By Daniel Hunter
The UK has experienced a “self-employment led recovery” like no other European country, according to a report from IPPR. The report shows that since 2010, 40 per cent of the rise in UK jobs has been in self-employment. The report says this is unlikely be a temporary phenomenon and that the rise in self-employment in the UK is the start of a permanent shift in the way UK workers are employed.
The report shows that there are now over 4 million self-employed workers in the UK. Across Europe, their earnings are falling relative to employee earnings and the percentage looking for another job or for more hours has almost doubled. But the report argues that self-employment can provide a route into work for many disadvantaged groups, like unemployed people, women and mothers as well as migrants.
The report argues that government policies must adjust to this new labour market reality by boosting the support available to self-employed workers to access training and develop their skills. The report says that the self-employed cannot ordinarily benefit from apprenticeships or other company-based training, and their skill levels and productivity are likely to remain lower than those of the overall workforce.
In the UK a lower proportion of self-employed workers are highly qualified (levels 5 and 6) compared to the overall workforce. UK self-employed workers are more likely to have low-level qualifications than employees. The report shows that the opposite is true in Germany, where a greater proportion of highly qualified workers are self-employed than employees. The report also shows that self-employed workers are less likely to have paid into a private pension and work can be irregular and insecure.
In the UK just 17 per cent of self-employed workers employ any staff of their own. The report shows that this is the lowest rate in Europe. In Germany, where less than ten per cent per cent of workers are self-employed, 44 per cent of self-employed workers have one or more employee.