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Labour Market Realities: Young Workers

 

For young workers, poor quality employment is the new normal. They increasingly move from zero-hour contract to zero-hour contract, agency job to agency job. In this world, pay tends to be poor, and chances for progression slim. We spoke to a call centre worker, Dan, about his experience, what he’s witnessed as a young worker, and how his trade union helped him avoid the vicious cycle of insecure work.

Young people are often in the most insecure part of the labour market. Sometimes, this isn’t so much of a problem. For those in education, a temporary contract with limited protections can often bring a bit more spending money, and if they lose it, so what? However, for many others their employment is much more important – it’s how they pay their rent.

Young workers are on the thin end of the wedge in the labour market, and this is well documented. There are about 600,000 economically inactive young people who aren’t in full-time education. Young people are especially vulnerable to economic shocks - after the recession hit, youth unemployment skyrocketed to 22.5% in late 2011. The unemployment rate for 16 to 24 year olds is currently 12.2%, still notably higher than the pre-recession low of 11.6% in 2001.

These young workers are overwhelmingly more likely to be on a zero hour contract. The statistics are alarming: 33% of all people on zero-hour contracts are aged between 16 and 24. In fact, there are over twice as many young people on zero-hour contracts than not.

As Dan points out, insecure work can make it more difficult for young workers to get permanent work. This leads to 25 year olds having never had a job that lasted more than six to 18 months, making it very difficult for a young person to feel financially secure or to plan in advance. For many young people, saving a deposit for a flat or saving up for a holiday feels out of reach.   

Ironically, it doesn’t help companies either. Turnover rates for front-line agents at call centres are over 10 percentage points higher than for the rest of the economy. Replacing staff isn’t cheap - the CIPD estimates the average cost per staff member replaced is £6,125, adding huge unnecessary costs to the industry. 

Dan also points out that young workers are disadvantaged by the minimum wage, or what he terms the discrimination wage. If you are 25 and over you earn a minimum of £7.50/hr, £0.95 below the actual living wage of £8.45/hr, an unacceptable gap. However if you are aged 21 to 24, you earn £7.05/hr, if you’re under 21 you earn £5.60/hr, and if you’re under 18, you earn £4.05/hr, less than half of the genuine living wage. And although the minimum wage discriminates by age, the cost of living does not.

Luckily, Dan’s story ended on a positive, and he was able to get a permanent contract to give him the stability that all workers deserve. But he got this because he was helped by his union, the CWU. The CWU helped guide Dan in proving himself to the company. Unfortunately, however, less than one in ten low and middle earning 21 to 30 year olds are in a trade union. To give young workers a fair chance, they need better employment protections and the opportunity for secure work. Like Dan, they also need a union.

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