Under-employment - the dark side of flexible working or just a sign of the recession?

Today, TUC figures showed that the number of men working part time who are looking for full time work has doubled in the last four years from 293,000 to nearly 600,000. Is this a sign of the recession or is it an inevitable result of a move towards more flexible working?

In both A level Economics and Business Studies, flexible working is an important topic. It can be seen in many forms, including part time, temporary, casual, flexi-time and tele-working. More recently, the Government has been looking at making it easier for firms to fire unwanted workers by increasing to two years the minimum period of employment before unfair dismissal can be claimed.

For businesses, flexible working has a number of possible advantages:

Firstly, it potentially brings many more workers into the market such as working parents, the semi-retired and those who simply cannot or do not want to work nine to five, Monday to Friday, 52 weeks of the year with four or five weeks’ holiday. In many cases, these are highly trained and experienced professionals who might be in short supply.

Secondly, it helps turn labour costs from a fixed cost to a semi-fixed cost - that is to say, the amount (and hence the cost of labour) can be altered to meet changing levels of output.

As students of Economics, we value supply side policies that encourage more flexible working practices since it increases the potential size and quality of the workforce and helps firms control costs, thereby making firms more competitive.

There is a pssible ‘dark’ side to this however, as explained by the TUC’s Brendan Barber, who said: “Last month’s fall in unemployment was a welcome surprise. No-one should be under any illusion however that the jobs crisis is over. Virtually all employment growth is coming from part-time and temporary jobs but most of the people taking them want and need permanent, full-time work.”

“Any job may be better than no job at all but people are having to make huge salary sacrifices to stay working. This is bad news for family finances and it is holding back our economy. Any hope of an economic recovery that benefits everyone rests on the growth of well-paid, skilled, full-time jobs. It is the only way for people to increase their incomes and get back to working to the best of their ability.”

“Proper jobs growth, rather than self-defeating austerity and making work even more insecure by attacking basic employment rights, must be the Government’s top priority.”

Under-employment’ is a possible evaluative point when discussion the merits of flexible working practices and when looking at unemployment figures. The fact that someone has a job does not mean that they are fully utilised; they may only be working part time and hence earning far below their full value as a full time employee. When looking at employment data it is important to be critical - just as it is with every other kind of data. In this case, it can be useful to consider the ‘quality’ of the work that is being done in terms of hours of work, rate of pay and whether it makes full use of workers’ skills and qualifications. A move towards flexible working can mean that many workers are substantially under-utilised, do not earn a good enough rate of pay and hence cannot enjoy a good standard of living.