Sir, – The Irish Times reports that the use by employers of zero-hour and low-hour work contracts is to be investigated ("University of Limerick appointed to investigate zero-hour contracts", February 9th). This is to be welcomed.
We accept unnecessary trade-offs in our everyday lives, many of which have undesirable welfare outcomes.
Many business leaders believe that companies cannot pay good wages and yet be profitable. This is untrue.
Jobs on subsistence wages, with few benefits, no training, and chaotic schedules are bad jobs.
Bad jobs create problems. They do not provide enough money to make ends meet, nor do they provide security and stability for a sane family life.
Companies that provide bad jobs treat workers as expenses to be minimised rather than as assets to be developed. For workers in bad jobs, such as those to be investigated, dignity, personal satisfaction and the freedom to obtain a decent full-time income do not exist.
By encouraging a wage-cost focus, customers come to expect and tolerate poor service and low-quality goods. In addition, taxpayers subsidise these low-wage companies because their badly paid workers require assistance from the public purse.
A further consequence is that this unintended subsidy becomes an incentive for low wage, zero-hour contract employers to continue poor management practices that result in long-term damage to their companies. Subsistence wages thus make it more difficult, not easier, to compete.
Good jobs provide good pay, benefits and predictable work schedules and the chance to grow through continuous improvement and personal development.
There is nothing altruistic here. Good jobs provide superior benefits to the company and its investors in the longer term.
Many successful companies reject the trade-off between wages and profits but instead shift the productivity frontier outwards, thereby providing more value to all parties.
It is time to reject the conventional wisdom that there is a necessary trade-off between wages and profits.
To increase productivity, companies need to innovate on value and focus on the worker as an asset, not as a cost.
Successful companies are creative and invest in people to provide service for customers and high returns for investors. – Yours, etc,
Prof FRANK BRADLEY,
Emeritus Professor
of Marketing;
UCD Michael Smurfit
Graduate Business School,
University College Dublin,
Blackrock,
Co Dublin.