Behind the numbers The precariat under strain
In February, Eurostat – the European Commission’s statistical agency – published its latest figures on ‘precarious’ employment. Just 0.4 percent of British workers fell in this category, the second lowest rate in the European Union, and well below the bloc’s average of 2.3 percent for 2016.
But at second glance, the statistic elides more than it reveals.
Eurostat loosely defines unstable work as a contract of less than 3 months. But many who might consider themselves as part of the ‘precariat’ – a newly coined social class formed of people living in socioeconomic insecurity – would consider that description rather narrow.
At the same time, flexible forms of employment have helped to drive economic growth by supporting entrepreneurship and supplementing incomes, as we noted in our June 2017 Future of Flexible Work report. And, not all temporary contractors are economically insecure – in fact, it’s in high wage sectors that gig jobs have seen the highest rates of growth over the past decade.
Precarity ought to encapsulate more than just temporary working contracts. Indeed, even if workers have permanent jobs they may still not be earning enough to sustain their households, and hence could be considered as living insecurely. On one measure, the Joseph Rowntree Foundation found that 2.6 million, or around 10 percent of all UK households fell below the charity’s minimum income standard and included at least one working adult in 2016.
What’s more, even if in theory a worker has a permanent contract, in practice technology and the rapidly changing demand for skills may mean their profession or entire industry is at risk of obsolescence. That’s clearly not a secure state of affairs for individuals who need to plan for the long-term. The Centre for Cities think tank finds that 20 percent of jobs in Britain are likely to be displaced by 2030 as a result of automation and globalisation.
The wider point here, which we outlined in our March 2016 Lifelong Learning report, is that employees with a lack of access to retraining opportunities to reskill in ‘at-risk’ jobs are also under considerable duress, and might also be considered as living in long-term economic insecurity. Given the rapid pace of innovation and technological change, in general, it’d be hard to find many jobs today that wouldn’t require some form of upskilling in the near future.
“Around 3 percent of those employed in the UK are on zero-hour contracts – casual agreements to hire staff with no guarantee of work”
And what about those in other freelance work, or in self-employment – which Eurostat might be excluding? Of course, without the backing of a firm, individuals certainly put themselves at risk, going alone. Around 3 percent of those employed in the UK are on zero-hour contracts – casual agreements to hire staff with no guarantee of work. As a sole form of employment, they might in some cases be insufficient to offer financial stability. Taken together all these forms of employment may total around 22.2 percent.
Yet, with all these figures, statistical accuracy is also a key factor. Data from the ONS is limited by self-reporting, and also in dissecting what other forms of employment or financial support people have alongside their precarious work. And, as outlined, temporary working arrangement alone are neither sufficient nor necessary conditions to assume precariousness. This restricts our ability to get a wholesome picture.
In sum, the Eurostat figure shouldn’t lull us into a false sense of security. But nor should it send us into a frenzy.
In his book “The Precariat and Class Struggle” Guy Standing hypothesises that the post-1970 globalisation-led growth model of many developed nations, which maximised competition and increased labour market flexibility, “[transferred] risks and insecurity onto workers and their families.” While that forged greater scope for growth and enterprise by taking the slacks of the labour force, it also created greater need for businesses and policymakers to build their resilience.
So what is crucial is ensuring that flexibility is balanced by appropriate support for workers and those employing them, and, above all, by ensuring that everyone has the ability to retrain, reskill, and learn throughout their lifetime.
Global trends, technology, and wider economic forces are not going to stop transforming the nature of employment. As such, businesses and policymakers will need to be increasingly agile and forward-looking to ensure the economy remains resilient and dynamic in the face of change.
Tej Parikh, Senior Economist, IoD
Tej holds a Bachelor’s degree in Economics from University College London, and a Master’s degree in International and Development Economics from Yale University. Prior to joining the IoD, he worked as an economic analyst at the Bank of England in roles across monetary and financial policy. Subsequently, he moved to Cambodia where he was a journalist focusing on economic and private sector development for a national newspaper. He has since been a freelance political risk consultant and journalist, covering Europe and Asia in particular. He has published for numerous international media outlets including Foreign Affairs, the Guardian, and The Diplomat, and is currently an active member of London’s Great Debaters Club.