The UK's Gig Economy
The recession may be over, but the UK's economic landscape has changed dramatically over the past few years. The idea of job stability has transformed from an expected reality into an idealistic one. Today's economy might be thriving on paper, but the rise of what's known as a 'gig economy' leaves many workers at the wayside.
What Exactly is the Gig Economy?
The gig economy is an umbrella term used to describe the current economic climate occurring within Britain. It encapsulates the idea that people are hired in a way that promises maximum benefit to the company, and an uncertain future for employees. In basic terms, it is the rising trend of companies hiring people in a way that means they have little or no obligations to them. Their employment could be in the form of working on a casual basis, being given a temporary contract, or signing the dubious paperwork of a zero hour contract.
Temporary contracts are a common form of employment, and advertisements for such positions are common seen on online recruitment sites. It is a contract that means, yes, you are employed with all rights pertaining to that, but you're only needed for a brief period of time. Common lengths of time for temporary contracts are three or six months, or sometimes a full year when the job in question is in the field of teaching and education. In this respect, the one year allowance is not a result of greater generosity. It is more accurate to say that it operates for one school or university year. It is quite often covering for someone on maternity leave or perhaps on some sort of sabbatical when such posts are offered.
So, the next time you're applying for full time positions, make sure they're not temporary contracts. These contracts are not the kind where if you excel you'll be rehired. The companies in question are usually filling a gap for when one of their permanent staff is taking a period of time off work. Don't fool yourself into thinking that you're so good at the job they'll move the earth to keep you. This rarely happens.
What are Zero Hour Contracts?
Zero hour contracts are a bit like temporary contracts on heroine, down a back alley, sticking a dirty needle in your arm. Okay maybe that's a bit over the top. Nonetheless, a zero hour contract is not something you want to enter into unless you're either:
1. A lad or lady of leisure who lives on air and doesn't actually need money to survive.
2. Mildly insane.
3. Someone who is not the main breadwinner in their house and just likes to make a bit of extra money for holidays/ savings/investments etc.
So, number 3 is really the only logical reason to opt for such a contract. But what are they?
A zero hour contract is when you, the employee, sign a contract that says you will get whatever hours the company sees fit. That's it in a nutshell. Some companies might dress it up by putting a minimum amount of hours on the zero hour contract (making it essentially a non-zero hour contract) but the principle behind them remains the same. The business strategy behind zero hour contracts is to essentially keep a team of staff on hold for busy days or occasions. Let's think of the retail industry for example. Let's say you're hired to worked in a clothes shop on a zero hour contract. This means that you'll probably get a few hours on the weekend, but will never get hours on a weekday when the permanent staff are working. The only time you might is when one of these workers is sick and they have no one else to cover. This makes you the company's lapdog, always helping out when you're needed and only being rewarded with extra hours when it's high season for clothes shopping (Christmas being the number one busiest time for retail).
This kind of contract is simply ridiculous for a person hoping to contribute towards household expenses— particularly if you need to earn a certain amount to make ends meet. For reasons like this, it's absolutely essential that when you're applying for a job you make sure you know what you're getting yourself into. If you reach the interview stage, or are hired and have yet to sign any paperwork, make sure you read everything thoroughly. My advice here is to request a stable contract with a definite amount of hours or days worked. I remember starting to work for a chain retailer, and when I was signing the customized zero hour contract I questioned it. Mine was a dressed up with a minimum of eight hours per week. The hiring manager assured me it was pretty much a non issue, and that hours would be absolutely no problem. So I signed it, and then wondered why I stopped getting thirty hours weeks and started getting four, eight, or twelve hour ones instead.
Yes, it's important to get a job, but make sure you read the small print. If you are in desperate need of a full time job, it is better to wait a while longer instead of starting work with a company and only realizing six months down the line that it won't pay the bills. At least when you're on unemployment benefits the amount is consistent. You might have to scrape together pennies for a chocolate bar, but better the devil you know.
