Thursday, 8 August 2013

Zero hours contracts

From the Evening Standard:

It is also clear that such contracts can come with problems.

The Chartered Institute of Personnel and Development suggested yesterday that about a third of employees on these contracts would like more hours. Some 14 per cent felt the hours they were offered were often insufficient for them to achieve a basic standard of living. With the cost of living rising, this is a real concern that government should be looking to tackle.

I don't get these zero-hours contracts.

[The tax and welfare systems interact to generate a huge amount of unemployment, and not just obvious effect that taxes on output and employment reduce output employment, the absence of taxes on the rental value of land do it just as much.

Then add on all the employment regulations like holiday pay and redundancy and maternity rights, and you can understand why the less ethical employer who does not require a highly skilled workforce prefers to use occasional or agency workers who are never there long enough to accrue holiday pay etc.

This sort of paternalist stuff is best provided through the welfare system, i.e. a citizen's income - if maternity pay/rights is funded by all businesses equally, regardless of whether they employ younger women or not, then there is no disincentive to employing younger women etc. But let's put that to one side].

So I'm running a shop, let's call it Sports Direct, for sake of argument, it's open seven days a week, ten hours a day and I know that I need ten people in the shop at any one time (less during the week, more at weekends, go with me on this). That's 700 working hours for which I need people and for which I have to pay people.

I could employ 20 people working 35 hours a week each, or 35 people at 20 hours a week each, or some combination. And yes, some people will call in sick or won't be able to make their shift, so I'll have to ask people whether they can do a few extra hours, or I'll have to ring round and see if somebody is willing to come in on their day off etc. And then there are holiday rotas, leavers and joiners, it's all management faff for which I am being paid.

Not to mention that it is then a f-ing nightmare for people on benefits and Working Tax Credits having to re-submit their claims every month depending on how many hours they were paid for.

Why is it better for me, as the manager of that shop, to have fifty people on zero-hours contracts whom I ring up at random when they are least expecting it and when it might be inconvenient? Why is it not better to have a smaller workforce with their own pre-agreed shifts - the mums work short hours during school time; the students work at the weekend and during school holidays; the regulars are there full-time; some people are happy to work evenings for a bit of extra pay and so on?

Or is this the less ethical employers on one side with the government fudging the unemployment statistics on the other? Because if I have fifty people on zero-hours contracts, the government can technically count that as fifty people in work, but if I have thirty people on fixed shifts of twenty or thirty hours each, that's twenty more people the government has to admit have been put out of work?

The final insult is that then the government is slagging off all those fifty people for not working longer hours ("lazy, feckless" etc) instead of thinking more seriously about the tax and welfare systems generally. Or indeed slagging me off for not giving each of my fifty zero-hours people a full-time job (which I clearly cannot possibly do, or else I'd be paying thirty people just to stand around).

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