Zeroing in on zero hours contracts facts
1st Apr 2015
Ed Miliband has referred to an "epidemic of Zero Hours Contracts" in a speech today, claiming that three times as many people are on zero hours contracts than in 2010; that this represents a 20% increase in the last year alone; and that there are 1.8 million contracts without guaranteed hours.
The Conservatives counter that zero hours contracts account for just 1 in 50 jobs; and that only 2.3% of workers are on zero hours contracts.
What do the facts say?
- The statistics do not and cannot show an "epidemic" in zero hours contracts. Comparisons of the number of people on zero hours contracts over time are not reliable, as the Office for National Statistics makes clear.
- The statistics do show that 66% of people on zero hours contracts fall in the category of 'does not want more hours'. The statistics alone do not show that everybody on zero hours contracts, or even a majority of them, are dissatisfied.
- The latest ONS release shows that people whose main employment is a zero hours contract account for 2.3% of people in employment. This is 1 in 43 - or to a round number 1 in 40, not 1 in 50 as the Conservative Party has said.
There is a wider argument here about job security, which affects more people:
- Unemployment and employment rates have returned to pre-recession levels.
- But the proportion of people in part time employment because they could not find a full time job (16.2%) has not.
Labour claim: "There are three times as many zero hour contracts now as 2010"
This is unjustified. The numbers are affected by greater awareness of zero hours contracts. Nobody knows how much of the increase really is more people on zero hours contracts, and how much is just increased awareness.
The Office for National Statistics explains:
"The number of people who are shown as on a zero hours contract will therefore be affected by whether people know they are on a zero hours contract and will be affected by how aware they are of the concept. The increased coverage of zero hours in the latter half of 2013 and are likely to have affected the response to this question and is explained in detail is the report: Analysis of Labour Force Survey estimates of people in employment reporting a zero-hours contract, April to June 2014."
In other words, the Labour Party is talking about an increase that may partly be explained by the Labour Party talking about zero hours contracts.
Labour claim: "There has been a 20% increase in the number of people on zero hours contracts since last year."
The same problem applies:
The Office for National Statistics' release says (p1): "This figure is higher than that for October to December 2013 (586,000 or 1.9% of people in employment), but it is not possible to say how much of this increase is due to greater recognition of the term "zero hours contracts" rather than new contracts." [our emphasis]
Conservative claim: "zero hours contracts account for just 1 in 50 jobs and only 2.3% of workers are on zero hours contracts."
The latest ONS release shows that people whose main employment is a zero hours contract account for 2.3% of people in employment. This is 1 in 43 (or to a round number 1 in 40).
It is not yet clear if the party means something different by '1 in 50 jobs'. It is not possible to calculate what proportion of jobs in the UK involve zero hours contracts because neither of the two measures of zero hours contract available — people or contracts — equate to one job. One person can have more than one job, and one job can have more than one contract.
If the Conservatives were referring to the proportion of contracts in the economy that don't guarantee any hours (the 1.8m contracts Labour referred to), the ONS figure is 6%, or one in 17.
Finally, both measures from the ONS have wide confidence intervals. The number of people on zero hours contracts is likely to be between 630,000 and 765,000, while the number of contracts is likely to lie between 1.4 million and 2.2 million.