Sunday, 23 February 2014

Behind the Boom in Self Employment: More Working Poor

Recently much has been made about new stats revealing a "surprise" boom in the numbers of the Self Employed. While various distinguished writers and newspaper reporters have grappled with  the rising stats and asked why there is such a large increase, no one has got behind those stats and revealed the people and reasons why they have become Self Employed. One in seven of the UKs workforce is now apparently Self Employed. This figure is a staggering 367,000 more than in 2008. Even more surprising is that 84% of the increase has been in people aged 50+ according to the ONS.  A third of the newly Self Employed are women.

Have we suddenly become a nation that is providing growing numbers of entrepreneurs or is there something a little more telling as I scratched the surface of who is becoming self employed and why?

Among the figures there will of course be people who have decided to use their skills to become self employed electricians, carpenters,  plumbers, but I uncovered vast numbers of people in the Sales Reps industry for example, who, until  a few years ago were earning £20-30 per month as "a bit extra" and were not registered with HMRC as self employed. All that has changed of course and now Avon, Kleeneze, Betterware sales reps have been told by HMRC to register as self employed however little they earn. I have personal experience as an Independent Avon  Sales rep. You earn income on your sales once every 3 weeks. You are given a couple of set roads to sell in, and are unable to sell outside these boundaries/territory, unless to personal friends. Predominantly women who are carers, or have health/disability problems or men who have been made newly unemployed themselves take up this work. You have to sell £500 worth of products to make £80 every 3 weeks on average and these are the successful reps! Most sell under £200 and  for example in January (the leanest month of the year for sales) if you sell less than £80 of products you get £0. You have to pay for all your own sales literature yourself like brochures, bags and sales tools.There is a very high turnover of reps, as the rewards are not very high unless you can sell to friends outside of the set road territory. HMRC did a campaign 2 years ago to get all Avon reps to register as self employed and told of the consequences of not doing so. Thus a vast army of reps, who are in the most part working poor, earning pittances, are added to the list of Self Employed.

The Government, not content with seeing people desperately scrabbling for low paid self employment  in a vain effort to put food on the table, are now intent on demonising them too. This has turned into a concerted effort to savage the low paid and  have the far right media raging over immigration, when they have found that those people selling The Big Issue are in fact self employed and many of them immigrants.The Big Issue sellers are people wanting to work, wanting to earn money and contribute to the economy. They pay £1 to buy the paper and sell it for £2. Very entrepreneurial, but not good enough for right wing newspapers who don't recognise it as a "proper job."Many Big Issue sellers are earning small amounts of money to get by and need working tax credit top ups, like the other 4 million working poor, but because they happen to be self employed, they are demonised further and scoffed at for not being in employment. What should they do? Swop self employment for zero hours contract employment  if they can get it or be further demonised as "scroungers" on the dole?

Many men who were previously employed as skilled electricians for example,in factories, have been made redundant or replaced by zero hours contract agency staff. Proud men who have always worked, rather than drag themselves down to Job Centres to sign on, have made the switch to become self employed handymen, who will turn their hand to any domestic household tasks and gardening work. I spoke to a friend who was forced to make this switch.

"Some weeks, especially in the winter I earn less than £100. But I have earnt it: hanging light fittings, painting rooms, even shopping for an elderly person. Whatever someone needs doing, I will do it. No work is beneath me and while I am working as a self employed handyman, my kids can see me going
 out to work each day knowing I am doing my best to house, feed and clothe them. I get working tax credits to make up my low pay and I don't want to be doing this for ever, but I will do what it takes to
work. This Government has no right to say someone like me is not working hard enough or that I should get a paid employed job on part time zero hours contracts. If a job as an electrician in a factory came up on a permanent full time contract I would take it, simple as. I need the security of knowing I can pay my rent and bills and zero hours cannot provide this."

Many people who are low paid and self employed have had no wage increases since 2010 and indeed many are taking pay cuts to keep themselves afloat. A huge anomaly here is when the Government say under Universal Credit, that if your self employment is not earning you a minimum income floor of £11k per year, they will force you to seek paid employment instead. Thus many millions of self
employed working poor, could end up unemployed instead! Yet another barmy idea to erupt from the ideology department at the DWP! The reality is that the self employed dearly want to stay self employed, even when their earnings are low, to give them self respect and not be thrown onto the dole scrapheap. Yet the harsh Government rhetoric is they are not working hard enough. The Tories in particular fail to realise that for the self employed there is no such thing as being able to demand the minimum wage, a set hourly rate in many cases or let alone a Living Wage!

Hauling the self employed into Job Centres every month, scrutinising their income and threatening them with unemployment, if they dare to claim Universal Credit, is indeed a policy only the Tories could dream up. The party that supposedly supports entrepreneurs, those who would rather work for any pay than have to sign on as unemployed, is a caricature of itself.  The mantra seems to be the Tories will support only those self employed  worthy enough to already be earning £££££s and not the self employed working poor. To threaten the working poor with the dole as an alternative is indeed one of the most ill thought out, far right, nasty party policies that makes no sense. But then combined with the policies on the sick, disabled and vulnerable members of society, we have come to expect the idiotic from Cameron and co. Policies first thought out on the playing fields at Eton cannot be further from the reality of ordinary people's experiences. The self employed working poor are now a small army. We deserve better from an economy and Government that is supporting low pay, and "getting something for next to nothing" culture for our services. Come 2015 we have the power to vote this Government out. Hopefully the Labour Party will recognise  what a valuable resource the self employed are and support us, not punish us for working.