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No-boss Britain: entrepreneurs or out of options?

United Kingdom

The self-employment dream. But the reality often involves long hours and little pay. www.thearmchairgenealogist.com under a Creative Commons Licence

Britain’s self-employed army can no longer be ignored. For the first time in the country’s modern history, a significant proportion of the labour market (one in seven) has no boss. According to official figures, the number of registered self-employed workers has risen by more than 600,000 since 2010 – an unprecedented increase of around 15 per cent that shows few signs of subsiding.

Many have welcomed the trend. Last month, the Bank of England suggested benefits cuts were creating a new generation of entrepreneurs by pushing more people into self-employment – a view unsurprisingly shared by Work and Pensions Secretary Iain Duncan Smith, who told the Telegraph that the Coalition was reviving Britain’s ‘entrepreneurial spirit’.

As a freelance journalist, it’s tempting to be flattered by such rhetoric. Yet it seems unlikely that Britain has created 600,000 budding Alan Sugars in the space of six years – a somewhat disturbing prospect, in any case.

While few serious attempts have been made to properly analyze the statistics and explore what conditions are like for the self-employed, the studies and surveys that do exist paint a rather different (and less entrepreneurial) picture of our plight. Some of the most comprehensive research to date comes from the Resolution Foundation, which published a report earlier this year showing that the median annual income for self-employed workers fell by £4,000 ($6,750), or 28 per cent, between 2001 and 2010, dropping to below £12,000 ($20,250) by 2011.

Meanwhile, the number of people out of work has been steadily declining over the past 2 years. Unemployment reached a five-year low of 2.24 million in the three months to February, prompting George Osborne to commit to targeting ‘full employment’ – an impressive-sounding term which, when challenged, the Chancellor conspicuously declined to define. During the same period, the number of people classed as self-employed rose by 146,000.

Yet while self-employed workers often experience financial insecurity, many enjoy their professional freedom. A Mori poll published in April asked 985 self-employed people whether or not they would rather be an employee. A majority of 79 per cent responded that they would rather be self-employed, with only 16 per cent preferring the employee option. The survey also found that the longer that workers had been self-employed, the less likely they were to desire a different employment status. But a quarter of people who have been self-employed for fewer than five years say they began working for themselves due to an absence of better alternatives.

Conor Darcy, a researcher at the Resolution Foundation, which commissioned the poll, says the results don’t fit neatly with popular media narratives: ‘The discussion tends to get polarized, with some people projecting that it is all people who were forced into self-employment and don’t want to be there, and then other people saying it’s great, there’s an upsurge in entrepreneurial spirit. What we’ve found is that the truth is probably somewhere in between.’

‘Somewhere in between’ can be a difficult concept to comprehend in a society that is used to clearly define boundaries between secure employment and the dole. My own experience has taught me that not everyone is able to grasp the conceptual distinction between self-employment and unemployment. No matter how many times I explain my situation to friends, some of them still send me emails suggesting jobs to apply for – often comically unrelated to my skillset and interests. I also receive comments like ‘so, are you still freelancing?’, and, perhaps even more infuriating, ‘I truly believe you will get your big break [job] one day.’

All of this would be more understandable if I complained about my employment status or income, but I don’t. These comments are borne of a patronizing assumption that anybody who isn’t contracted to a company must be profoundly miserable and helped into a job immediately. This is even stranger when I consider the frequency with which these friends complain about being overworked and depressed in their ‘proper’ jobs. Yet no matter how I qualify it, the word ‘freelance’ is invariably interpreted by them as code for ‘absolutely desperate for any job going’.

It’s doubtless an experience shared by many. A picture is now emerging of a fast-growing army of the 4.5 million self-employed workers in Britain, many of whom enjoy their liberty yet are poorly understood and extremely vulnerable to exploitation. There is barely any safety net protecting the self-employed, who rarely qualify for a decent pension or Job Seekers’ Allowance (should they ever need it) and are typically forced to put up with late payments and extortionately low freelance rates.

The unions charged with fighting the battles, which will need to be won if the model is to be at all sustainable, have little influence. But securing these rights is a matter which concerns us all, regardless of employment status.

Failure to adapt to the interests and demands of the self-employed could have disastrous consequences for a society whose reliance on our labour is accelerating at pace.

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