Zero-Hours Contracts Cover More Than 1M Uk Workers

[DTMark]

The joke is that you can't have a financial system based on debt if you have no credit worthy borrowers- and people without regular income will not qualify for most forms of debt.

So if this trend is allowed to spread widely throughout the economy the result will not be economic revival but stagnation as the borrowing that creates the money supply slows down for lack of people to lend money to.

Since about 97% of the money in circulation was created when someone took out a loan from a bank, and took on a debt- creating an increasing number of uncreditworthy zero contract employees is likely to lead to a shrinking money supply as debt is paid back but less is created.

So as fast as they try to inject new debt via 'Help to Buy' the rise of zero hours employment is culling the numbers of people who will qualify for a mortgage or any other form of borrowing.

I used to think that way. Then I realised that the government could simply keep on printing more and more money.

The old system was that the bank used to lend to people who were creditworthy who would pay back and they would make a profit.

Then, the banks lent to everyone because they knew the losses would be socialised and so "everyone" would pay it back.

Now with explicit bungs like "funding for lending" and "help to sell" the thin line between government and banking has been completely removed, they are one and the same.

So it is no longer important that the borrower can pay back - it's the new paradigm of where it is going. Student loans are an example - they are not meant to be repaid, they are meant to be sustained. No need to have silly constraints like "affordability" when all debt is socialised. Remove that and you can "max everyone out".

This would in time lead to the collapse of the currency, but as long as that's an election term or two away, who cares..

Both my kids have had zero hour contracts. The stuff of nightmares, it is essentially casual labour. They couldn't claim jsa because they were employed.. You can't be available to your employer and seeking work at the same time. They were explicitly not allowed to work for anyone else as that would leave them unavailable to their employer when needed.

Out of interest, why do people take zero hours contracts if they can get benefits - do they really pay more? Especially when you then lose all other "benefits" that benefits can bring.

The "you can't work for another employer" aspect - do the contracts actually say that? Is that legal? (One hopes not). Or it it just "implied"? Does this not force people on zero hours contracts into having several of them to get some near guarantee of an income?

Surely the thing that the employer stands to lose most is any semblance of loyalty. If you're on a zero hours contract you could presumably spend the rest of your time trying to find a proper contract and then tell the zero-hours one to "shove it"

My brother works in catering where it isn't unusual for "split shifts" to be the norm - two four hour shifts in one day, thing is, the low pay doesn't exactly incentivise reliability so the relationship is less employer > employee and more like a teacher trying to control a mob of unruly and uninterested children. Which does in the end filter through to the customer experience.

The expression "you pay peanuts and you get monkeys" isn't quite right here, rather "you get the loyalty you deserve".

You can only get someone in at ten minutes notice if they live ten minutes away. Yet I'd venture that some of the people who take these jobs are desperate for the money and might travel a little way. I can't see an employer in an affluent area having ready access to people available within ten minutes.

Which is why I refuse to work unpaid overtime or travel during non-working hours. I've got a bad attitude according to my boss. Scarily my fellow employees also seem to think I've got a bad attitude as well. They continue to put in several hours unpaid each week and proudly state that they just do what needs to be done to get the job done. It seemingly doesn't occur to them that the regular additional hours they put it demonstrate that extra staff are needed. These ******* are not only putting pressure on their colleagues to work for free but they are also doing someone else out of a job.

I left a job because of, among other things, the boss making subtle and not so subtle comments about "effort" when what he really meant was "hours". It just became tiresome in the end. At no point was overtime payment ventured, so at no time were additional hours offered.

[Tonkers]

Regardless of the rights and wrongs of this:

1. Does this mean there are really an additional ~1M who are basically unemployed? The relative lack of unemployment has been the surprising feature of this recession, so that would be very interesting if true.

2. Where do zero-hour contracts come from (or rather, why haven't they always been so prevalent)?

Rather, when did they become formalised. I worked at McDonalds and Pizza Hut in the eighties - there was no contract to sign, and you just juggled shifts with your co-workers. It was possible to pull double shifts for a few weeks to build up a cash pile. We were never sitting about on call, shifts were settled the week before.

I wonder if these employers are over employing, with a larger pool of workers than they need, meaning less shifts for everyone?

Here's a scenario - lose job, unemployed, forced onto workfare with 'guaranteed job' at end, 'guaranteed job' is zero hours contract, you are moved to tax credits (or UC in the unlikely event it happens) therefore, not unemployed.

