Traditional jobs in which an employee is paid by a company are declining all over the country. However, the real effect of this is being masked by the rise in self-employment.
Research shows that the total number of employed jobs fell in 10 of 12 British regions between 2015 and 2021. The number of employee jobs in the eastern and south-eastern regions remained virtually static, while only in London were jobs created by employers.
However over 400,000 people around the UK classified themselves as self-employed. These newly created self-employed jobs were sufficient to offset the loss of employed jobs. This has contributed to an increase in the number of individuals in work over the 2015 baseline.
Other research has shown that the weekly wages of the self-employed has decreased as opposed to those in paid jobs. Weekly wages for employees have increased 6% since 2016, whereas self-employed pay has decreased by 8% in the same period. Typically, self-employed people are now being paid 30% less than the average employee.
Although the move into self-employment can be for personal reasons, some say that a lack of alternatives is the reason. Also, there is worrying analysis that this move is increasing financial pressure on homes across the UK.
The economist and former member of the Bank of England’s Monetary Policy Committee, David Blanchflower says “Self-employment is often a last resort of the desperate. Such workers operate under considerable strain, worried about where their income is coming from, and are sometimes forced to finance themselves by borrowing against their home, exposing their families to the same financial uncertainty that attaches to their job.”