November 24, 2014

UK puts forth proposal to reduce exploitation of temp workers

The UK’s Labour leader Ed Miliband has outlined measures to tackle "rogue employment agencies," in acknowledgement of the rapidly rising number of temporary workers in the nation.

The UK has seen a 20% increase in the number of temporary agency workers over the past year, and a 36% overall increase since 2009. This is the highest level the nation has seen since 1997.

The proposed measures will ban exclusive recruitment of overseas workers and close loopholes that allow employers to undercut the wages of permanent staff.

Miliband said: "Many employment agencies play their part in supporting businesses, as well as workers, who want flexibility. But there is now overwhelming evidence that some are operating in the shadows of our economy and on the margins of the law."

IZA World of Labor authors have discussed the labor market effects of temporary contracts, when they are implemented properly. Susan N. Houseman has acknowledged that they improve a person’s employment prospects and earnings in the short-term, and can act as a pathway to certain high-paying jobs such as those in manufacturing. However, she notes that they do not generally operate as a stepping-stone to regular employment.

Werner Eichhorst takes this point further. He suggests that fixed-term contracts can be a stepping stone to permanent employment, but the likelihood of this is reduced when there is a strong degree of segmentation in the labor markets.

Read more here.

Related articles,
Temporary agency work, by Susan N. Houseman
Fixed-term contracts, by Werner Eichhorst
Short-time work compensations and employment, by Pierre Cahuc