The Resolution Foundation has a new report out on the earnings of the self-employed. As they note:
Our analysis finds that self-employed weekly earnings are 20 per cent lower than they were in 2006-07, while employee earnings have fallen by just 6 per cent. The drop has been seen across genders and industries but is particularly notable among people of prime earning age (35 to 50 years old) whose earnings are 26 per cent lower. As a result, the typical self-employed person now earns 40 per cent less than the typical employed person.
My own research, based on HMRC and ONS data, indicates similar trends.
When this is happening at the same time as many new employments are zero hours based what the government is doing is forcing the burden of risk bearing onto those least bale to bear it in society - that is those with the lowest income. So just as we now know inequality, especially concerning wealth, is rising rapidly, insecurity is also increasing exponentially as risk is being passed from those with the capacity to bear it to those who have not.
When somebody asks you why wealth inequality matters it is this capacity to bear risk that has to be a major part of the answer. A rapidly diminishing number of people have that capacity in our society and yet the government is demanding that more and more people bear that risk themselves as the safety net of social security is withdrawn.
This is why action to tackle inequality is needed, and it has to start with a living wage that provides freedom from fear. That's the exact opposite of what this government is offering.
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Inevitably Richard, people as I do here will raise the issue of possible ‘under-reporting’ of income by the self employed which of course also raises tax issues too. And clearly punters will collude & avoid VAT at 20%. Anecdotally in my neck of the woods- Herts- admittedly outside London it seems that the trades folk who appear to being doing well for example small builders, small businesses, electricians – just about anyone who comes to ‘fix’ something. So at our local school its typically large black 4*4s which clog up the street and I know these are not public sector employees. Similarly across the South East its evident a lot of extensions, alterations,landscaping etc., is going on. So in sum there is some money flowing around – is it be recorded appropriately.
FCFT has an excellent post on SE:
http://flipchartfairytales.wordpress.com/2014/05/01/self-employment-going-south/
http://flipchartfairytales.wordpress.com/2014/04/25/self-employed-the-nouveau-pauvre/
¨Basically, declaring self-employment permits you to stop the abuse, permits the Work Programme chancer to bill the government, permits the Jobcentre Plus caseworker to close the file and therefore happy their manager up, and lets you claim Working Tax Credit. If you have kids, you also get additional tax credits in respect of this, which means that you may actually be better off than on JSA. The regulations sort-of get this, giving the DWP the power to bother you to do more hours — therefore pushing you to declare full-time¨
According to the IFS/Joseph Rowntree Foundation and the OECD, inequality as measured by the Gini co-efficient has fallen since the coalition came to power. How does this square with your headline?
The data covered to 2011-12
Hardly enough to support your claim
And Gini is just one estimate, in this case impacted by estimated falls in high end worth post crash, now more than fully recovered
OECD data covers 2013 as well – the last available data. That again shows a small drop. Inequality might rise again, but up till now, it has fallen under the coalition whilst rising under Labour – as did relative poverty.
What are you using other than the Gini to show that inequality has risen under the coalition?
It might be politically convenient to blame rising inequality on the coalition, but you actually have to back that up with hard data.
As I said Gini is one measure
“As I said Gini is one measure”
I understand that. What I asked was which measure do you use?
Any number of the innumerable reports that confirm otherwise
You can use Google too
Danny B -I think Richard covered this issue in another blog (can’t remember when) when someone brought the Gini thing up -however the Joseph Rowntree report in inequality (last year) clearly states that income forestalling will clearly add to rising inequality as we speak.