The key issue with zero hour contracts in this respect is that many workers don't fully understand what they're entering into. Moreover, new positions are offered close to busy times, so when you first start working there you'll get excellent hours. Thus, you will think that you are earning enough to pay the bills. Then, six months down the line you'll be begging your manager for extra hours, and they'll be apologizing profusely but never actually doing anything about it because they're already over budget.
Companies That Offer Gigs
The final component of the gig economy is companies who actually pay workers per unit of work as opposed to per unit of time. Uber and Amazon are two well-known companies who do things this way, and their methods haven't been controversy free. Uber has somewhat misrepresented itself as company that simply connects with self-employed workers, when in reality the freelancers are hired by the company and paid per job. This allows them the financial security derived from knowing that you don't have to lose profit due to a worker's inefficiency.
Amazon came under even greater fire when it was discovered that their delivery drivers often deliver over two hundred parcels a day for less than minimum wage. Not only this, but the drivers often had to keep a plastic bottle in their vehicle because they literally didn't have time to stop to go to the toilet. The working conditions are one thing, but the mode of employment is also highly questionable. Amazon employ delivery drivers through recruitment agencies, who set up the drivers with a system not unlike Uber. Thus, Amazon can have a limitless amount of available workers at their beck and call without having to provide any of the standard employee benefits such as sick days or holiday pay.
Pros of a Gig Economy
There are two main advantages of living in a gig economy. The first only applies to business owners or anyone involved in the pressures of meeting a company's profit margins. Gig economy business strategies allow for companies to run more efficiently. Greater efficiency almost always amounts to better profit margins in the world of business. The indirect offshoot of this is that it fuels the economy at large, so you might want to look at it optimistically and say it's great for the country.
The problem is, employees live singular and complicated lives, and life can be hard enough without having to try to figure out what you might earn in the next month. With regards to the actual workers then, a gig economy is a fundamentally flawed way of running things. The only type of worker it serves is any worker who doesn't have to pay bills. Teenagers can probably cope well enough with a zero hour contract. Similarly, a stay at home mother whose kids have just moved out might want to earn a few extra bob.
So yes, it might benefit one or two types of workers in a very vague sense, but even they probably won't like not being able to plan ahead or know what days they're working until the day before. Anyone who works knows that routine is key to planning the important things like spending time with family and running errands. Thus, even this second 'advantage' is a highly contentious one.
Cons of a Gig Economy
From the discourse above, it's clear that I'm not a fan of the various mechanisms which operate under a gig economy. A gig economy is a highly unstable system for many reasons. It might initially seem to benefit companies, but if consumers who have to pay bills can only get uncertain job offers, they are going to try and save money if and when they can. In economic terms, this translates to less spending in the public sphere.
The biggest disadvantage of a gig economy is that it moves the UK closer to the dreadful possibility of becoming a welfare country akin to the disaster happening in America. When jobs are only part-time, on a casual basis, or paid like a freelance position, workers who need extra money will have to turn to the government to supplement their income. This in turn means that those lucky few who have a stable full time job will have to pay even more taxes to keep the economy relatively in check (by no means healthy, but kind of like trying to balance on a ship in a storm). Those same people will then be more frugal in other ways, and the same shops that initially seemed to benefit from casual employees will have to revisit their staff budget once again.
It's a vicious cycle, and I'm no economist so I have no idea how to break it. One thing I do know is that bills do not simply disappear, and if you can't find a position that offers you a consistent salary, you're probably better off just going on the dole. This is because if you do not earn enough from your crappy contract job, you will inevitably have a reduced amount of social benefits coming your way.
Thus, for twenty hours work some lucky week you might only get four hours of pay once you make the deductions. It's a sad reality that you actually have to sit and calculate whether going out to work is even worth it. We need to bring back job stability and transform the employer/employee relationship. In the current gig economy, the employer is the master and the employee the puppet. Companies need to stop looking at workers as disposable commodities, and start rewarding them for the fact that without them, they wouldn't survive.
The Gig Issue: What is the gig economy and which UK companies are part of it? From Deliveroo and Amazon to Uber