First up, even the bien pensant metropolitan liberal elite must accept that there’s a demand for low-skilled, low-wage jobs. And I assume we’d rather have these low-paid, low wage jobs employing people here in the UK than for them to move elsewhere and for domestic unemployment to rise as a result.
Second, I believe there’s a social good to them. Temporary agency work, in the form of zero hours contracts, can offer a stepping stone into employment for the long-term unemployed. The stepping stone effect, a gradual re-entry into the labour market through temporary work, is shown to bring outsiders into permanent employment by providing the unemployed with opportunities to gain work experience, acquire human capital, and enlarge their social network. The effect has been found in countries such as Germany, Belgium, and the Netherlands. Temporary work includes increasingly more agency work, and evidence shows that recruitment agencies offering temporary work are more effective in getting the unemployed back to work than public agencies.
Third, and this is the thing that a lot of people seem to have forgotten, is that some people like flexible contracts. The United Kingdom – indeed the whole continent – is suffering from a huge skills shortage, the consequence of our aging population. As those of working age (15-64) become a smaller proportion of the total population, a lower supply of labour will be forced to meet an unchanged – or increasing – demand. That will lead to a shortage of labour – an employment gap.
By 2050, research suggests an employment gap of around 15% of total labour demand. As much of a fan of immigration as I am, immigration alone cannot plug this gap. Short of stimulating population growth or dramatically raising the retirement age – something that isn’t politically tenable – the best way to close the gap is to increase participation in the labour force. To do that, the United Kingdom needs a dynamic, efficient labour market that reflects the changing demands of different people over the course of their lives.
In a modern economy, in which both men and women want to combine family life and work part-time work, fixed-term contracts, and temporary agency work are a key requisite for high participation in the labour force. In the last ten years, for instance, part-time work has been the most important driver of participation, especially for women. Scandinavian and Anglo-Saxon countries have many voluntary temp-workers; higher participation in the labour force in these countries is connected to the availability of temporary jobs. In short, lots of people choose temporary, flexible contracts and that makes them very important to the economy.
For these reasons, it is madness to attack the concept of flexible contracts like these. It’s meddling with jobs that many workers value and require, with a labour force that actually delivers what the country needs, and with a workforce that suits employers.
Banning zero-hour contracts will give UK businesses less flexibility – not more.
The country, employers, and employees all need a labour market fit for the 21st century – not amake believe labour market more in tune with a fantasy vision from the seventies than the present day.
