The number of workers on “zero-hour” contracts has reached one million. This is an indicator of the real crisis in Britain. Not one of these zero-hour contract workers contribute to the official unemployed figures. Yet for countless workers trying to make ends meet, zero-hour contracts can mean little to no employment from week to week; total flexibility in when and for how long you work; as well as the constant threat of instant dismissal. Darrall Cozens of the UCU and Coventry TUC comments on the latest startling statistics.
An increasing number of workers in Britain are being employed on contracts with zero hours where the only thing that is guaranteed is complete flexibility of labour for the employers. As each day passes the numbers grow. On August 1st the Office for National Statistics (ONS) said that their figures were wrong, and that they now stood at 250,000, the highest for eight years. Yet back in June the Care Minister, Norman Lamb, told the House of Commons that more than 300,000 worked in the care sector alone. On August 5th, the number reached ONE MILLION, and as time passes it will grow as more evidence is unearthed. This is between 3-4% of the workforce.
As usual the bosses claim that workers like the arrangements as they fit in with the increasingly hectic lifestyles of mainly young people. Yet the reality is workers are increasingly at the beck and call of employers at all times of the day and night. They are “owned” by the bosses even when they are not at work. Your working life and your “free” time is controlled by your boss. The only ones to therefore “benefit” are the bosses. They know that they cannot have workers on “stand-by time” or “on call-time” or “downtime” while they are on work premises as under these circumstances, according to ACAS, they have to be paid at least the minimum wage. It is illegal to “clock off” staff during quiet periods where they are required to be on the premises, according to National Minimum Wage Regulations.
So zero-hour contracts mean that workers can be expected to wait by the phone each and every day and can be summoned at a moment’s notice to turn up for work. And while they wait with no work and therefore no wages, they cannot sign on as they are employed and they cannot work for another employer without permission despite the fact that their existing employer does not guarantee any working hours and therefore any wages. For workers it is a classic Catch-22 situation. They sign a contract where they “agree” to be available for work where and when required, yet they have no guarantee of hours or times. Even worse, according to anecdotal evidence in the media, it has been revealed that workers who refuse to accept these contracts have lost their benefits.
For individual employers these contracts are a boon! They can avoid any obligation under employment laws, except the “duty of care” while workers are on site. They can even avoid offering sick pay or holiday pay. In other words the only costs are for hours worked! And this has suited some well-known names. The favoured place for cheap beer, Wetherspoons, has 80% of its workforce, some 24,000, on these contracts. Macdonalds employs 90% of its workforce on such contracts - 83,000 workers. Cheap sportswear from Sports Direct comes at the price of 20,000 of its 24,000 staff on zero hours. Part time summer workers at Buckingham Palace, workers at the cinema chain Cineworld and the catering service workers at the Tate Gallery are also included. And let’s not forget Boots and minimum wage staff at Lancashire Cricket Club.
There is even a new word borrowed from Spanish to label workers on precarious contracts – the Precariat - a growing number of the proletariat working with contracts that guarantee only uncertainty. From a workers point of view nothing can be planned. For 24/7 and 365 days a year you are at the disposal of your boss. We are back to the days of “the Call” on the docks! You can’t plan an evening out, a visit to the school to see your kids, a holiday! And getting married, buying a house, even being able to pay rent, cannot be guaranteed.
And here is the stupidity from the point of view of the capitalist class as a whole. For individual bosses labour costs are cut, but in doing so you cut the market for goods and services and increase consumer uncertainty. And one thing is clear! Workers will buy and get into debt if and when they know that the future offers some hope of being able to pay back debt. So while individual bosses profit enormously from zero hour contracts, it undermines the functioning of the system as a whole
Yet for the past 30 years this has been the nature of British capitalism. There has been a vast shift in wealth and power to the bosses at the cost of the working class and organised labour. We have witnessed two interrelated trends affecting workers in Britain. The first has been the erosion of trade union rights to make it more difficult to resist employer attacks on jobs, wages, terms and conditions. This situation has recently worsened with newly-introduced changes that will require workers to be in a job for two years before they will get protection from unfair dismissal and, in addition, that workers who decide to go to an Industrial Tribunal to get recompense for unfair dismissal will now have to find £1,200 up front to pursue the case.
The second trend has been the gradual shift in the amount of money that labour receives from work. The TUC produced figures in 2010 that showed that in 1979 some 65% of the GDP went in wages and 13% in profits. By 2010 the figures were 53% to wages and 21% to profits. Earlier this year The Guardian reported (13/02/2013) that “from 1994-95 to 2009-10 the top 1% of earners accounted for (the) 15% of the growth in income from employment and investments, while the bottom 50% accounted for another 15%”. So the growth in income of the top 1% was the same as the bottom 50%!
Zero-hour contracts compound this situation. Labour costs are cut and an increasingly smaller slice of the national cake, the GDP, goes to wages. Yet goods and services continue to be put on the market for consumers to buy. But if you are paid a smaller amount for what you produce, you cannot buy back what is produced, so the market is cut. This is a cause of overproduction, leading to cutbacks, sackings, further cuts in wages and an increase in precarious contracts. For capitalism as a whole this is lunacy, yet it is the logic of a system that relies on extracting surplus value, that is unpaid labour, from the working class. Periodic crises of overproduction are therefore part and parcel of capitalism.
Ban zero-hour contracts
The growth of zero-hour contracts has led some in the labour movement to call for their abolition. On the Andrew Marr show back on April 28th, Andy Burnham, Labour shadow health secretary, said that Labour should pledge to ban "zero-hour contracts" at the next election. A fine and correct call! But who will do it and how will it be done? Will they be made illegal? If they are, who will enforce the law? With the massive cut in factory inspectors the laws on health and safety cannot even be enforced, as firms face an inspection only every 36 years!
Burnham was responding to pledges made the day before, on April 27th in the Guardian, by Ed Miliband. He wanted workers to be paid the living wage of £8.55 per hour in London and £7.45 elsewhere. It had been calculated by the Resolution Foundation that if all those who were now earning the minimum wage were to be paid the living wage, there would be some £2.2bn in net savings to the public sector including an increase in income tax and higher National Insurance benefits.
But how does Ed Miliband envisage bosses paying the living wage, especially at a time when more and more are using zero-hour contracts to cut labour costs? The answer is bribery using taxpayers’ money! Tax breaks are being offered. There will be tax relief on training or capital investment and councils will be encouraged to offer lower business rates for a temporary period. So Labour’s answer to low wages is to get them subsidised by the taxpayers, in other words - other workers. This would still leave the employers with their profit levels, the surplus value they have creamed off from their workers, untouched. Peter the worker is robbed to pay Paul the worker. And this is the alternative policy offered to the electorate by Labour in the run up to the 2015 election.
Capitalism in crisis or even without a crisis can only guarantee to workers one thing – more and more of the wealth that workers create will be creamed off by the capitalists to use for their own benefit. And this whole process produces periodic crises. Yet workers, as human beings, need security and income to be able to at least plan some kind of semi-decent existence – a home, a family, a holiday, access to leisure and education, being looked after in our old age. Zero-hour contracts, an expression of the bankruptcy of capitalism in its senile decline, offer workers only uncertainty and insecurity.
How many more reasons do we need to fight to get rid of capitalism? The labour movement must launch a campaign to end zero-hour contracts and in doing so win working class people to the idea of the need to change society as the only way to guarantee any kind of decent life in the future.