Although there has been
strong growth recently, the job losses have not been recouped.
EMPLOYMENT CHANGE SINCE APRIL 2008: 'DEMAND TYPE' JOBS' LFS
200
0
THOUSANDS
-200
-400
-600
-800
-1,000
-1,200
SUM OF 'DEMAND TYPE' JOBS
FT EMPLOYEES
PT WORKERS WHO DIDN'T WANT FT
A rise in hiring is the main reason for the recent good employment
performance. This rise was concentrated amongst people moving
from ILO unemployment into a job. As this was during a period of
low/no growth it suggests a supply rather than a demand effect…
HIRINGS: ANNUAL FLOWS INTO EMPLOYMENT:
4.4
AGE 16-64: LFS EXPERIMENTAL SERIES: N.S.A.
4.0
3.6
MILLIONS
3.2
2.8
2.4
2.0
1.6
1.2
From ILO Unemployment
From Economic Inactivity
All Inflows
…but the recession seems to have increased the number of
workers willing to take up ‘Second Choice’ vacancies rather than
remain unemployed. It seems to have largely been their choice
rather than having been imposed on them by their businesses…
1,800
EMPLOYMENT CHANGE SINCE APRIL 2008: SUPPLY-SIDE
'SECOND CHOICE' JOBS: LFS
1,600
1,400
1,200
THOUSANDS
1,000
800
600
400
200
0
-200
Sum of 'Second Choice' Jobs
PT Workers who Want to Work FT
Second Jobs
Self Employed
…and some of the growth in the numbers of part-timers who
would like to work full-time has been amongst people who are
part-time self employed workers . Some of this may be because
they took up these jobs as they were unable to get a job as a full
time employee
PART-TIMERS WHO WOULD LIKE TO WORK FULL TIME:
BY SELF EMPLOYMENT AND EMPLOYEE STATUS: CHANGE SINCE Q2 2008
SOURCE LFS: NOT SEASONALLY ADJUSTED
700
600
Thousands
500
400
300
200
100
0
Q2 2008
Q2 2009
Q2 2010
Employee
Q2 2011
Self-Employed
Q2 2012
Q2 2013
INTERACTION BETWEEN BENEFIT SYSTEM AND PEOPLE
WORKING SHORT HOURS OR WORKING PART-TIME
WHEN THEY WISH TO WORK FULL-TIME.
• The employment growth amongst part time workers who wanted
to work full time has mostly been amongst workers working 16
hours or more – ensuring a minimum weekly wage of around £100
p. w. .
• This together with the growth in self-employment and, more
recently, full-time employees, may generally mean that most
people are better off in work than on benefits.
• However, this is not the same as saying that they regard their
current work and the resulting income as satisfactory.
Fewer than 10% of employment usually work less than 16 hours per
week. At minimum wage rates 16 hours or more ensures a minimum
of around £100 p.w. – which is higher than benefit payments to more
than 70% of benefit recipients on the main rates of benefits…
NUMBERS IN EMPLOYMENT BY USUAL HOURS:
60
OCTOBER TO DECEMBER 2013: SOURCE: LFS: SEASONALLY ADJUSTED
50
PER CENT
40
30
52.0
20
10
19.9
19.8
6.7
0
1.6
Under 6 Hours
6-15 Hours
16-30 Hours
31-45 Hours
Over 45 Hours
…and not only is the growth in employment over more than two
decades has been amongst workers who usually work more than
16 hours per week…
EMPLOYMENT BY USUAL HOURS: CHANGE SINCE APRIL 1992:
SOURCE: LFS: SEASONALLY ADJUSTED
3,000
2,500
THOUSANDS
2,000
1,500
1,000
500
0
-500
-1,000
MONTH IS MID MONTH OF THE QUARTER
0-6 HOURS
6-15 HOURS
16-30 HOURS
31-45 HOURS
OVER 45 HOURS
…and the growth in the numbers of part-timers who would prefer
to work full-time since the recession has been amongst workers
who usually work at least 16 hours per week…
PART TIME WORKERS WHO WOULD PREFER TO WORK FULL TIME:
BY USUAL HOURS WORKED: CHANGE SINCE Q2 2008:
SOURCE LFS: NOT SEASONALLY ADJUSTED
600
500
Thousands
400
300
200
100
0
-100
Q2 2008
Q2 2009
Q2 2010
Unknown
Q2 2011
Less than 16
16 - 30
Q2 2012
Over 30
Q2 2013
…and part time workers who want more work generally want a lot
more work. This suggests that the issue is not the interaction with
the benefit system that is of most importance but raising their
income significantly.
