11:19 AM Friday Mar 6, 2015
Expect to hear more about zero-hour contracts as big businesses cry poor, ultimately costing taxpayers
The word of the moment in workplace relations is flexibility.
We aren’t talking about actual flexibility, where you can touch your toes. We’re not even referring to the type of flexibility that allows a person to have a home life and a work life and not end up a mangled mess trying to do both.
We are solely talking about flexibility for our business community, our poor harried employers, as they strive to keep themselves afloat in flat economic times by being able to expect employees to turn up to as little as one hour of work a week; a.k.a zero-hour contracts.
Employment Minister Michael Woodhouse has employed the term liberally already, and no doubt he’ll wheel it out on several more occasions. Wait to hear it too, again and again, from anyone defending the right of companies to operate according to the intent of the Employment Relations Amendment Act passed last year, where they were granted almost complete carte blanche to dictate the working relationship.
Not only does the increase in the use of zero-hour contracts allow companies complete flexibility; they also have the advantage of roping the taxpayer into subsidising the shortfall when workers can’t pay their bills.
These contracts also help by making our job market appear to be booming, which may cast a little light and shade on the rosy labour force participation figures we were treated to in February, with a leap in the number of jobs.
It is the true quality of those jobs that the data didn’t address – and it should, given the strange situation that someone working as little as one hour a week can be treated, by statistics, as someone with a fulltime job.
Much is made of the fact zero-hour contracts benefit small businesses that can tailor their workforce to the peaks and troughs of trade but of course it is the largest business concerns that have embraced these contracts with vigour.
McDonald’s, Restaurant Brands (Pizza Hutt, KFC, Starbucks, etc), Wendy’s and Burger King use them, increasingly frequently, as do companies like SkyCity. Food concerns belong to powerful lobby groups that seem to have lots of access to ministers of the Crown, while we all know SkyCity and the Government get on famously behind closed doors.
It will be entertaining to see the Government grappling with how to curb the excesses of the “few bad employers”, who also happen to be their buddies.
To be fair, our own fast food joints are simply following trends set by their parent companies overseas.
In the UK, according to the Guardian, more than one million people are now on zero-hour contracts – a jump of 100,000 in just a year. At McDonald’s, 90 per cent of the staff are now hired on the terms, while Subway, Burger King, Domino’s and so forth are also avid zero-hour hirers.
In America, zero-hour contracts have not had quite the same spread as yet, but then again, the federal minimum wage is pitifully low – US$7.25 ($9.60) an hour, the same as it’s been since 2007 – and protections are few. That’s in no small part due to the National Restaurant Association (McDonald’s, Wendy’s, Burger King, etc) spending almost US$1.3 million a year in lobbying politicians to keep wages down. Lately, they’ve also been lobbying to allow restaurants across the US to accept food stamps.
The worst thing about this type of corporatism is that it is ultimately taxpayer subsidised. According to Michele Simon of Al Jazeera, McDonald’s made a US$5.5 billion profit in 2012 – but cost the US taxpayer US$1.2 billion in benefits to cover low wages.
We may not have the same well-heeled lobbying machine, but watch for similar lines of argument in support of our low-wage, zero-hour contracted workers – claims that small businesses, the engine of the economy, require zero-contract hours to stay afloat. That big business simply can’t afford it, which seems like a lie when you consider how much executives in these companies are paid. That their zero-hour workers are unskilled, young, or both – ignoring the many of them with dependents.
Mr Woodhouse has a chance to really prove his chops in the middle of this year, when he moves beyond his current solutions – go to get Winz help, find another job – to introducing new legislation that will curb the worst excesses of zero-hours practices.
Let’s just hope he’s not overly flexible about it.
Dita De Boni is a columnist, commentator and TV producer/journalist. She first wrote columns for the NZ Herald in 1995, moving to daily business news in 1999 for four years, and then to TVNZ in Business, News and Current Affairs. After tiring of the parenting/blogging beat for the Herald Online she moved back to her first love, business (with a politics chaser), writing a column for Friday Business since 2012.