Self-employed workers are taking home less today than 20 years ago, according to new figures from the Resolution Foundation.
The think tank found that while the UK’s self employed workforce had grown by 45 per cent, average earnings remain below levels recorded in 1994-95.
The policy experts said that this is partly due to the self-employed pool increasingly comprising lower income workers before the financial crisis, but added that since 2008, returns have been falling even on a like-for-like basis.
Typical earnings fell by £100 a week between 2006-07 and 2013-14, with the vast majority of this squeeze arising even after holding constant the characteristics of the self-employed group.
Adam Corlett, economic analyst at the Resolution Foundation, said that almost five million UK workers were self-employed – about one in seven workers and a record high.
Resolution foundation economic analyst Adam Corlett said:
“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.”
According to the research, average self-employed wages were £240 a week in the 2014-15 financial year – the most recent period for which data is available – down from about £300 a week in 1994-95.
The Resolution Foundation – a think tank that aims to improve pay for families – partly blamed the changing nature of the self-employed workforce.
The foundation said that many more people had taken up lower-paid jobs in the “gig economy”, while the proportion of self-employed business owners with their own staff had fallen. The number of hours worked by the self-employed had also declined.
TUC general secretary Frances O’Grady said:
“Britain’s new generation of self-employed workers are not all the budding entrepreneurs ministers like to talk about.
“While some choose self-employment, many are forced into it because there is no alternative work. Self-employment today too often means low pay and fewer rights at work.”