Working well?

The publication yesterday of the Taylor Review of Modern Working Practices, an examination of working conditions across the UK economy, has sparked debate about what a fair deal for flexible workers would look like. There are now 1.3 million people working in the ‘gig’ economy, who log on to a platform like Uber or Deliveroo whenever they want to, and get paid for just the hours they work.

There has been much debate over where these workers fit in the traditional dichotomy of employment and self-employment. They choose their own hours – like someone who is self-employed – but, like an employee, have a long-term relationship with a person providing and coordinating their work. Nearly a million more people are employed on zero-hours contracts with no guaranteed hours or earnings.

For some people living with mental health problems, flexible work can be a valuable way to earn money and stay in touch with the labour market – working more hours when they are well and fitting work around other demands like medical appointments. For others, however, not knowing when you will be working or what you will be able to earn is another source of stress.

The Review proposes some solutions, like making ‘gig’ economy workers ‘dependent contractors’, ensuring they receive paid holiday and sick leave, but without some of the other protections offered to employees. People employed on zero hours contracts could also be allowed to formalise their working hours if a clear pattern emerges, and could be offered a higher minimum wage to recognise the additional flexibility they provide to businesses.

These proposals are just the start of what is likely to be a long discussion about how to balance the tradeoff between flexibility and responsibility, both for workers and employers.

One factor that the review pays relatively little attention to, however, is the importance of a stable income. If you don’t know how many hours you will be working each week, or how much you will be able to earn, it is very difficult to plan ahead and make sure there’s cash to pay the bills. Not knowing what is going to be in your account when can even make life more expensive – it might mean you are unable to pay energy or telecoms bills by direct debit, and so pay higher prices, or that you end up accidentally missing a payment and facing a fee.

A regular income is as important to people as their level of pay, and is crucial to making sure we feel safe and secure. Evidence suggests that going without this this can have a negative impact on our mental health – research by UCL shows that young adults who are employed on zero-hours contracts are at higher risk of poor mental health than those with stable jobs.

The Government may have a role to play in following through some of the Taylor Review recommendations, or finding alternatives, which help provide people who offer flexible labour to companies with suitable compensation for the security they give up. Another set of options might be to look at ways we can make it easier for people to manage their bills on a variable income, as this becomes more common.

To start with, companies employing people on zero hours contracts or using ‘dependent contractors’ could provide tools which help people to ‘smooth’ their income – saving the extra through fat months, and drawing down savings in lean times. Some fintech firms are already starting to design tools that help people with irregular earnings to manage their money more effectively. BACs, who are responsible for Direct Debits in the UK, are also exploring ways to make this payment system more flexible, for example letting customers choose the frequency and date of payments, and offering warnings before money is withdrawn to pay bills.

These innovations are entirely within the realms of technical possibility. They’re not going to fix the complex labour market situation, but they could help to avoid associated financial difficulties and reduce the strain irregular work can place on our mental health.