Makes the YTS of the eighties seem idealist and utopian by comparison.

[@contradevian]

Zero Hour contracts help keep "unemployment" figures down says business lobby

http://www.telegraph.co.uk/finance/jobs/10227362/Zero-hours-contracts-keep-people-in-jobs.html

[@contradevian]

Rather, when did they become formalised. I worked at McDonalds and Pizza Hut in the eighties - there was no contract to sign, and you just juggled shifts with your co-workers. It was possible to pull double shifts for a few weeks to build up a cash pile. We were never sitting about on call, shifts were settled the week before.

I wonder if these employers are over employing, with a larger pool of workers than they need, meaning less shifts for everyone?

Here's a scenario - lose job, unemployed, forced onto workfare with 'guaranteed job' at end, 'guaranteed job' is zero hours contract, you are moved to tax credits (or UC in the unlikely event it happens) therefore, not unemployed.

Makes the YTS of the eighties seem idealist and utopian by comparison.

I used to know someone who worked for Pizza Hut in the 80;s and that seemed to be pretty much the case. Never seemed to be a shortage of hours.

Someone on my Facebook appears to be a manager for MacDonalds and used to post "anyone want x number of hours on Sunday" as a status update.

A libertarian blog yesterday was trying to defend them, however the combination of zero hour contracts and workfair will destroy the traditional part time job and "temping."

Edited August 7, 2013 by aSecureTenant

[winkie]

Zero Hour contracts help keep "unemployment" figures down says business lobby

http://www.telegraph.co.uk/finance/jobs/10227362/Zero-hours-contracts-keep-people-in-jobs.html

Yes.....employed but much of the time unemployed, anyone on Zero hours won't be using the HTB scheme....anyone on zero hours won't be boosting the economy by spending their disposable income they never got.

[Coffeehead]

Zero hrs contracts are a disgrace, won't be long before we are all queuing up outside workplaces each morning hoping to be thrown a bone.

The only reason it's making the press now is that it is starting to creep into middle class workplaces.

Edited August 7, 2013 by Coffeehead

[fluffy666]

Push up the cost of labour, and these companies will just automate faster.

Your choice.

Then Automate! There's nothing glorious about wiping tables..

Indeed, you could say that excessively cheap labour acts to deter investment in automation and productivity gains - and it's that very investment that (amongst other things) drives long term economic growth.

[winkie]

If they are going to set interest rates for a long period ahead then they should disband the MPC and save some money.

What the hell are their aims now, inflation is too high and all the recent surveys have shown the economy is recovering yet they want to keep easing

Well people on zero hours working fewer hours than they would like to will not be able to pay the cost of high inflation goods....they either cut back or stop paying through no fault of their own.......nobody can pay for something without having the money earned or not to do it.

[Snugglybear]

Rather, when did they become formalised. I worked at McDonalds and Pizza Hut in the eighties - there was no contract to sign, and you just juggled shifts with your co-workers. It was possible to pull double shifts for a few weeks to build up a cash pile. We were never sitting about on call, shifts were settled the week before.

I wonder if these employers are over employing, with a larger pool of workers than they need, meaning less shifts for everyone?

Here's a scenario - lose job, unemployed, forced onto workfare with 'guaranteed job' at end, 'guaranteed job' is zero hours contract, you are moved to tax credits (or UC in the unlikely event it happens) therefore, not unemployed.

Makes the YTS of the eighties seem idealist and utopian by comparison.

Bit in bold. You have to work a minimum number of hours per week to get working tax credit. No children, 25 or over, 30 hours a week, 16 or over with a disability, or 60 or over 16 hours a week.. With children, single, 16 hours, couple 24 hours joint and one at least 16 hours.

The HMRC website says "If your hours vary from week to week, put down what you and your employer(s) think of as your normal number of paid hours."

If your contract is zero hours and exclusive or you only have one zero hours contract, how can you truthfully claim any "normal" number of paid hours?

I'm sure people on zero hours contracts do claim working tax credits. I'm equally sure that if HMRC investigated every claim they'd adjudge many of them fraudulent.

Edit: typo caused by caffeine deficit

Edited August 7, 2013 by Snugglybear

[LuckyOne]

So on the one hand we have McDonalds- multi billion dollar international corporation and on the other a poorly educated teenager with virtually zero choices as to the job he does and the contract he is obliged to sign to get that job.

