Self-employment – who are the new army of workers?
The rise in self – employment is well documented, the surge is extraordinary as self-employment is a relatively small part of the UK jobs market. More striking is that whilst women account for just under a third of all the self- employed, they have made up over half (53 per cent) of the increase in self- employment since 2008.
In 2001 there were 3.28m self-employed workers, and by the end of 2007 this had reached 3.82m. After the labour market downturn, however, self-employment accelerated more quickly to reach its current level of 4.8m. Self-employment now makes up 15 per cent of the workforce, up two percentage points from 2008.
Net change in employee jobs vs self-employment, 2008-2016 (000s)
43 per cent of the net growth in jobs since 2008 has been in self-employment. This is no blip, as self-employment continues to rise. Around half the net increase in employment over the last year has been in self-employment.
Almost 50 per cent of the growth in self-employment has been part-time.
Self-employment growth since 2008: full-time vs. part-time (000s)
The TUC have repeatedly reported concerns around the growth in self-employment, that while some people do move into self-employment as a positive choice others may have been forced in to self-employment or bogus self-employment as they were unable to find suitable work. Citizens Advice analysis showed that as many as 460,000 people could be ‘bogusly self-employed’, and the recent high profile court case against Uber also highlighted the issue of bogus self-employment.
We have also been concerned at the earnings of the self-employed, earnings data show that the self-employed are more likely to be on lower earnings compared to employees. And that the gap between employees and self-employed has increased since 2008, in 2014/2015 (latest data available) earnings from self-employment were 60 per cent of employment earnings. The Social Market Foundation also estimate that in 2016 there were 1.7m self-employed workers paid below the National Living Wage. This 1.7 m makes up around 45% of self-employed in the UK.
Profile of the new self- employed
There is also an important gender dimension to the growth in self-employment.
It is striking that whilst women account for just under a third of all the self- employed, they have made up over half (53 per cent) of the increase in self- employment since 2008. This has increased from around 1m to 1.5m.
Net growth in self-employment since 2008, by gender (000’s)
Part-time self-employment has also been growing more rapidly among women. Of the total increase in self-employment since 2008, 29 per cent has been among women working part-time, compared to 18 per cent for men.
Net growth in all self-employment since 2008, by gender (000s)
This trend has continued in recent months as women’s part-time self-employment has increased by 4.5 per cent to reach 798,000 in 2015-16. In contrast for men it has fallen by 3.2 per cent to reach 562,000.
The analysis below informs us of which occupations part – time self-employed women are most likely to be working in. While there are considerable numbers working in well paid professional occupations, there is simultaneously a high number in very low paying occupations. The most frequent occupation is elementary cleaning occupations.
Top occupations for part–time women self employed
For part-time self- employed men the most likely occupation is road transport driver. Overall construction and building trades is the most frequent occupation for all self-employed (including full – time and part time) however this is a very highly male dominated industry.
The rise in self-employment has also been among older age groups, those aged over 50 have seen a 44% increase in self-employment since 2008, this is a net rise of almost 650,000, amongst the over 65 the percentage rise has been much sharper 110%, however this age group does have a much smaller base.
Within the over 50 group the largest rise in self- employment has been amongst women, a 71% increase since 2008 compared to 35% for men.
Self-Employment – percentage increase by age and gender since 2008
It appears then the new army of self- employed are more likely to be older, more likely to be female and more likely to work part-time.