How welfare supports the ‘gig economy’

Living on benefits, I have realised Universal Credit suits our precarious labour market very well. It’s exploitation, stupid!

Last Friday, I was sent to a jobs fair by my work coach. The fair was at another job centre a short bus ride away. There, the claimants waited patiently, and some impatiently, to speak with seated representatives of various companies and public bodies. I found long queues for the local council — offering admin jobs and other opportunities — and nonexistent queues for tutoring and personal training (I went for the former).

Apart from admin roles, tutoring and personal training, the fair had desks for construction work, retail, catering, even health and social care. Names of brands caught my eye: Westfield, Nando’s and Tesco. It got me wondering. How much of this is about what the employers want? Take a guess. Here we are, the reserve army of labour, queuing to sell our time and our skills to would-be employers. Is this really what the unemployed need?

Of course, there was a catch: if I failed to attend the jobs fair, I would face the possibility of my benefits being slashed to £10 a week for up to 90 days. This is what’s called a ‘sanction’. Once at the fair, you queue to talk to the reps, sign up in the hope of an interview and they sign you off for having applied for a job. It’s unclear how much of this is about paper-shuffling. A cynic would suspect quite a lot.

However, this is not a worry in itself. I suppose some people may find a job this way, and I might even be starting out in some temporary arrangement. But it is an example of something else. The work coaches are eager to get claimants to sign up for agency work, which will provide temporary employment and sometimes ‘self-employed’ or ‘free-lance’ contracts. I’ve worked these before. It can leave you at the beck and call of a company.

If you’re on Universal Credit and working you can keep 35p for every pound you make. That’s £35 for every £100 (in theory). I’ve yet to find out if this system works (in practice), but it sounds like it could serve as a transition back to full-time work. It’s meant to ‘wean’ the claimant off of the public teat. So you re-enter the labour market and never return. This may help reduce the official figures of unemployed too.

There is an industry in waiting for the jobless. The ‘gig economy’ — so-called for its offer of work on ‘self-employed’ contracts, such as Deliveroo and Uber— is eager to gobble up cheap labour. These types of flexible contracts leave workers with their rights undermined, including the minimum wage, sick pay and holidays. It shows just how fragile these protections have become. And maybe this is why unemployment is officially falling.

At the time of writing, unemployment stands at 4.8% and, at least on paper, the UK has reached an employment level of 73%. This is the highest since records began in the early 1970s. Naturally, Tories like Toby Young love to play this up as an achievement for the right. Yet the lowest unemployment rate on record was at 3.4% in 1973. Those were the days when governments aimed for ‘full employment’.

Although employment is officially high, real wages have fallen by more than 10% in less than a decade. The TUC found that the wages have continued to stagnate, leading to a fall of 10.4% from 2007 to 2015. The UK is now alongside Greece in terms of shit pay for a hard day’s work. Even Poland has seen real wages increase by more than Britain. Meanwhile the super-rich continue to pig-out, with their salaries hitting £5.5 million.

It looks like the job centres are pushing claimants into short-term, low paid jobs — only for them to be kept on a lower rate of benefits. The government gets to say unemployment is falling, while the reasons for people falling out of work are worse than ever. As we’ve established, Universal Credit isn’t much of a cushion to land on, especially with the ‘sanctions’ regime of benefits. No wonder most people would rather be rinsed by the ‘gig economy’.