Flip Chart Fairy Tales

Has insecurity peaked?


Have we passed Peak Insecurity? The Resolution Foundation reckons we have. Britain’s labour market is at a tipping point, says director Torsten Bell.

[T]here is good reason to believe that the labour market shifts over the next decade will be different to the surprises we’ve seen over the past decade.

Hidden behind the noise of Brexit, the labour market is entering a new phase. In the second half of 2016 the number of workers on zero-hours contracts flatlined and agency worker numbers actually fell by 50,000. The most fashionable form of work in Britain, accounting for just shy of 100 per cent of employment growth this year, is good old-fashioned full-time, employee jobs. We appear to have passed peak insecurity.

As Torsten shows, the number of workers in what the OECD calls non-standard work, which means anyone not in a full-time employee job, has fallen recently. After steep rises since the recession, the numbers in self-employment, agency work, part-time employment and zero hours contracts have levelled off.

This, he says, is due to the tightening of the labour market. Rather than falling unemployment leading to pay rises, as happened in previous decades, the falling labour supply is encouraging employers to offer better employment terms and a better quality of work.

But is there more to insecurity than the type of employment contract people are working under? After all, full-time employees are still the majority of those in work. The proportion is slightly lower than it was during the decade leading up to the recession but we certainly haven’t seen the sort of shift towards non-standard work that features in some of the more hyperbolic commentary.

Source: ONS Employment Statistics, 14 June 2017

When the Resolution Foundation looked at this in 2015, they found that the proportion of people in insecure work had risen over the past decade from 30 to 32 percent while at the same time the proportion of workless people had fallen.

Which leaves me with a question. How much of the general sense of insecurity people are feeling is due to the lack of security in their job contracts and how much is due to something else going on in the workplace?

The RSA’s Jake Thorold has similar thoughts:

While the dial may be shifting back towards better security in a strict contractual sense, major transformations being wrought by technology, digitalisation and globalisation have also broadened what it means to be and feel insecure. As Anthony Painter has recently argued, ‘the experience of insecurity is subjective as well as objective. Insecurity is about your access to a sense of agency and resilience in your life.’ This applies no matter your employment type.

It’s little surprise that between 2005 and 2015 the number of routine and semi-routine workers reporting stress at work increased by a third. Many of these employees would be considered secure by conventional measures yet are anything but.

I think he and Anthony may be onto something here. Some aspects of this sense of insecurity are not captured in the employment data. You can feel insecure when in a full-time permanent job and there is evidence to suggest that a lot of people do.

As Anthony says, the British Social Attitudes Survey shows rising levels of stress and insecurity at work. Older workers and those in more routine occupations feel less secure and less in control of their work than their counterparts did ten years ago.

Charts via British Social Attitudes Survey

The five yearly British Skills and Employment Survey also showed increasing concerns about the likelihood of job loss but also about management behaviour.

From “The hidden face of job insecurity“, Duncan Gallie et al, 2016

This suggests that, even for those in full-time work, there is more of a sense that bosses can get away with treating people unfairly than there was a decade or so ago. Technology, declining union membership and, more recently, the neutering of employment protection have probably played a role in heightening these fears.

A report on poverty published by the ONS earlier this week might give us some clues too. Compared to the rest of Europe, the UK has one of the lowest rates of persistent poverty. We have relatively high rates of entry to and exit from poverty which means that most of our poor people don’t stay poor for very long.

The flip side of this is that, over time, quite a lot of people will have had a taste of poverty. While only a small number of people remain in poverty for over a year, 30 percent have experienced poverty level incomes over the last 4 years. To put it another way, we do a much better job of distributing our poverty than other EU countries. Over a 4 year period, three in ten of our people have been given the chance to try it out.

This figure has ranged between 30 and 35 percent for the last decade. This is what the Joseph Rowntree Foundation called the ‘low-pay, no-pay’ phenomenon, as people cycle in and out of low paid work.

It got me thinking about the point Paul Johnson made when discussing the repressive labour laws of the early 19th century (see previous post).

The annual chance of a working-class household suffering criminal prosecution for breach of labour contract lay between 1 in 150 and 1 in 200 – a sufficiently high rate for knowledge of the risk to be well known within working class communities.

Could high rates of short-term poverty be having a similar deterrent effect in the early 21st century? If 30 percent of people have experienced poverty incomes in the last 4 years, many people will know someone in their workplace who has found themselves in financial difficulty relatively recently. Could low pay therefore be self-reinforcing in that the prevalence and fear of it is contributing to feelings of insecurity in the workplace and a reluctance to ask for higher wages?

I also wonder to what extent this wider sense of insecurity has contributed to the fall in job-to-job moves since the recession. Despite record levels of employment, people are not changing jobs as frequently as they did before 2008. Even the job hopping millennials have started to worry about job security.

Chart by Resolution Foundation 

Perhaps there is a ‘there but for the grace of God’ phenomenon going on here. People see others in and out of low pay while working on precarious contracts and hang on to their jobs for dear life.

The hysterical commentary on the labour market is probably not helping either. Headlines saying that half the workforce will be freelance by 2020, sometimes in publications that really ought to know better, add to the sense that the labour market is in a state of insecurity and flux. Likewise, the noise about immigration. Almost everyone who has ever looked at this seriously has concluded that immigration only has a small impact on pay. However, (and this is admittedly anecdotal) I hear stories of people being told by managers that there are thousands of Poles queuing up to do their jobs for less. There aren’t, of course, but that doesn’t matter. If people think there are then that will only add to their nervousness.

Finally, there is the question of housing. Feelings of insecurity at work are not just the product of what happens in the workplace. As an ever larger proportion of working age people move into private rented accommodation and housing costs take up more of people’s incomes, there is bound to be an impact on work.

Chart by Resolution Foundation

The private rental sector is notoriously insecure. Being at the whim of their landlords on one side and their bosses on the other, is it any wonder that today’s workers lack the confidence and security of their forebears? A full-time permanent job might look the same on paper as it did 30 years ago. It might even pay better in real terms. But 30 years ago the job holder was more likely to be unionised and have a secure tenancy. Asking for more pay or challenging arbitrary behaviour by managers is a lot harder if, at the back of your mind, there is the fear of losing your home.

So have we passed peak insecurity? I think the Resolution Foundation may well be right in that we will see a continuation of the move back to more full-time employee jobs. But there is also insecurity among those in permanent jobs. As Anthony Painter says, “insecurity is a deeper state than just a measure of employment”. It may be that the feelings of insecurity last for a lot longer than the levels of non-standard work reported in the employment statistics suggest.