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Zero Hour Contracts, the Impoverished Elephant in the Room

30/06/2014 17:21 BST | Updated 30/08/2014 10:59 BST

The government was very proud of how tough it was being on business owners by naming and shaming those who failed to pay employees the minimum wage. They eagerly announced these tough new rules that saw 25 employers (although crucially not large firms under investigation before the changes in October) named, including the amount of compensation owed to workers. Of course they were right to order the payment of minimum wage, to do otherwise is to break the law. What they have conveniently continued to ignore however is the legal proviso allowing employers to consequently abuse this law through zero hours contracts.

According to the National Office of Statistics 'employers held 1.4million contracts with workers that did not guarantee a minimum number of hours'. From a company's perspective this allows them a flexible labour pool with no obligations to their workers, and given the current demand for jobs, there will be those eager to take a job offer based on such obligations. This flexible system is weighted heavily in favour of the employers, and until this week approximately 125,000 individuals were in situations where they were legally unable to look for supplementary income under such a contract, something which Vince Cable recently announced has been outlawed.

However, this success is meagre. From a companies perspective, the ability to pick and choose your labour based on demand is a huge plus in keeping human capital costs low. Those in high offices, on a comfortable salary and pension, carefully assigned to deliver judgement on economic figures claim that these contracts are essential for keeping unemployment down. For the government it also looks great, 1.4million individuals in work who need not visit their workplace unless demanded at the employers beck and call. The only loser in this situation is the poor employee, awaiting a call each day as to whether they get a chance to work.

The contracts are advertised by Cable as providing work for pensioners, supplementing their income (highlighting a pensions crisis that is desperately under discussed), and for students. Yet for those who've finished school or been made redundant, they can be the sole source of income to someone working through debt, paying rent and trying to provide for a child or family. It is here that we see Michael Sandel's prediction concerning our current state of affairs hit home hardest,

'market values have come to govern our lives as never before.'

The onus in the debate on these contracts, at least in the echelons of government seems to be to help people, so long as those companies and corporations don't have issue with it. We seem so swept up in the joys of this year's economic growth that people, both individual and in general, have been forgotten. Market forces do not care about individuals, the role of the firm, particularly one involving large amounts of unskilled labour is concerned exclusively with profit. People are an unhappy consequence of such an economic system, to weigh employment opportunities and rights in their favour snip into that holy profit margin.

It is with this in mind, particularly the uncertainty concerning potential pay that plagues these contracts that I offer a solution. Outlaw zero hours contracts and instead ensure that any individual entering a work contract is given a legal guarantee of the number of the minimum number of hours they should be required to work. It might increase the costs for corporations and may in the short term lead to a rise in unemployment, but if the economy is growing as fabulously as George Osborne announces, then the number of jobs should increase to combat this problem. We might even be able to be paid everyone the living wage too! The invisible hand of the market that these companies all trust will sort it out. Just make sure it isn't allowed to squeeze us dry.