Putting recession into context – our first monthly report
Today we launched our first Recession Report. This monthly series will provide ongoing analysis of labour market trends and forecasts, and provide some of the facts behind the headlines. It will also consider how the recession is impacting upon particular policy areas, and in the November edition we provide a focus on vulnerable employment.
The report gives some consideration to the scale of the recession that we are entering. We highlight that while we are not already in the worst recession of all time – the unemployment rate is still quite low by the standard of the early 1990s, let alone the early 1980s – there are real reasons to be concerned. The TUC therefore thinks that the picture will get a lot worse before it gets better – with the vacancy and unemployment rates both heading in the wrong direction. Our view is that without a bold policy response over the next few weeks the unemployment figure will exceed 2.5 million nationally by some way, and the unemployment rate may rise to 8 per cent.
We also highlight the particular risks faced by workers in vulnerable jobs. These are workers in the lowest-paid and most precarious employment, and often have the least legal rights at work. Our Commission on Vulnerable Employment made a conservative estimate that there were two million workers such workers nationally. However as recession bites we think this number will increase – while there will be fewer temporary workers in the labour market there may be more employers, particularly in low-paid sectors, who move staff onto ‘worker’ contracts (meaning staff have fewer rights and less job security) as a way to make percieved savings. Other employers may be more likely to categorise workers as self-employed as a means to avoid their legal obligations, and employers of low-paid directly employed staff may also use the threat of unemployment as an excuse to introduce exploitative treatment.
Anecdotal reports of poor and illegal employment practice have already started to come through to us – and please do let us know if you hear of more. Examples that we’ve recently been told about include:
- directly employed construction workers bring moved to self-employed contracts, as a way to enable employers to avoid their legal obligations;
- cleaners being told that they have to undertake more jobs per day for the same wages, as a result of redundancies;
- pregnant women being made redundant as a means to enable employers to avoid the costs of maternity pay and cover;
- migrant workers being told that they no longer qualify for employment rights at work.
There are opportunities for Government to prevent vulnerable employment taking hold. Immediate solutions that we propose, in addition to the TUC’s submission to the Pre-Budget Report, include increasing resources dedicated to enforcing employment rights, ensuring that all workers have access to the same rights at work and using public procurement as a mechanism to increase decent work. Any Government committed to fairness at work will want to act.