PART TIMERS WHO WOULD LIKE TO WORK FULL TIME:
BY JOBSEARCH AND WORK PREFERENCES:
SOURCE LFS: NOT SEASONALLY ADJUSTED
1,600
1,400
Missing
THOUSANDS
1,200
Would not like more hours in
current job
1,000
Would like more hours in current
job
800
Looking for an additional job
600
Looking for replacement job, no
preference for more hours
Looking for replacement (different)
job, would prefer more hours
400
Looking for different job with more
hours
200
0
Q1 2008
Q1 2013
Q4 2013
INTERACTION BETWEEN BENEFIT SYSTEM AND
PEOPLE WORKING VARIABLE HOURS
– INCLUDING ZERO HOURS CONTRACTS.
• Variable hours of work – if they lead to variable income – can cause
issues when they interact with the benefit system. Workers with
variable hours include those on zero hours contracts but are not
exclusive to this form of contract.
•
Zero hours contracts and other forms of variable hours contracts
are more likely to provide opportunities to workers who are
probably not on benefits – students and 3rd or 4th earners in a
household…
• …however, there are also likely to be more problems with zero
hours and other variable hours contracts. More of them would
prefer to work longer and more are actively looking. But not many
more of them actually have a second job.
In terms of zero hours contracts it is the variability of the hours
(and pay) on offer which is important rather than the precise nature
of the contracts themselves. For example, ONS have indicated that
the apparent doubling of such contracts in the last year is due, at
least in part to publicity raising awareness of this type of contract…
NUMBER OF ZERO HOURS CONTRACTS:
700
SOURCE: LFS: OCTOBER TO DECEMBER: NOT SEASONALLY ADJUSTED
600
THOUSANDS
500
400
300
200
100
0
2013 ONS ESTIMATE
ONS: 2000 TO 2012
BIS ESTIMATE 1997-1998
…and it is very rare that people on zero hours contracts have
usual hours that are zero.
ZERO HOURS CONTRACTS: BY EMPLOYEES WHOSE USUAL HOURS ARE ZERO:
SOURCE: LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
700
600
583
542
THOUSANDS
500
400
300
200
100
8
0
Total
of which Employees
of which number usually
working zero hours
In addition, it is not just zero hours contracts where actual hours
worked differ from usual hours. However, workers on zero hours
are more likely to work fewer actual hours than usual hours…
DIFFERENCE BETWEEN ACTUAL AND USUAL HOURS: BY ZERO HOUR CONTRACT: %
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
60%
50%
40%
30%
20%
10%
0%
10+ hrs
fewer
5-9 hours 3-4 hours 1-2 hours
fewer
fewer
fewer
Same as 1-2 hours 3-4 hours 5-9 hours
usual
more
more
more
ZERO HOURS CONTRACTS
10+ hrs
more
NON-ZERO HOURS CONTRACTS
Unknown
…and workers on zero hours contracts are more likely to work
zero hours and fewer than 15 hours per week. ..
WEEKLY HOURS ACTUALLY WORKED BY ZERO HOURS CONTRACT: %
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
40%
35%
30%
25%
20%
15%
10%
5%
0%
No hours
1-4 hrs
5-9 hrs
10-14 hrs
ZERO HOURS CONTRACTS
15-19 hrs
20-29 hrs
30-39 hrs
NON-ZERO HOURS CONTRACTS
40-49 hrs
…but, because zero hours contracts are a very small part of
overall employment zero hours/short hours are much more
prevalent amongst workers who are not on zero hours contracts
than amongst workers who are…
WEEKLY HOURS ACTUALLY WORKED BY ZERO HOURS CONTRACT: 000s
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
3,000
2,500
THOUSANDS
2,000
1,500
1,000
500
0
No hours
1-4 hrs
ZERO HOURS CONTRACTS
5-9 hrs
NON-ZERO HOURS CONTRACTS
10-14 hrs
In the labour market as a whole the numbers working less than usual hours
because employers vary their hours have fallen over time. However, within
this total, there has been a growth of around 100-150 thousand in the number
working zero hours.