No asymmetrical power?

The simple reality is that if people were free to refuse zero hours contracts there would be no zero hours contracts- the fact they exist at all is itself proof that people are forced by lack of alternatives to accept them.

To claim that these contracts are a distortion of the market created by the state is to misunderstand the nature of the free market. What these contracts represent is simply the supply and demand dynamic being played out. If labor were in short supply these contracts would not be possible because employers would be obliged to compete by offering better terms- but as labor is not in short supply employers can reduce the quality of their offer and still achieve the outcome they desire.

This is as pure a free market process as you could imagine- and no state distortion is required for this process to occur.

In a free market, people should have the right to associate. That balances out the power between labour and capital if people choose to join unions and see them as being effective.

In a free market, if labour demands too great a share of production, the producer collapses.

In a free market, if owners and / or managers are ineffective, the producer collapses.

In a free market, employers should have the right to hire people who are not part of a union. That balances out the power between unions and owners. It also allows members to leave unions if union management is ineffective.

In a free market, excess labour means lower wages and worsening conditions. It is government's responsibility to impose society's view of fairness on owners. They have done so with the national minimum wage. The should do so with unfair zero hour contracts. This is how the current almost pure monopoly power relationship between the McDonalds worker and McDonalds can be made more even.

Monopoly powers are not a characteristic of a free market. In my view, the prime responsibility of government is to destroy monopoly powers. Unfortunately, they seem to grant them instead.

In a corporatist world, governments and owners act together to ensure outsized returns of power in the former's case and money in the latter's case when capital is in the ascendancy. As capital is in the ascendancy at the moment, governments have allowed wages and conditions to be worse than they would otherwise have been.

In a corporatist world, governments and labour act together to ensure outsized returns of power in the former's case and power and money in the latter's case when labour is in the ascendancy. When labour is in the ascendancy, governments have allowed wages and conditions to be better than they would otherwise have been.

People are voting with their wallets in favour of a corporatist world rather than a capitalist world as all they want is low prices and ignore all of the other consequences (everything from zero hour contracts to the hollowing out of the high street).

[Tonkers]

Well people on zero hours working fewer hours than they would like to will not be able to pay the cost of high inflation goods....they either cut back or stop paying through no fault of their own.......nobody can pay for something without having the money earned or not to do it.

When will these business owners work this out though?

At the moment:

Sales dwindle so cut costs (fire staff/reduce quality), raise prices/increase margins, sales dwindle further - then die - it's corporate suicide.

I know of 2 big UK brands that are committing suicide right now, it makes me angry because it does not have to happen. I also got first hand yesterday a classic dot com tale of a start up that just burned 2 million of investors money funding his lifestyle instead of building the business, and it's a crying shame, because it's a great business that I could turn into profit in a week if you handed it to me, but you stand there watching as it's killed off by stupid.

Recently I have been asked in interviews, after 20 years of successes on my CV, if I went to University (??!!) - well I am proud I did not if it is turning out the daft turds who get handed a viable business on a plate and destroy it, double quick. I am going to take this successful business, and run it into the ground. Who the ****** are these people?

Edited August 7, 2013 by Tonkers

[winkie]

Soon we will be living in a world where up the road they will be eating steak every night and around the corner they will be savaging in the bins and going to the food banks to feed their children.....how nice.

[Tonkers]

Soon we will be living in a world where up the road they will be eating steak every night and around the corner they will be savaging in the bins and going to the food banks to feed their children.....how nice.

I see a London of the nineties, tons of empty homes at the same time as massive homelessness.

[PopGun]

Who the ****** are these people?

Narcissists

Sociopaths

Retards

All of the above

Take your pick.

[PopGun]

Push up the cost of labour, and these companies will just automate faster.

Your choice.

zzzzzz

[LiveinHope]

I also got first hand yesterday a classic dot com tale of a start up that just burned 2 million of investors money funding his lifestyle instead of building the business, and it's a crying shame, because it's a great business that I could turn into profit in a week if you handed it to me, but you stand there watching as it's killed off by stupid.

Such a familiar tale

[PopGun]

Then Automate! There's nothing glorious about wiping tables..

Indeed, you could say that excessively cheap labour acts to deter investment in automation and productivity gains - and it's that very investment that (amongst other things) drives long term economic growth.

plus another moronic framed argument suddenly turns to dust.

