A “FUNDAMENTALLY new approach” to Britain’s labour market is needed to address job insecurity and stagnant wages among young workers, according to a report published today.

The Resolution Foundation think tank is calling for a “better jobs deal” to avoid leaving “even deeper scars on young people’s careers” caused by “spending long periods in insecure and low-paid work.”

The report for Intergenerational Commission, The Kids Aren’t Alright, recommends guaranteeing zero-hours workers a fixed-hours contract after three months, introducing a minimum notification period for shifts and protections for workers turning down non-guaranteed hours.

The report found that younger workers were those “most affected” by the rise of insecure work, with more than half of people on zero-hours contracts aged 16 to 34.

It suggested the government impose a “payroll levy” on PAYE-registered companies using self-employed labour to “discourage firms from using self-employed contractors.”

It also suggests extending statutory maternity and paternity pay, as well as contributory jobseeker’s allowance, to the self-employed, so that self-employed workers do not “miss out on the rights and benefits enjoyed by employees.”

Stephen Clarke, senior economic analyst at the Resolution Foundation, called for a “sea change” in the government’s approach to work and workers.

He said: “The old approach helped ensure that the Great Recession didn't hit us with the level of long-term unemployment seen in the recessions of the early 1980s and ’90s.

“But instead we’ve been presented with new challenges – a triple whammy of stagnating wages, insecure work and too many young people not feeling able to take up opportunities to move on and progress.

“Dole queues have been replaced by hidden insecurity and stagnant wages. The challenge is no longer just getting young people into work but increasing the security they have in that work and giving them the confidence and support to move jobs if that's what they want to do.”

TUC general secretary Frances O’Grady responded to the report by saying that there needs to be more union representation among young workers in insecure jobs.

She said: “Low pay and insecure work has become the new normal for lots of young people. Many feel trapped in dead-end jobs that offer no career progression.”