It's Friday. It's financial. It's Friday Financial with JULIAN SAYER.
Any
healthy economy needs a full and skilled workforce. It benefits employers and
more importantly, gives a lot of spending power to a service driven economy.
Five
years of austerity and we owe roughly £69,000,000,000 more than we
did, while the
average income fell from £24,100 to £23,200, a percentage drop of 3.8%! In the meantime we are
being told the economy is recovering and unemployment is coming down. This is
true, unemployment has been reduced from its peak of 2.7 million in 2011 (2008-2014)
to today's figure of 2.33 million. I could argue about how these figures have
been compiled, but in today's article I want highlight the effects of these
changes in our economy and then discuss future trends.
New
figures from the Office for National Statistics reveal the depths of low pay
and the grotesque chasm between a rich one per cent and the other 99% of the
country.
Four in
five new jobs are in sectors averaging under £16,640
for a 40-hour week. Working full-time on the £6.31
hourly minimum wage would gross just £13,124 in a year, and an
explosion of part-time jobs shows millions of workers can’t even earn that pittance. This isn't good for a consumer
based economy. Remember, in the UK 78% of our entire GDP is service based, and
any fluctuations in our spending habits has huge ramifications.
Then
comes the issue of the kind of jobs that are being created? Part time and zero
hour contracts have ballooned since the start of this recession. The scale of
the use of zero-hours contracts has been revealed after official figures showed
that nearly 583,000 employees – more than double the
government's estimate – were forced to sign up to the
controversial conditions last year. Almost half of zero-hour contract workers
have had their shifts cancelled without any notice, according to the first
in-depth study of the way more than 1 million people on the controversial
contracts are treated.
Two out
of five workers on the contracts said they had been informed only hours before
starting work that a shift had been cancelled. A further 6% had been told as
their shift was about to begin. The study also found that 20% are sometimes or
always docked wages or penalised in some way if they are not available for
work. These contracts, which allow an employer to hire staff without an
obligation to provide any minimum working hours, are used widely in the care
industry, hotel and leisure sector and by many retailers. In the last two years
public sector organisations have transferred staff to zero-hour rotas.