[Tonkers]

Such a familiar tale

I worked a contract there this year. God knows why, the CEO phoned me up and threw his toys out of his pram, but he simply didn't know his numbers. I want to look up to the CEO, not suppress laughter while I pick my jaw up off the floor. A man who got lucky once, but ascribed it to his genius.. More bizarre, myself and others who had been through there booked tens of thousands in sales, and he put a stop to them all and the only unifying factor seemed to be that he didn't want to pay our commission - that he just wanted the 'almost sales' on his books - booked as income. He had a 24 year old boy working for him that had booked over a million in sales revenue - that the investors didn't smell a rat before now... Imagine, though, that I was just a naive kid out of Uni, and that was my introduction to the world of work...

Edited August 7, 2013 by Tonkers

[fluffy666]

I worked a contract there this year. God knows why, the CEO phoned me up and threw his toys out of his pram, but he simply didn't know his numbers. I want to look up to the CEO, not suppress laughter while I pick my jaw up off the floor. A man who got lucky once, but ascribed it to his genius.. More bizarre, myself and others who had been through there booked tens of thousands in sales, and he put a stop to them all and the only unifying factor seemed to be that he didn't want to pay our commission - that he just wanted the 'almost sales' on his books - booked as income. He had a 24 year old boy working for him that had booked over a million in sales revenue - that the investors didn't smell a rat before now...

Of course, when the place blows up, no doubt he'll have 'Experience running a multi million pound operation' on his CV.

[Tonkers]

Of course, when the place blows up, no doubt he'll have 'Experience running a multi million pound operation' on his CV.

Ha ha, spot on. he's moved to the states where there is less stigma attached to total ******ing failure.

You could say that getting and wasting 2 million isn't a failure - but you know what - it is.

Edited August 7, 2013 by Tonkers

[winkie]

Ha ha, spot on. he's moved to the states where there is less stigma attached to total ******ing failure.

No success without failure.........they don't care, will spend the money whilst they have it syphoning off into places only safe to them....short-termism raises its ugly head yet again to the detriment of others not in it to play the game of chance.....more of the same where that came from, what new business can they find to suck the life out of next time.

[Tonkers]

No success without failure.........they don't care, will spend the money whilst they have it syphoning off into places only safe to them....short-termism raises its ugly head yet again to the detriment of others not in it to play the game of chance.....more of the same where that came from, what new business can they find to suck the life out of next time.

Why is there shame and failure in building a new Heinz or Clarkes, employing loads of Brits (to bring it back on topic, not on zero hours contracts subsidised by the state) and lasting for a Century? WTF are they teaching these little shits at Uni?

Edited August 7, 2013 by Tonkers

[winkie]

Why is there shame and failure in building a new Heinz or Clarkes, employing loads of Brits and lasting for a Century? WTF are they teaching these little shits at Uni?

University has now become big business for universities......what is taught can be anything they wish to say, nothing you can't get yourself from reading books or watching some net lectures, it doesn't guarantee a job at the end of it, only jobs for the people that run and work for the business/monopoly, but it almost always guarantees a piece of paper to keep and a bucket load full of debt/taxes if you manage to stick with it to the end.

[fluffy666]

Why is there shame and failure in building a new Heinz or Clarkes, employing loads of Brits (to bring it back on topic, not on zero hours contracts subsidised by the state) and lasting for a Century? WTF are they teaching these little shits at Uni?

Company I know.. consistently one of the fastest growing in the country 1998-2006, major employer, market leader in a pretty significant area of software.

Got sold off to a foriegn owner in 2006. Cue.. investment in new product development slashed. Complex delivery processes offshored to new, barely -qualified staff. Internal promotions ended. Sales growth goes from 50% pa to zero.

So.. the VC backers made a grand return, but the chance to build a multi-billion pound British company was thrown away and jobs progressively lost.

The thing is, I can understand how VCs might want to make their money, that's not a problem.. it's the feeling that it's too easy to sell off companies into destruction with no comeback or consequences for the people doing it.

[winkie]

Who does private equity benefit? http://news.bbc.co.uk/1/hi/business/6261608.stm

This is a good series... http://www.bbc.co.uk/iplayer/episode/b01nz93z/Britain_on_Film_Series_1_Getting_Down_to_Business/

Edited August 7, 2013 by winkie