New data published this week by Eurostat, the statistical office of the EU, has placed the UK in 23rd place out of 28 for its record on underemployment.
The figures, which show that the UK underemployment rate was 31 percent higher than the EU average in 2014, are a sign of the government’s failure to create the decent jobs people need, according to the Trades Union Congress (TUC).
TUC General Secretary Frances O’Grady said:
“These figures show what a bad time British people are having at work compared with their European neighbours. We have a fragile recovery built on pumped-up house prices, instead of the strong foundation of good quality jobs with decent hours and wages. The current approach just isn’t delivering enough high quality jobs to meet demand and it’s leaving too many families struggling to get by on scraps of work.”
The TUC believes that the Eurostat data reinforces the findings of its own analysis, also published this week, on short-hours contracts. The analysis found 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.
Zero-hours contracts ‘just the tip of the iceberg’
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 (72 percent) of underemployed employees on short-hours contracts.
Retail is the worst affected sector. Nearly a third (29 percent) of underemployed short-hour workers are employed in supermarkets, shops, warehouses and garages – nearly 250,000 people. Education (16 percent), accommodation and food services (14 percent) and health and social care (12 percent) also account for large shares.
Productivity and the UK economy suffers
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 percent) 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 percent since 2008/09.