Can the left learn to live with the self-employed?

The self-employed appear happier and more content than typical employees.

Job centre ncrj

The self-employed appear happier and more content than typical employees

The UK is experiencing a boom in microbusinesses and self-employment. Since 2008, the number of microbusinesses has grown by 600,000, while the size of the self-employed community has swelled to record levels.

Around 1 in 7 of the workforce now answer to themselves. Nor are these trends waning. The first quarter of 2014 saw 183,000 more people become self-employed – a remarkable figure by any stretch of the imagination.

But what to make of this phenomenon? Is it a sign of a resurgent entrepreneurial spirit? Or is it a symptom of a deeper malaise in our economy?

So far the debate has been distorted by a number of myths – the first being that most of the newly self-employed are there through no choice of their own.

While there is no doubt some truth in this, the results from our RSA/Populus survey found that only one in four of those who started up since the downturn in 2008 did so to escape unemployment.

Another myth is that a significant number of the new starters are ‘odd jobbers’, scratching around for work. Yet look closer at the data and we see that the biggest rise in self-employment has actually been in professional occupations – one of the highest skilled labour groups.

A third myth propagated by some is that this boom in self-employment is just part of a cyclical trend and will die down when the economy returns to full health. However, this ignores the fact that self-employment has been increasing year on year since at least 2000.

In short, the boom is as much to do with structural changes as with cyclical ones.

All of which begs the question of whether we really want more people to be working for themselves. What does being self-employed mean for their living standards, financial security and wellbeing?

At first sight, life appears to be very tough for these workers. Our analysis shows that the full-time self-employed earn 20 per cent less than their counterparts in typical jobs, and their weekly earnings have fallen by 10 per cent in real terms since 2000.

They also appear to work longer hours, have less holiday leave and be at risk of isolation.

Yet dig a little deeper and we find that a strange paradox exists: the self-employed appear happier and more content than typical employees. Eight in 10 of those we surveyed felt they were more satisfied in their working lives than they would have been in a conventional job.

Indeed, the vast majority said the work they do is more meaningful, and that they have more freedom to do the things they want. For many, these virtues are worth the average £74 a week in earnings that full-time workers sacrifice when becoming their own boss.

But this isn’t just about abstract benefits – there are also plenty of practical advantages too. For example, two-thirds thought that working for themselves was important for being able to live where they want (e.g. in a rural location), over half for working around their physical health conditions, and over a third of caring for older relatives.

As our population ages and chronic health problems become more commonplace, it is not difficult to see how important self-employment could be in future years as a flexible form of work.

Self employment 2j

The fundamental lesson from our research is that we need to learn to live with the self-employed. Yes, there are a substantial number who are forced into this position, but there is little doubt that the vast majority enjoy being their own boss – and understandably so.

At present, however, many commentators like the TUC have failed to recognise this, and seem to want to hark back to a golden age when being an employee in a large organisation was the norm.

Not only is this futile, it also distracts us from the task of improving the living standards of the self-employed. In our report, we recommend that the government conducts an urgent review of policies that may affect these workers – from welfare and taxes, all the way through to housing and education. We also call upon trade unions to begin assisting the self-employed, even by bringing them into their ranks of members.

A third proposal is to support the creation of more co-operatives, which would allow the self-employed community to achieve more than the sum of its parts.

Believe it or not, this is an agenda that the left are well placed to drive forward. Yet at present, Labour is viewed with a great deal of suspicion by many in the business community.

Our survey reveals that less than 10 per cent of the self-employed think Labour are the best party for their business. This is despite several policy announcements such as the energy price freeze and a pledge by Ed Miliband to “go into the next election as the party of small business and enterprise”.

The overriding message is that policy tweaks and pro-business speeches will no longer suffice. Rather, the left needs a root and branch re-think about its approach to small businesses – from Labour HQ to the trade unions, and all the way down to local activists.

In short, can the left learn to live with the self-employed?

Self employment graph3j

Benedict Dellot is a senior researcher at the RSA

14 Responses to “Can the left learn to live with the self-employed?”

  1. Horatio

    One would say the left love self-unemployment more!

  2. Saddo

    How enlightened. The glorious collective of leftfootforward is going to allow us mere plebs to decide if we want to work for ourselves or not. It increasingly appears that East Germany is Miliband and followers role model.

  3. Dave Roberts

    I have been self employed for over forty years but would agree it’s not for everyone. It’s necessary to be self reliant and driven and most people aren’t.

  4. Sir Trev Skint MP

    You cannot unionise self-motivated, aspirational people. Unions are viewed as workplace disruptors, and the self employed cannot afford their incomes to be impaired by constant calls to strike, work to rule, abolishing zero-hours contracts or minimum wage demands. These are the very things an entrepreneur will resist at all times.

