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How the gig economy is widening racial inequality

Of the 1.1 million people on zero-hour contracts, a quarter are black and ethnic minority workers.

This week, the government has responded to the Taylor review, commissioned by the Prime Minister, on modern day employment practices, with a strong focus on the “gig economy”. Under this government, the gig economy has grown substantially from around 200,000 people on zero-hour contracts in 2011 to approx. 1.1m in 2017. The employment practice encompasses a variety of short term, freelance, “casual gig” or zero hour contracts through “touch-of-an-app services” such as Uber, Deliveroo, Hermes and Yodel. 

The gig economy numbers and diverse demographics are worth reflecting on. Unlike other employment sectors, there are higher proportions of young people (approx. a third compared to one in ten in non-zero hour jobs), people in full-time education (approximately a fifth of the workforce) and in part-time work (some 65 per cent of the workforce compared to 26 per cent of part-time workers in non-zero hour work). That suggests that the gig economy has addressed a gap in the labour market that is not necessarily accessible in the traditional employment sector.

But evidence now suggests that the emphasis on “freedom of choice and flexibility” has been oversold, masking considerable differences between worker groups and blurring the distinctions between “positive choices” and “enforced choices” The cases of exploitation and unethical working practices have become the norm. The Sports Direct warehouse scandal in 2016 where workers were paid less than the minimum wage now seem to pale into comparison with the sad and tragic death of Don Lane. The parcel courier, who had diabetes, did not take time off to attend vital medical appointments because of the pressure he felt to find cover for his round or face the threat of a £150 fine each day. 

If the idea of“flexibility and choice” is now being widely debated, there is another less discussed feature of the gig economy: race. Of the 1.1 million people on zero-hour contracts, a quarter are black and ethnic minority workers. Black workers are twice as likely to be on zero-hour contracts compared to their white peers. A report by the TUC in 2015 noted a sharp rise in the number of black women in particular on zero hour contracts over the recent years. This matters because we know that there is racial discrimination in the traditional labour market, with BME people twice, and sometimes three times more likely to be unemployed compared to their white counterparts. A significant growth of BME people in the gig economy is therefore not an accident or necessarily by choice.

This is problematic. A key reason Matthew Taylor was asked to review the gig economy is because it represented a growing sector where there were well-founded concerns about a lack of rights and entitlements, a lack of guaranteed hours and increasing evidence of workers being paid lower wages (after you factor in commission back to the employer, maintenance costs and so on).

For black and ethnic minority workers in this sector, this has substantial implications because not only are they excluded from the traditional labour market because of discrimination, but now they are more likely to be pushed into an employment sector where there is less financial security and less opportunities for progression. This matters because BME people are already affected by substantial structural inequalities: they are more likely to live in poorer households, more likely to face multiple disadvantages in the labour market (race, gender and religious discrimination) and more likely to have higher rates of child poverty in their households than white groups. Recent analysis by the Runnymede Trust and the Women’s Budget Group on the impact of budget and austerity cuts also shows that BME people, and BME women in particular, are the worse hit by the cuts. The gig economy is exacerbating structural inequalities between racial groups.

BME young people, BME fathers and BME part-time mothers with caring responsibilities now face more insecurity about their income, more unpredictable hours and less able to make plans for the next week, let alone the next several months. More importantly, because of the lack of guaranteed hours and income, they are less able to get a rental contract, or even a mobile phone contract, let alone apply for a mortgage.

The government has a dilemma. In 2016 Theresa May spoke passionately about addressing the “burning injustices” in society, and launched the Race Disparity Audit, a review of how people from different ethnic and racial backgrounds are treated. Yet simultaneously there has been a growth of a two-tier labour market system, that is not only divided by worrying working conditions, but also by race.

The government’s response to the Taylor review is to enforce holiday and sick pay entitlements, give all workers the right to demand a payslip and allow workers to demand more stable contracts. However, the question remains whether this goes far enough to protect vulnerable and BME workers, who are increasingly working in a two-tier labour market system which is evidently open to exploitation, no guarantees of a job, low prospects and enormous financial insecurity. Without addressing these racial disparity issues, the employment gap, pay and long term prospects between different racial groups will not only remain entrenched, they will widen.

Dr Zubaida Haque is Research Associate at the Runnymede Trust. She tweets at @zubhaque.

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Tackling tuition fees may not be the vote-winner the government is hoping for

In theory, Theresa May is right to try to match Labour’s policy. But could it work?

Part of the art of politics is to increase the importance of the issues you win on and to decrease or neutralise the importance of the issues your opponent wins on. That's part of why Labour will continue to major on police cuts, as a device to make the usually Labour-unfriendly territory of security more perilous for the Tories.

One of the advantages the Conservatives have is that they are in government – I know it doesn't always look like it – and so they can do a lot more to decrease the importance of Labour's issues than the Opposition can do to theirs.

So the theory of Theresa May's big speech today on higher education funding and her announcement of a government review into the future of the university system is sound. Tuition fees are an area that Labour win on, so it makes sense to find a way to neutralise the issue.

Except there are a couple of problems with May's approach. The first is that she has managed to find a way to make a simple political question incredibly difficult for herself. The Labour offer is “no tuition fees”, so the Conservatives essentially either need to match that or move on. But the one option that has been left off the table is abolition, the only policy lever that could match Labour electorally.

The second, even bigger problem is that it it turns out that tuition fees might not have been the big election-moving event that we initially thought they were. The British Electoral Survey caused an earthquake of their own by finding that the “youthquake” – the increase in turn-out among 18-24-year-olds – never happened. Younger voters were decisive, both in how they switched to Labour and in the overall increase in turnout among younger voters, but it was in that slightly older 25-35 bracket (and indeed the 35-45 one as well) that the big action occurred.

There is an astonishingly powerful belief among the Conservative grassroots, such as it is, that Jeremy Corbyn's NME interview in which the he said that existing tuition fee debt would be “dealt with” was decisive. That belief, I'm told, extends all the way up to May's press chief, Robbie Gibb. Gibb is the subject of increasing concern among Tory MPs and ministers, who regularly ask journalists what they make of Robbie, if Robbie is doing alright, before revealing that they find his preoccupations – Venezuela, Corbyn's supposed pledge to abolish tuition fee debt – troublingly marginal.

Because the third problem is that any policy action on tuition fees comes at a huge cost to the Treasury, a cost that could be spent easing the pressures on the NHS, which could neutralise a Labour strength, or the financial strains on schools, another area of Labour strength. Both of which are of far greater concern to the average thirtysomething than what anyone says or does about tuition fees.

Small wonder that Team Corbyn are in an ebullient mood as Parliament returns from recess.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.