NUMBER WORKING LESS THAN USUAL HOURS DUE TO: VARIABLE HOURS:
4.6
400
4.5
350
4.4
300
4.3
250
4.2
200
4.1
150
4.0
100
3.9
50
3.8
0
Total [LHS]
Worked Less than Usual Hours [LHS]
Worked Zero Hours [RHS]
THOUSANDS
MILLIONS
LFS: 4 QUARTER AVERAGE
Variable hours contracts – including zero hours contracts – can provide
opportunities for workers who are unlikely to be on benefits. For example, a
quarter of zero hours contracts are taken up by students compared to less
than 10% of workers not on zero hours contracts…
PROPORTION IN EDUCATION BY ZERO HOUR CONTRACT STATUS:
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
100%
0%
0%
90%
80%
70%
60%
75%
92%
50%
40%
30%
20%
7%
10%
18%
5%
3%
0%
ZERO HOURS CONTRACTS
In Full-Time Education
In Part-Time Education
NON-ZERO HOURS CONTRACTS
Not in education
Unknown
…also, people on zero hours contracts are also slightly more
likely to be in households where two or more other people are
working - households which are unlikely to be on benefits.
NUMBER OF OTHER WORKERS IN HOUSEHOLD BY ZERO HOUR CONTRACT STATUS: %:
SOURCE LFS: OCTOBER TO DECEMBER 2012: NOT SEASONALLY ADJUSTED:
[NOTE FIGURES RELATE TO 2012 AS 2013 NOT YET AVAILABLE]
100%
90%
22%
27%
80%
70%
60%
50%
53%
46%
40%
30%
20%
10%
27%
26%
0%
ZERO HOURS CONTRACTS
Only worker
One other
NON-ZERO HOURS CONTRACTS
2+ others
However, there are also more signs of potential problems in zero
hours contracts. There are more likely to want to work or need more
hours - 37% compared to 13% - including 16% who are actively
looking…
NEED MORE WORK AND JOBSEARCH BY ZERO HOURS CONTRACT STATUS: %:
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
100%
90%
86%
80%
70%
62%
60%
50%
40%
30%
21%
20%
10%
10%
10%
6%
2%
2%
1%
2%
0%
ZERO HOURS CONTRACTS
Need More Hours & Looking
Prefer More Hours & Looking
Don't Need More Hours
Unknown
NON-ZERO HOURS CONTRACTS
Prefer More Hours but Not Looking
…and 13% of the ZHC contracts with zero hours report in the LFS
that they are temporarily away from work [the category we think is
the most likely to contain any exploitation.]
PROPORTION OF WORKERS WHO ARE TEMPORARILY AWAY FROM WORK
BY ZERO HOURS CONTRACTS: %:
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
100%
90%
80%
70%
60%
87%
92%
50%
40%
30%
20%
10%
13%
8%
0%
ZERO HOURS CONTRACTS
Temporarily Away
NON-ZERO HOURS CONTRACTS
Other
…and not many people on zero hours contracts have succeeded
in getting a second job – although it is greater than other workers.
We do not, however, know whether this is due to restrictions
associated with exclusivity contracts.
PROPORTION WITH SECOND JOBS: BY ZERO HOURS CONTRACT STATUS:
SOURCE LFS: OCTOBER TO DECEMBER 2013: NOT SEASONALLY ADJUSTED
100%
0%
1%
90%
80%
70%
60%
50%
94%
96%
6%
4%
ZERO HOURS CONTRACTS
NON-ZERO HOURS CONTRACTS
40%
30%
20%
10%
0%
Second job
No second job
Unknown
CONCLUSIONS
• The UK’s labour market system of benefits, employment regulation
and National Minimum Wage are all structured around providing
universal basic minimum standards.
• And this combined with a long standing traditions of allowing
workers and employers to determine their own terms & conditions
is currently delivering a system where the majority of people are
better off in work than on benefits; employment overall and for all
age groups is high by international standards; and the employment
record during and since the recession has been good.
• However, there is still more to do. Including:– Helping young people make the transition from education to work more
easily and quickly; and
– there are a significant number who would prefer to work more hours
both amongst those who usually work more than 16 hours a week –
who have taken up a ‘Second Choice’ job rather than stay unemployed;
– and amongst workers whose variable hours – including zero hours
contracts – mean that their hours are low or they are not working.