The aftermath of the 2008 crisis not only saw weak levels of growth, but a fundamental shift in the character of the labour market. As the economy contracted and people lost their jobs, they were replaced with low pay, zero-hours contracts, in sectors where workers have far weaker trade union representation.
In 2008, 143,000 people were on zero hours contracts. By 2016 it reached 905,000 and it’s been about that level ever since.
Not only did the 2008 crisis force down wages, the insecure working conditions it created made it harder to negotiate higher pay. Adjusted for inflation, total pay has only now – 13 years after the last economic crisis – finally returned to its 2008 levels.
Today, some of the people most likely not to have been furloughed are those on low pay, zero-hours contracts. I was shocked to read in the latest ONS labour market report that the net impact of recent job losses could have actually increased average pay by 1.5%. That’s because the people on the lowest wages are the ones most likely to lose their jobs.
And where they don’t lose their jobs, many are afraid to go off sick – for fear that they won’t have their hours renewed, or because the Statutory Sick Pay they’ll receive won’t cover rent and bills, or that they won’t even be entitled to SSP.
Low pay and insecurity in our economy has created a perfect storm for transmitting the virus. And the Government is failing to learn the lessons.
We need a new vision for our economy – one that defends wages and conditions, invests to drive sustainable growth and create jobs, and empowers workers in their workplaces. Unfortunately, that vision is entirely missing from the Government.