  5. Bruce Mason

    This is an interesting topic. My wife took voluntary redundancy 3.5 years ago from a job paying more than mine to set up her own business. Between us we earn far less than previously and work far more hours. It wouldn’t have happened if not for the recession but at the same time it wasn’t forced on us. This is just one data point but indications are that is part of a reasonably common trend. The question of course is what the left can do in terms of support and solidarity for all people working. And for those of us who now also employ staff how we can work together to ensure that despite all the financial stresses of running a small business that we foster a work environment which is fair and equitable.

  6. MrVeryAngry

    I am self employed and have been for 30 years. What I really, really want from the Government – and especially a Labour government is for it to eff right off and leave me well alone. Now.

  7. Mr_Ominous

    Just shows the type of controlling mindset leftists have when they get jittery about the prospect of self-employed people increasing. Technology means collectivism is progressively becoming unnecessary. Individualism and modern technology are perfect bedfellows.

  8. mdj

    I think the question – which has answered itself, it seems -is: ‘Can the self-employed afford to live with the Left?
    As an instinctive Labour supporter when young, the clock first struck 13 in the late 70s when I heard – or read, I wish I could find the reference – Michael Foot saying that self-employment was a scourge he wished to abolish.

    He might have rephrased this; he might rightly have said that there many types of exploitative casualisation that he wished to protect people from, which we could all applaud.
    But he didn’t, and he was a man whose trade was words.
    So we took him at his.
    It all fitted a picture of a Labour Party that was saying to its supporters,’Thus far shall you go, and no further; we need you in large, easily manoeuvred blocs. We genuinely wished to raise your living standards, but increasing your freedom of choice was never part of the deal.’

    To his credit, this is one big thing that Tony Blair did understand. But rebranding the party as the engine of a new, largely public-sector middle class , created by state intervention since the war, which zealously pulled up the ladder just as Crosland foresaw in the 50s, was to surrender to the dangers of the new situation, not to lead through them.

    I somehow think that admitting you’ve been wrong for the last forty years will not be a vote-winner.

    What this article also hints at is the belated realisation that importing a new electorate to offset the dwindling support of the old one is not panning out as expected.

  9. BruceMe

    I’ve worked in the private, public and voluntary sectors. I was also an HR practitioner in all 3 for many years. I changed career at age 50 to start my own mobile computer repair business. I earn less than I did as an employee. I love being my own boss, managing my own time and effort, working directly with customers. I’ve also been in the Labour Party, and intermittently a trade union member, since university 30 years ago and am a party activist and officer.
    In the last 5 years I’ve worked for and networked with numerous self-employees – whether sole traders, home or small business owners, contractors or partners – who had progressive political views. I live in a true blue constituency in the South East.
    I see no inherent contradiction between being on the left/progressive and self-employed. Authenticity, integrity and ethical behaviour are all consistent with self-employment. I strive to live, trade and do my politics on that basis.
    Whilst the heading of the article appears patronising to self-employed people, no-one seems go be disputing the research findings. The left is broader than The Labour Party but as the largest political organisation on the left Labour dominates and its structures inevitably reflect its history and largest contributors. Labour and the wider left/progressives need to develop economic and employment policy and practice that encourages all types of decent employment, self-employment and other forms of tenure. Self-employed people have much expertise, experience and energy to contribute to progressive politics, not least arguing for/encouraging enterprise, decentralisation of power and an enabling rather than a controlling local/national government regime.
    Self-employed people can be every bit as exploitative, to themselves, as some employers are to their staff. Small businesses can be as environmentally/corporately responsible and contribute to their communities just as much as medium and large enterprises.
    So let’s stop thinking and acting on the basis of lazy, inaccurate generalisations, prejudices and stereotypes about self-employment and how a left of centre government might behave towards the private sector. Let’s start thinking seriously and demonstrating how self-employment is a valid choice, and a valuable contributor to, a vigorous mixed economy.

  10. Sparky

    The left hates self-employed people for the following reasons:

    1. The whole notion of being self-employed implies a degree of entrepreneurship and profit driven imperative by individuals. This is fundamentally at odds with the left wing view of the world.

    2. Individuals who are self-employed do not fit any neat ‘workers’ vs ‘bosses’ mentality on which so much left wing thinking is predicated.

    3. “Build me a path from cradle to grave” sang Billy Bragg. Left wingers want a society of big government, paternalistic structures that homogenise individuals and provide rigid structures and paths on how people should live.

    Socialism has no place in the modern world. It holds back the talented, demonises anyone who creates wealth, strips people of their individuality and pulls people down to the lowest common denominator.

  11. joey be

    who is this left? and how come some of you are their spokesperson?

  12. Baron John Arbuthnot Fisher

    Another 6th form common room level piece, by a tired, out of date and irrelevant left wing base of retarded thinking.

    I have rarely read anything so devoid of any actual facts in their context, but when I do it’s generally from a space just like this one.

    F-

  13. mark conway

    Unbelievable.

  14. Kevin T

    “Our survey reveals that less than 10 per cent of the self-employed think Labour are the best party for their business.”

    I wonder what percentage has contracts with the State. If I made my living off PFI deals, I wouldn’t just vote Labour, I’d campaign for them.

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