Almost half of self-employed adults aged over 25 are earning less than the minimum wage, according to new analysis by the TUC, that punctures the myth of a growing army of wealthy entrepreneurs.The figures also reveal that self-employed women fare particularly badly, with over half (52 per cent) earning less than the minimum wage of £8.21 an hour.
As she adds:
The numbers of self-employment workers has soared since the early 2000s.
In early 2001 there were 3.2 million self-employed people. By the end of 2007 this had reached 3.8 million.
Following the 2008 downturn, self-employment accelerated. This initially cushioned overall employment falls and then contributed to job growth. The self-employed now makes up 15 per cent of the workforce, some 5 million people.
And:
While men are more likely to be self-employed, 3.3 million compared to 1.7 million women, the number of women in self-employment has grown much faster, up 57 per cent since 2008, compared to 17% for men.
Women are also more likely to be in part-time self-employment. More than half of self-employed women are part-time, compared to a fifth of men.
So what's the problem? This is, because these are concerns I've had since the days when I worked with the TUC:
While some people move into self-employment as a positive choice, others are forced into low-paid self-employment because they cannot find suitable work. The TUC is worried that the growth in self-employment is also driven in part by sham forms of self-employment, which are used by some employers to reduce their tax liability, avoid the minimum wage and deny workers their rights. Sham self-employment includes some gig economy workers, and people who are contracted to a single employer through a personal service company, rather than being contracted as an employee.
The 1.85 million people in low-paid self-employment [1] are part of at least 3.7 million people in insecure jobs . The other 1.83 million include agency workers, casual workers, seasonal workers, and those whose main job is on a zero-hours contract.
For me the issues are threefold and are tax abuse, employment abuse and sham data about employment that misleads the country into thinking the economy is doing vastly better than it is for political gain for the government. All are worrying. All need to be tackled. I doubt Boris Johnson and Sajid Javid will address any of them.
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I know at least 3 persons who have gone it alone and cannot make it pay. It’s really tough out there. And it just creates anther level of discontent that can be put to bad use by the fascists.
Hi PSR — Sorry I didn’t respond to your confusion to my (admittingly confusing) post in “The increasing indebtedness of UK households”. If Richard will allow, I will do so here.
My response was supposed to be along the lines, that I expected that particular post to be an absolute troll magnet, and you had got in before them [the trolls]. I’d had a little bet on with myself as soon as I had read the title, expecting reams of “you’re wrong Richard, you know nothing about how money works” style responses, but none to be seen all thread. Not that that’s a bad thing (although it could have been amusing to watch the argument/counter argument). I was just surprised.
Anyway, hope this clears up my somewhat obscure post the other day :). It was meant to be somewhat tongue in cheek.
Well I can sympathise! Mark and I left Harper Collins in 1998 to start our own business. We have just about (with one ‘phoenix’ in 2013) managed to keep XYZ Maps going for 21 years but I manage to pay myself significantly less now than I got in 1998. Minimum wages don’t apply to company directors! Meanwhile I have not been able to contribute anything to a pension fund in that period and currently have over £30,000 of stuff I have paid for where the company simply does not have enough cash to be able to refund me. So this is unfortunately a treadmill that I now regret having ever got started on, but it is not one I can get off easily at 57. So we just have to keep going and maybe something will pick up or we can maybe eventually sell it and get enough to retire. Otherwise I will be working for the rest of my life.
It occurred to me the other day reading one of the Prof’s blogs that while slavery has been abolished the modern version is actually debt bondage. This is well known in places like India, but not so much recognised in ‘the west’. However MMT demonstrates that the current austerity policy increasingly pushes the private sector into debt and that becomes debt bondage. Witness all the new graduates with £50k of student loan debt.
The whole system is extremely destructive of society and while the top 1% may gain for now, what comes around goes around and while the UK has not had a revolution so far it is perfectly possible.
Mortgage means ‘the grip of death’
Think about it….
“And it just creates anther level of discontent that can be put to bad use by the fascists”
Jesus wept, the fascists.. what planet are you on mate
This one
Get real
Look around
Gene says:
“Jesus wept, the fascists.. what planet are you on mate”
If you can’t see ’em that’s when you are probably tacitly supporting their aims.
They don’t advertise their presence with black shirts and jackboots until they are truly dominant and only then if they are rather quaintly reliant on the crude military methods of former times.
Frightfully infra-dig nowadays.
Hi Richard,
It is indeed tragic that people are being forced into this type of work. I wince every time I see a Deliveroo person or yet another hand car wash site opening.
The problem could be reduced by government investment in schemes that create well paid jobs (e.g. the Green New Deal) to give people alternatives, but are you aware of any work that has been done on regulatory responses to this problem? Particularly any that are aimed at large companies that create this type of self-employment “opportunity” as a way of escaping their responsibilities to society.
Thanks,
Neil
Unfortunately, ‘supply-side’ economics has encouraged the trend.
I did some work a decade or so ago
The TUC has done a bit
“I did some work a decade or so ago”
I’ve not been out of work quite that long. 🙂
🙂
People are forced into this bogus “self employment”, they are employees! Many work for modern day “slavemasters” who earn a living off the backs of others. My son, a lorry driver, has unwittingly become “self employed”. The modern road transport industry is very dependant upon the use of Agency drivers. In the early days of the Agency driver they were used to supply drivers to cover for holidays and sickness and temporary surges in business but now have become the mainstream supplier of labour in many businesses. Further, by using an Agency the main employer was relieved of the problem of handling tax and National Insurance which the Agency did, but now many agencies persuade drivers to become self employed and to set up their own businesses, thus relieving the Agency of any responsibility whatsoever! Drivers are persuaded that by becoming self employed they can, and do, save large amounts of tax. Their pay is subsidized by the taxman, they also ignore the fact that they receive no holiday pay, sick pay or pensions etc. Such is modern day work for many, also storing up big problems for the future.
Completely right
Although I suspect self employed actually means ‘owner-directors’ of limited companies
Spot on Richard, in my son’s case. I’ve just had to help him out financially with tax problems.
Erm….there was a flurry of coverage a little while back (covered on auntie Beeb) about HMRC clawing-back huge amounts of tax from ‘contractors’ caught-up in this agency working malarkey. It was supposedly going to cost some people huge sums, threatening destitution for some……..
Since then I’ve heard nothing. ???
There has been real action on the so-called loan schemes
The more straightforward arrangements have remained largely untouched