The TUC analysis shows that
despite self-employment being a relatively small part of the UK jobs market
– just one in seven workers are self-employed – it has accounted
for 44 per cent of all employment growth since the last
election.
Workers aged 50 plus account for
half the increase in self-employment, with self-employed workers aged 65 and
over the fastest growing group in the labour market (increasing by 29 per cent
since the end of 2010).
Over 40 per cent of all the
self-employed jobs created since mid-2010 are also part-time. The TUC is
concerned that many people are only taking this kind of work because they are
unable to find good quality employee jobs which provide the stable employment
they really want.
The TUC’s analysis also
shows that the number of people starting their own businesses has fallen in
recent years, in spite of rising self-employment. The biggest growth areas of
self-employment since mid-2010 have been people working for themselves (up
232,000), freelancing (up 69,000) or sub-contracting (up
67,000).
The number of self-employed
people who either run a business, or are a partner or sole director in one
(positions usually associated with entrepreneurship) has actually fallen by
52,000. These figures show that rising self-employment is part of a wider shift
towards insecure employment, rather than as a result of a growing number of
people starting up new companies as ministers like to claim, says the
TUC.
Self-employment has been going
up steadily since early 2008, even when unemployment was rising sharply, and
has increased even more in recent years.
The TUC is concerned that the
growth of self-employment is at the expense of more secure employee jobs. Many
newly self-employed workers do the same work as employees but with less job
security, poorer working conditions and often less take-home pay, says the
TUC.
Other forms of self-employment
– for example selling goods online or registering as self-employed to do
the occasional ‘oddjob’ – tend not to pay enough to make a
decent living, says the TUC. Recent figures from Citizens Advice suggested that
self-employed workers are as likely to have debt problems as unemployed
people.
Self-employed workers also have
no right to paid sick, holiday, maternity or paternity leave, redundancy pay or
protection against unfair dismissal – a particular problem for
self-employed workers who are sub-contracted to another employer. The
government is also planning to exempt most self-employed workers from vital
health and safety protections in the Deregulation Bill currently making its way
through way through Parliament.
Self-employed workers are often
poorly paid, says the TUC. Recent Resolution Foundation research found that
earnings from self-employment fell by a fifth between 2006 and 2010, while
official figures published by Parliament found that the average annual income
from self-employment is less than £10,000 for women.
The TUC is concerned that
insecure work including self-employment, agency work and zero-hours contracts
are becoming a permanent feature of the labour market, even as the economy
recovers. The growth of casualised work is likely to continue to hold back
wages, and prevent people from having the kind of secure employment they need
to pay their bills, save money and plan for the future, warns the
TUC.
TUC General
Secretary Frances O’Grady said:
“Self-employment accounts for almost half of all the new jobs created
under this government.
“But these newly
self-employed workers are not the budding entrepreneurs ministers like to talk
about. Only a tiny fraction run their own businesses, while the vast majority
work for themselves or another employer – often with fewer rights, less
pay and no job security.
“While some choose to be
self-employed, many people are forced into it because there is no alternative
work. The lack of a stable income and poor job security often associated with
self-employment makes it hard for people to pay their bills, arrange childcare,
plan holidays or even buy or rent a home.
“The economy is finally
back in recovery yet people’s wages are still shrinking and many are
unable to find stable employment. Until we see decent pay rises and better job
security, working people will continue to feel that the recovery is passing
them by.”
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