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Britain’s employment-led recovery is an almighty headache for the left: Osborne’s austerity economics was meant to destroy jobs not create them.

To rescue their narrative, it is necessary for Labour and their union and media allies to talk-down the jobs miracle. In particular, the growth of self-employment has been portrayed as a third-rate way of working – typified by low pay and poor conditions.

However, a new report from the Royal Society of Arts offers a more positive perspective. Some of the key points are covered by Katie Allen in the Guardian:

“Britain’s growing army of self-employed workers are typically worse off than employees but enjoy greater job satisfaction…

“The Royal Society of Arts (RSA) seeks to rebuff the theory that many people have been forced into working for themselves by a shrinking jobs market since the downturn, arguing instead that they chose to go it alone for greater flexibility and creative freedom.

“‘…we have this new type of worker, at least some of the self-employed, that value different things at work, the softer benefits over the harder ones,” said Benedict Dellot, author of the report.”

Admittedly, there are downsides to self-employment:

“The typical full-time self-employed worker earns £74 less per week than a full-time employee and also tends to work longer hours, have less holiday leave and be at risk of social isolation…”

Our high level of self-employment – much higher than the US, for instance – is sometimes blamed for Britain’s comparatively low-level of labour productivity. However, this is to ignore the hidden efficiencies – such as the savings on the high cost of commuting and childcare, both of which come out of taxed income.

The report also casts doubt on the allegation that people are being forced into self-employment as a second-best option:

“…its survey of more than 1,000 microbusiness owners, suggested only one in four who started up in the recession said that escaping unemployment was a key motivating factor. Instead, a more common answer was to achieve greater freedom or ‘make the most of a good idea’. It also found 84% claimed they were more satisfied in their working lives than they would have been in a conventional job.”

The innovative aspect of self-employment could be of particular economic significance. Each microbusiness represents an experiment. While most of these experiments will be unsuccessful or merely keep things ticking over, a small proportion will produce genuinely useful – and, in some cases, transformative – results. In other words, an economy rich in micro-businesses is exposed to a lot of very limited downsides and a few potentially enormous upsides – the benefit of the latter greatly outweighing the disbenefit of the former.

But hang-on, are we really going to see the next big thing come from a bunch of dog-walkers and cupcake-makers? Aren’t these just a load of no-hopers at the bottom-of-the-pile who might be better off in regular employment? The general secretary of the TUC, who is quoted in the article, refers to “the bogus self-employment of the building workers and internet delivery van drivers.”

Again, the RSA report challenges the stereotypes:

“…its analysis of the UK’s official Labour Force Survey showed that the biggest increase in self-employment since 2008 has been in highly skilled professional occupations, up 35%.

“The numbers of micro-businesses was already rising before 2008, added Dellot, questioning the link between the downturn and people working for themselves.”

Therefore, on the whole, we should be feeling good about Britain’s self-employment revolution. More than that, we need to see some supportive action from government, business organisations and, above all, the unions – who should be searching for ways to help the self-employed help themselves (for instance, by brokering collective deals on insurance and other services).

Unfortunately, many in the union movement are more concerned with fomenting class war between the workers and the bosses – always a non-starter with the self-employed.

17 comments for: Government and the unions must get behind the self-employment revolution

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