Self-employment at all-time high, but earnings down 25% on pre-crisis peak
Yesterday’s labour market figures showed another rise in self-employment, of 94,000 on the quarter, with employee jobs up 73,000. As a share of total employment, self-employment is now at an all-time high – at 15.1% in 2016Q2, above the previous peak of 15.0% in 2014Q2. Though really a steadily rising trend has been underway since the end of the millennium.
Employees and self-employed as a %age share of total employment
Earnings are however a different matter. (See endnote for methodology/background.)
At face value the latest news from the Family Resources Survey was positive. Self-employment earnings in real terms grew by an apparently vigorous 11.8% into 2014/15 (note this is not super-timely).
While the rebound is likely to be related to the increased economic growth at the end of the last parliament, the figures are also volatile, e.g. declining by 12.3% into 2011/12.
More importantly , even in spite of this rebound, self-employed real earnings were still 24.7% below the pre-crisis peak in 2006/07.
The figures are published alongside equivalents for employees, where (in 2014/15) real earnings were down 9.5% on their pre-crisis peak (which comes a year later in 2007/08). Below are the two earnings measures, relative to the peak for self-employed earnings.
Self-employed and employee real earnings, index 2006/07=100
Here are the figures as they are published by the Department for Work and Pensions in 2014/15 prices.
To characterise crudely: just like the labour market as a whole, higher self-employment is seemingly at the expense of lower earnings – severely lower earnings.
Endnote: These figures originally passed me by: they are derived from the Family Resources Survey – the latest results were issued on 28 June 2016 – here – the Monday after the referendum and slipped my notice; I’m not sure if they were picked up elsewhere. Note that the self-employment earnings figure is published with something of a lag relative to other earnings figures. The figures are for median gross annual earnings, set in 2014/15 prices – which is how the FRS results are published.