I've been self employed for thirty years. My total employment career lasted just the minimum five needed to secure all my accounting qualifications. Then I was off. I always wanted to be my own boss and I'd recommend self employment to anyone who feels the same way.
The trouble is that we know that self-employment is rising dramatically in the UK economy at present. Something like 80% of all the new jobs created since 2010 are, in fact, self-employments, and there are a number of things that very significantly differentiate self-employments from jobs.
The first is security: there is none.
The second is durability: vast numbers of new small businesses fail, which is one reason why I doubt the official statistics. I am sure they record the supposed start-ups correctly but seriously doubt if they have properly counted the failures.
Then there is the issue of pay. The evidence is overwhelming that in recent years earnings from self-employment have, on average, declined significantly. My own work on this based on ONS data, published last November, showed the following trend:
Labour has now picked up on this, and rightly so. They suggest that earnings are falling by an average of £2000 a year, which is more than my data suggests.
However viewed, what is important is that this significant trend in the UK economy, which is suppressing productivity because very few of these jobs are matched by any capital intensity, and which is potentially distorting both unemployment and earnings data, now be fully embraced by the ONS to ensure that appropriate data is available on which macro and micro economic decisions in the UK are made.
What is also important is that it be understood that a very great many of those who are currently self-employed have not adopted this role by choice, but out of necessity. I very much doubt that there is any significant increase in the real underlying trend of those who wish to run their own businesses in the UK that has suddenly become apparent because of the recession. That just seems too unlikely to be true. And if that is the case then the fact that these people are self employed now does not mean that they do not want what they might consider to be 'real jobs' in the future if they can get them. There is no excuse for taking the foot of government investment programmes to create those higher paid, more secure and stable jobs as a result. I strongly suspect that they are what people want.
Self employment is great if that's what you want. If you don't but it's all you can get I suspect it is a cause of constant stress. That is no solution for our economy or for the people of this country. For those who really want to be employed we have to aim to make that option available. That means the current trend is likely to be a blip in the statistics in my opinion. Let's not forget that possibility or we will make some really serious errors of economic judgement.
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You should read your TUC notes that come with the cheque more carefully!
http://touchstoneblog.org.uk/2014/04/more-than-two-in-five-new-jobs-created-since-mid-2010-have-been-self-employed/
It is actually half the number you claim at 44% of jobs self employed since 2010 according to the TUC……….
The 80% number is only for the last six months, not a long enough period to draw any trends!
The number varies depending on how measured, of course
The trend is strong and upward
That’s enough for my argument’s sake
Seriously?………You claim 80% as a number supporting your claims, then it is actually 44%…….nearly half your claim……….and the answer is so what?……….It’s up and that is good enough!
Let’s get real here……44% is not 80%……….and you would not accept that big a difference from someone posting a comment.
I said they are different measures
it’s easy to get the unemployment figures down and create a fictional ‘self-employment’ culture:
1) Create draconian benefit rule changes.
2) Sanction just under 900,000 people in one year (2013) including the sick and vulnerable.
3)Threaten people with homelessness and food banks if they don’t magically become entrepreneurs (no support or training given).
4) Hey presto! You’ve got a jobless recovery.
It’s magic!
nail on the head.
the back-to-work scheme providers (A4e, etc) have been coaching the unemployed how to ‘scam’ the system by switching from Jobseekers Allowance to pseudo-self-employment in order to claim Tax Credits; pretend you work from home on E-bay, declare a meager income and collect £50-odd quid a week in Tax Credits (£20 less than JSA but with no threat of sanctions).
The really sick part comes when Universal Credit comes to said claimant’s area. They get an initial assessment and if their self-employment (real or otherwise) did not provide them with a minimum £957/month (and most don’t) then they’re told they were never actually entitled to any Tax Credits. And so they have to pay it all back! Out of what, I’m not sure; if these people had any money or prospect of employment to start with they wouldn’t have been scraping by on £50 a week for however long.
Baring in mind Universal Credit has only hit 17000 benefit claimants so far, you can see the potential shit storm on the horizon. I wonder whether it’s part of the reason HMRC is now allowed to dip into bank accounts; so that as soon as people get their benefits they can be snatched by HMRC to repay Tax Credit debts?
Where’s the data on that £957 a month etc?
I have not seen this publicised
It needs to be
@Richard
£957/month is based on what government call ‘minimum income floor’ (referred to in leg. as equivalent of working 35 hours a week at National Minimum Wage). Page 9 of following:
http://www.legislation.gov.uk/ukdsi/2013/9780111531938/pdfs/ukdsiem_9780111531938_en.pdf
6.31 * 35 * 52 / 12 = £957/month
No holidays
No bank holidays
Amazing
here’s the relevant quote from the DWP:
““If you earn less than the minimum income floor (957) in any month, Universal Credit will not bridge that gap. This will encourage you to grow your business and make sure it can support you.”
Taken from:http://www.prowess.org.uk/universal-credit-self-employed
So, not only do we have people forced into spurious self-employment by benefit sanctions, we then have a ’round 2′ of this ‘flogging’ which will punish you for your self-employment not making you self sufficient!
As someone wise said “there is no such thing as security”. Self Employment is probably just as secure as a paid job. It is unlikely that you will sack yourself and there is no such thing as a job for life etc, blah.
I think many would not agree with you
Perhaps- all I know is that every company I have ever worked for no longer exists (hopefully none of my doing). I have been lucky to be self employed for 14 years and i’ve not sacked myself yet 🙂
I think it a little odd to think that capable of extrapolation
Utter rubbish Stuart – if you fail as a CEO of a banking institution there is a job/pension/and all sorts of benefits for life and beyond! The reward for causing economic failure to millions of OTHERS is massive! Wake up and detach yourself from the rest of the half-asleep populace who have been hoodwinked.