Economics
In the News
Monopsony - Pay Penalty for Zero Hours Contract Workers
30th December 2016
A new report from the Resolution Foundation finds a significant pay gap between workers on regular employment contracts and those on zero-hours (ZH) employment deals.
New: Zero-hours contract workers face a ‘precarious pay penalty’ of £1,000 a year https://t.co/WOBmMNa0y6
— Resolution Foundation (@resfoundation) December 30, 2016
Nearly 900,000 workers - just under 3 per cent of the employed work force) are on zero hours contracts. They have been in the spotlight recently and caught up with the poor working conditions exposed at Sports Direct and JD Sports.
Whilst many of these jobs are concentrated in relatively low-paid jobs, the Foundation’s analysis compares the pay of ZHC and non-ZHC workers with similar characteristics and doing similar jobs. It does this by controlling for factors including the worker’s gender, age, experience, qualification level, their occupation, the industry they work in and how long they’ve been in their current job. These factors explain around four-fifths of the overall pay gap between ZHC workers and other employees.
This leaves a pay gap of around 20% - equivalent to 90 pence per hour.
To what extent is this explained by the monopsony power of large-scale employers such as Sports Direct and Amazon who use their "buying power" in the labour market to hold wages down?
Number of care workers on zero-hours contracts jumps to one in seven https://t.co/LIrtAR44o8
— The Guardian (@guardian) November 17, 2016
Find more statistics at Statista
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