Flexible workers: the biggest risks on the labour market and the least resilience
One fifth of the 1.9 million Dutch workers employed on flexible labour contracts have neither savings nor a partner in work they can fall back on if they lose their source of income. Yet it is precisely these workers, employed as they are on temporary or zero-hours contracts or by temping agencies, who most need this type of buffer. They are far more likely to encounter a period of unemployment than the 4.8 million workers on permanent labour contracts.
This is the conclusion drawn by the Netherlands Court of Audit on the basis of a comparative study of the personal safety nets available to the self-employed and people employed on either flexible or permanent contracts of employment. The study involved analysing data on all almost 8 million working people in the Netherlands over a period of eight years (from 2010 to the end of 2017). The study showed that temporary contracts of employment formed the main source of income for 1.9 million people for most of this period. For a further 1.2 million people, income from self-employment was their main source of income.
An analysis of the data shows that the vast majority of workers, viz. almost 90%, have enough savings of their own to make up for any temporary loss of income. This means, however, that one million workers are not in a position to do so, because they have less than €1,000 in savings and also cannot fall back on a partner’s income if they are not in work. This figure of one million consists of 9% of the self-employed (100,000 people in total), 10% of workers on permanent contracts (469,000 people) and 20% of those employed under flexible labour contracts (379,000 people).
Certain groups of workers employed on temporary contracts are even less likely to have sufficient resources to fall back on if they lose their source of income. This is true of 33% of low-skilled workers, 32% of workers from a non-Western migration background and 30% of workers employed by temping agencies.
20% of workers on flexible contracts do not have any buffer of their own to make up for a loss of income
The Court of Audit hopes that these findings will provide input for the debate on labour market flexibility and social security for people in work. This debate was given a fresh impulse earlier on this year with the publication of recommendations both by the Committee on the Regulation of the Labour Market, chaired by Hans Borstlap, and by the Scientific Council for Government Policy. In its response to these reports (published on 11 November), the government said that it was paving the way for the next government to act on the recommendations.
The study sheds new light on the composition of the group of 1.9 million workers on flexible contracts. They are generally very young when compared with the self-employed and people working on permanent contracts, i.e. the majority of workers on flexible contracts are under 35. At the same time, it is by no means customary for young people to start their careers by working on flexible labour contracts and not building up any buffers, and to catch up with workers on permanent contracts and the self-employed at a later stage.
The Court of Audit stresses that two out of every five workers on flexible contracts are aged between 35 and 65. These 800,000 workers consistently work under temporary contracts. Invariably, they do not save as much as their peers who are employed under permanent contracts or who run their own businesses. Of these 800,000 workers, 135,000 have neither any savings to fall back on if they lose their source of income, nor a partner in work who can support them.