The Association of Independent Professionals and the Self-Employed (IPSE) has responded to a new study from the Resolution Foundation think tank, which indicates that the average pay rates for self-employed workers are lower now than in 1994-95, when such data began being collected.
The research suggests that the average weekly earnings for a self-employed worker were in the region of £240 a week in 2014-15. After adjusting for inflation, this represents a decline of 15 per cent on the average achieved in 1994-95.
Since 2001, the UK’s self-employed workforce has ballooned by 45 per cent, yet the Resolution Foundation’s findings suggest that its average weekly income has fallen by £60. The study attributes the decline to the proliferation of lower-paid jobs and the financial crisis, which had squeezed pay rates.
The think tank’s economic analyst, Adam Corlett, said that self-employment today is less likely to involve exceptionally long working weeks, and modern freelancers are far less likely to own businesses and have their own staff. While returns may have risen recently, he said, many are still experiencing the painful effects of the recession.
Referring obliquely to Prime Minister Theresa May’s recent announcement of an independent review into modern employment, Mr Corlett added that in a context where so many workers are earning so little, it is right for the Government to consider how public policy could adequately meet the needs of this category of worker.
TUC General Secretary Frances O’Grady said that “Britain’s new generation of self-employed workers are not all the budding entrepreneur’s ministers like to talk about.” Conceding that some people choose self-employment, she claimed that many have been forced into it because of an absence of alternative work.
However, IPSE’s Policy Development Manager, Jordan Marshall, drew out the complicated nature of the term ‘self-employment’ – a category that, somewhat confusingly, encompasses all freelancers not in salaried employment, including highly skilled and well-remunerated Umbrella Company Employees and other contracting professionals.
Accepting that working for oneself involves a good deal of hard work for all who choose this path, Mr Marshall pointed out that it is abundantly clear that most freelancers and self-employed workers do not prefer to work any other way.
He added: “Recent IPSE research shows that only two percent of freelancers want to take up regular employment.”
“The self-employed value the flexibility offered by this way of working. We shouldn’t forget that the fastest growing section of self-employment is among the highest skilled professions.
“The Government can take some action to increase the earning power of the self-employed. Extending tax breaks to all forms of training will enable self-employed workers to gain new skills and ultimately charge more for their services.”