PCG economist Georgios Nikolaidis has welcomed the development of improved labour statistics by the Office for National Statistics (ONS) that provide a complete and nuanced breakdown between self-employed and employed.
Existing statistical methods in use by the ONS have revealed a steady rise in self-employment every year since 2005, with the exception of the recession-blighted period between 2007 and 2008. The total now stands at 4.46 million, representing a 20% increase in nine years and taking the number of self-employed individuals to 15% of the UK’s total workforce.
The new statistical methods used by the ONS show that the rise in employment between November 2013 and January 2014 was almost entirely due to an army of people opting for self-employment. The latest ONS report reveals that the number of employee jobs available during this period actually fell by 60,000, but was offset by a 211,000-strong increase in self-employment.
While this expansion indexes a significant change in the structure of the UK labour market, Mr Nikolaidis notes that official statistical methods have so far failed to distinguish accurately between low-skilled forms of freelancing and high-end varieties, such as highly-qualified independent professionals contracting as Umbrella Company Employees.
This has led some analysts to suggest that many self-employed people work in low-skill occupations for fewer hours and less money, contributing to a low-skill, low-productivity workforce; however, as Mr Nikolaidis is quick to note, the new figures show that self-employment in high-skill industries grew by 63% between 2004 and 2013. Skilled freelancers, Mr Nikolaidis pointed out, now make up 40% of the total self-employed workforce.