Unemployment at lowest rate since 1975 but zero-hours contracts soar

Posted On: 
15th March 2017

The unemployment rate has fallen to its lowest level since 1975 but the number of people working on zero-hours contracts has rocketed, official figures revealed today.

Employment minister Damian Hinds welcomed the "good news for hardworking families"
PA Images

The Office for National Statistics said those out of work fell by 31,000 in the three months to January.

But the official stats office also revealed the number of those in work but not guaranteed any hours had shot up by 101,000 in the year to December.

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Pay growth also fell to 2.2% in the three months to January 2017 compared with the same period 12 months before, when it was 2.6%.

There were 31.85 million people in work in the three months to January, 92,000 more than for August to October 2016 and 315,000 more than for a year earlier, the ONS said.

The proportion of those of working age who were actually in work stood at 74.6% - the joint highest rate since comparable records began in 1971.

And there were 1.58 million unemployed in the period, some 106,000 fewer compared with the year before and just 4.7% of those in working age - the lowest rate for more than 40 years.

ONS senior statistician David Freeman said: “With the unemployment rate last lower in summer 1975 and the employment rate still at a record high, the labour market remains robust.

“But smaller wage increases and higher inflation mean the growth in real earnings has slowed sharply in recent months.” 

Employment Minister Damian Hinds boasted: “This is good news for hardworking families across the UK as we continue to build a country that works for everyone.

“But we have more to do, which is why we’re pressing ahead with our welfare reforms to ensure that it always pays to be in work.”


Meanwhile, there were 905,000 people on zero-hours contracts in their main job between October and December 2016, compared with 804,000 for the same period the year before.

Those on the contracts - which guarantee no hours and few working rights - were more likely to be young, part-time women or in full education, the ONS said.

On average they were usually working 25 hours a week, with 32% saying they wanted more hours. In comparison just 9% of people in regular employment wanted more hours.

TUC general secretary Frances O’Grady fumed: “Zero-hours contracts allow bosses to treat workers like disposable labour.”

She added: “If you’re on a zero-hours contract you have no guarantee of work from one day to another.

"Put a foot wrong and you can be let go in a heartbeat. Turn down a shift because your kid’s sick and you can be left with little or no work.”

And she branded the contracts a “huge drain on the public services”, costing the exchequer £2bn a year in lower tax and national insurance revenues and more in tax credits claims.


Elsewhere, the number of people working in central government hit the highest level since comparable records began in 1999, rising by 27,000 in the four months to December 2016 to reach almost three million.

But public sector employment overall was 8,000 lower in December compared with the year before, with local government employment dropping by 24,000 in the final four months of the year.

Overall, local government employment stood at 2.2 million - the lowest since comparable records began in 1999 - with many of the jobs shifting to central government due to local authority schools converting to academy status.