Today’s news that the Vauxhall car factory in Ellesmere is to be saved from closure will be a huge relief to the 2,000 or so workers whose jobs were at risk. This coincides with some welcome improvements in yesterday’s employment growth figures. According to the ONS, unemployment is down by 45,000 and so too are the numbers claiming job seekers allowance. Experience tells us that it is unwise to think that the darkest days of the economic slump are behind us, but surely isn’t this cause for some optimism?
For the economy maybe, but not necessarily for workers. A closer look at the figures reveals three or four key shifts we should probably be concerned with. The first is that the number of people out of work for more than a year rose by something like 3 per cent to nearly 900,000. A recent New York Times article lists a number of research reports which highlight the kind of ‘scarring’ effects that such long-term unemployment can cause. The title of one Pew Research Center article says it all: “Lost income, Lost friends – and Loss of Self Respect.” In a sort of self-perpetuating downward spiral, these problems in turn decrease the likelihood of finding a job.
The second trend to be wary of is the rising number of part-time workers. While some people choose to work fewer hours for reasons such as childcare issues or the desire for more leisure time, there are many others who would much prefer to work full-time. The ONS figures from yesterday show that the number of people working part-time because they could not find a full-time job reached a record-breaking 1.5 million, up by 73,000 in a quarter. The key problem with this shift to part-time employment is that it can have repercussions for people’s benefit entitlements. The recent changes to Working Tax Credits mean that people now have to work 24 hours in a week rather than 16 to qualify for benefits. The result is that if you are a part-time worker who cannot secure the minimum 24 hours you could lose up to £3,900 a year.
This brings me to the third, already well-established, shift of declining levels of growth in wages. ONS figures reveal that total pay (including bonuses) climbed by only 0.6 per cent over the past year. Given that annual inflation is currently at around 3.5 per cent, a crude calculation would make this a real wage decrease of a notable 2.9 per cent.
The fourth shift, albeit I believe not one documented in the ONS data sets, is the growth of ‘zero-hour contracts’. Typically seen in low-paid and low-skilled work, these are full-time contracts but ones which do not commit the employer to provide any working hours to the employee. The idea is that employers can fluctuate the hours of workers subject to their need. Although not ideal for the employee, in theory it should help to create more flexibility for employers and in turn increase the likelihood of them taking on more staff (since they’re not afraid of being stuck with workers should there be a serious downturn). The problem is that these contracts are reportedly being abused by many companies, leaving workers with no security and the added trouble of continually trying to re-establish their benefits when their working hours fall away. The fact that these individuals still theoretically have a contract makes claiming all the more difficult.
The following interview extract from Stephen Armstrong’s The Road to Wigan Pier Revisited gives us a sense of how those at the bottom of the pyramid are struggling to cope with the upheaval this causes:
Robin Tenant works at Argos, in Warrington. “They gave me a four-hour contract – it only guarantees four hours of work a week,” he explains. “Now for some people it suits them absolutely fine, do you know? Four hours work a week if you were a pensioner trying to top up your pension or you’re just starting going back to work is fine. But we are a family and both me and my partner have a four-hour contract with one store and so we have eight hours work between us for a week. We’re employed, so we don’t have… so unemployment benefit becomes a complete nightmare because we technically have contracts and we have thirty-six hours work one week and then four and it means that as soon as something happens – like the week before Christmas last year the snow happened – we’re stuffed.
All of the above four shifts illustrate how far we have yet to go in creating not just more, but better jobs. Not every job or working contract is a good one, so why is it that we breathe a collective sigh of relief when employment figures go up? Moreover, why do we rail at the unemployed for their lack of effort in finding employment and yet do very little for those who eventually do find scraps of work?
What is perhaps needed is a more critical analysis and honest debate about what a good job or contract really looks like. This means looking seriously at models like ‘Flexicurity’ championed by Will Hutton, and learning from the likes of Germany where trade unions, employers and workers club together to reach an agreement on working patterns which suits all parties. Conversely, what we don’t want is a fixation on job numbers alone or indeed a political class that seeks to stifle the debate by using terms such as "job snobs" to dismiss those who raise the subject.