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Gig economy and zero hours contracts causing more in-work poverty, says National Assembly Committee


Modern employment practices such as the gig economy and zero hours contracts mean more people in Wales are struggling to make ends meet, according to a new report from a National Assembly committee.

The Equality, Local Government and Communities Committee has been looking at how the economy should benefit people on low incomes.

It concludes that the casualisation of work has left many unable to rely on a regular source of income, and struggling to cope with low incomes.

In recognising that employment law is outside the Welsh Government's control, the committee has recommended ministers should not lend support, through contracts, grants or loans, to companies which use zero hour contracts. The Government should also incentivise firms to pay the voluntary living wage of £8.75 per hour, which is above the national living wage of £7.83 per hour.

The Committee also reiterates a recommendation from a previous report for a new overarching tackling poverty strategy in Wales. The Welsh Government turned down the recommendation from an inquiry into its Communities First scheme, claiming tackling poverty would be mainstreamed across all departments.

But the evidence taken by the Committee has led Members to stress the need for a dedicated strategy.

Another recommendation is to require firms with 50-249 employees in receipt of Welsh Government support to publish gender pay gap data. Current legislation requires organisations with 250 or more employees to publish data.

"We all believe in the importance of work, not just as a means of supplying income, but the broader benefits of work for an individual, their family and their community," said John Griffiths AM, Chair of the Equality, Local Government and Communities Committee.

"However, changes to employment practices and the types of work that are available are driving up levels of in-work poverty. This is unacceptable.

"As some of the policy levers that can help address this are outside of the Welsh Government's control, we call for them to use the powers they have creatively, to ensure that people living in Wales have access to good quality work which pays a decent wage."

The Committee makes 23 recommendations in its report, including:

  • That the Welsh Government place requirements on any company receiving Welsh Government support through funding covered by the Economic Contract or otherwise to minimise the use of zero hours contracts;

  • That the Welsh Government develop a broad and wide-reaching campaign to encourage payment of the voluntary living wage within both the private and public sector in Wales; and,

  • That the Welsh Government place a requirement on all companies, with between 50-249 employees, who receive support as part of the Economic Contract to publish data on their gender pay gaps.




Read the full report:

Making the economy work for people on low incomes (PDF, 980 KB)




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