Members of Britain’s self-employed workforce are earning less money now than they were two decades ago, according to new research.
Thinktank Resolution Foundation’s latest Earnings Outlook report found that even as the number of workers in the sector has soared, the typical earnings are around £60 per week lower than in 2001-02.
A record 4.8 million people are classed as self-employed in the UK - a rise of 45 per cent since 2001-02 - although the foundation says that the make-up of the self-employed sector has changed significantly in that time.
Fewer self-employed people have staff of their own and fewer are working more than 40 hours a week, perhaps partially explaining the drop, but the Foundation found that even on a like-for-like basis earnings have dropped. Typical earnings fell by £100 a week between 2006-07 and 2013-14.
Adam Corlett, economic analyst at the Resolution Foundation, said: “Almost five million workers across Britain are now self-employed. But while the self-employed workforce is getting bigger, typical earnings are actually lower than they were 20 years ago.
“Prior to the financial crisis, this stagnation was as much about the changing nature of self-employed work, rather than individual rewards. But since the crisis the returns to self-employment have fallen sharply even when measured on a like-for-like basis.
“Modern self-employment is less likely to involve very long working weeks, and today’s workers are far less likely to be business owners with staff of their own. And while returns may have increased recently, many workers are still feeling the painful effects of the financial crisis.
“With so many self-employed workers earning so little, it is right that the government investigate how public policy should catch up to meet the needs of these workers.
“For many people, self-employment brings a freedom that no employer can provide. But the growth of low pay and short hours, along with a summer of protest about conditions, means that it’s no surprise some workers in the ‘gig economy’ feel that self-employment is just a positive spin on precarious work.”