Research has revealed that a self-employed Briton earns 40% less than a typical employee. The report is said to be the most in-depth analysis of the current self-employed workforce in the UK and how it is changing.
Independent research organisation - Resolution Foundation, who undertook the study, revealed a drop of 20% in weekly earnings for self-employed workers between the years 2007 and 2012. On the other hand, over the same period, full-time employees saw their weekly pay drop by only 6% on average.
Chief executive of Resolution Foundation, Gavin Kelly said, “Self-employment is often a highly precarious existence which isn’t that well supported by public policy. High levels of self-employment seem likely to be here to stay and policy-makers have some catching up to do.”
In a separate survey commissioned by Resolution Foundation and conducted by researcher Ipsos-Mori, it was found that close to 73% of the people who had become self-employed in the last 5 years did so mainly or partly due to personal preference, though a growing minority said that it was due to a lack of better alternatives.
Over 83% of the self-employed workforce surveyed said that they choose to work for themselves while 17% said they would prefer to be an employee. This figure excludes those who answered “don’t know”.
Chief executive of Ipsos-Mori, Ben Page said, “Self-employment has grown across most parts of the workforce and sizeable number of the self-employed would describe themselves as entrepreneurs. This confidence is at odds with what we know are the associated difficulties – especially financial insecurity and unpredictability – but only a quarter of the self-employed say they would prefer a regular job.”
Since the start of the recession, growth in the self-employment sector has quickly overtaken the growth in self-employed jobs - between the years 2008 and 2014, self employment has grown by 666,000 while employees increased by 133,000.