Half a million British workers fell into insecure employment last year, bringing the total number of employees in low-paid jobs to more than a fifth of the workforce, new data has shown.
In evidence of a slowing labour market, research from the Work Foundation at Lancaster University found that 500,000 people had taken on insecure forms of employment between the spring of 2022 and 2023, defined as workers forced to take jobs with zero-hours contracts and no employment rights.
The total number of people in unstable employment is now at 6.8 million, or 21 per cent of the active labour force.
The research found that vulnerable groups were more likely to be in such jobs, including women, disabled workers, young people aged between 16 to 24 and workers from Indian, black African and black Caribbean backgrounds.
Ben Harrison, director of the Work Foundation, said that unstable jobs meant employees were stuck in a low-pay trap that made them “particularly vulnerable to persistently high inflation. Our research suggests many end up in insecure work because they’re forced to trade security for flexibility in order to manage childcare, long-term health conditions or other commitments.”
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In signs of a widening gap between secure and insecure employment, separate data from Adzuna, a jobs search engine, showed that advertised salaries for listed full-time jobs in January had risen to a near-three-year high at an average of £38,168.
Adzuna’s figures showed a 1.5 per cent monthly jump in advertised salaries at the start of the year and a climb of 3 per cent over the year to the highest level since March 2021. The jump in advertised salaries, usually a sign of a tight labour market with a high demand for workers, coincided with another drop in overall vacancies to 876,000, the weakest figure since April 2021.
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Tony Wilson, director of the Institute for Employment Studies, said the figures pointed to “fewer lower-paid jobs and more high-paid jobs being advertised, which has pushed average salaries to pretty much their highest on record. With a bit more competition for jobs, too, this is arguably good news overall, but it reiterates the need for us to do much better at helping people to fill these better-paid jobs if we want to grow our way out of this recession and bounce back strongly this year.”
The labour market has thrown up mixed signals over the past year, as interest rates have been taken to the highest levels since 2008.
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The unemployment rate, which is the subject of uncertain calculations from the Office for National Statistics, stood at 3.8 per cent at the end of last year, a historically low level, given the degree of monetary tightening that has been delivered to the economy since 2022. However, closely watched measures of vacancies have fallen steadily for the past 13 months and are close to a three-year low, raising hopes that wage growth will begin to cool.
The Work Foundation called on the government to “implement an immediate pause to any further tightening of welfare sanctions” in order to assess whether employees were being forced into low-paid, low-protection jobs. The think tank said that an independent review into people entering the labour market was needed to “improve living standards and increase and sustain labour market participation”.
