Precarious pay and uncertain hours: insecure work in the UK Labour Market.

Several shockwaves have been sent through the UK Labour Market over recent years. Covid-19 saw all non-essential economic activity grind to a halt, leaving millions of workers furloughed and a smaller (though not insignificant) number fall out of the labour market due to long-term sickness or caring responsibilities, many of whom are yet to return. More recently the cost-of-living-crisis has also left its mark, the clearest manifestation being the real-term pay cut most UK workers are currently facing, despite nominal wage growth being at historically high levels – hitting 7.2 per cent in April 2023.   

Throughout this period, a welcome, yet unexpected constant, has been low unemployment, peaking at 5.2 per cent since the start of the pandemic and sitting at 3.8 per cent at the time of writing. While the post-pandemic peak was somewhat elevated, it is by no means high in historic terms, with the rate being higher only as far back as 2015. However, while a high quantity of jobs has been a prominent feature within the UK Labour Market over recent years, a high quality of jobs has not.   

As argued in this report, insecure work is a key feature of the UK economy, with  6.1m workers experiencing some form of work insecurity. This represents a slight decrease from 2021 - when we last ran this research - when 6.6m workers were in insecure work. Insecure work is unevenly distributed throughout the UK, with particular sectors, regions and communities being more impacted than others. Finally, insecure work is also deeply connected with low pay, meaning a similar cohort of workers feel the sharp end of both low pay and insecure hours.   

Key findings from this research are summarised below:  

Scale of insecure work: 

• 6.1m workers in the UK are in insecure work, with 3.4m being in low paid insecure work. This represents a slight decrease from 2021, when 6.6m workers were in insecure work and 3.7m were in low paid insecure work.   

• This amounts to 19 and 11 per cent of workers in the UK respectively, slightly down from 21 and 12 per cent respectively in 2021.   

Types of insecure work: 

• The most common forms of insecure work in the UK are workers with pay/hour volatility (2.9m workers) and low paid self-employment (2m workers). Less common forms of insecure work include having a non-permanent job (1m workers), being on a zero-hours contract (1m workers) and being under-employed (220,000 workers).  

• Looking at how these have developed over time, most types of insecure work have declined over the past 6 years, with zero-hours contracts being the only exception. Zero-hours contracts have increased by almost 90,000 workers since 2016.  

Who is most impacted by insecure work:  

• More than half (55 per cent) of low paid workers earning below the Living Wage are in insecure work (3.4m workers in total), compared to 11 per cent of those earning at or above the Living Wage (2.7m in total). This makes low paid workers around five times more likely to be in insecure jobs than those paid above the Living Wage.   

• The sectors with the highest incidence of insecure workers are ‘Agriculture, forestry and fishing’ (53 per cent) ‘Accommodation and food services’ (41 per cent) and ‘Arts entertainment and recreation’ (37 per cent).  

• The regions with the highest proportion of insecure work are the North East (24 per cent), South West (21 per cent) and Wales (21 per cent). The regions with the lowest percentage of insecure workers are Scotland (17 per cent), London (18 per cent) and the South East (18 per cent).   

• Minority ethnic workers, young workers and older workers are all disproportionately impacted by insecure work.   

Impact of insecure work:   

• 59 per cent of workers whose hours vary have been called into work with less than a week’s notice. 13 per cent of those with varying hours have been given less than 24 hours' notice.  

• A quarter of workers with varying hours have had shifts cancelled by their employer unexpectedly.  

• When shifts are cancelled, 90 per cent of workers do not receive full payment, with 26 per cent not receiving anything.  

• 27 per cent of workers with varying hours have had to pay higher travel costs due to being called into work on short notice, while 17 per cent have had to pay higher childcare costs.