The 20-year stagnation in earnings are as a result of shift in self-employment over the last two decades, according to a new report published Tuesday by the Resolution Foundation.
These shifts includes the decline in full-time work and the falling share of self-employed business owners who have staff of their own.
The Foundation’s latest Earnings Outlook focuses on the returns to work of the UK’s self-employed workforce – a group that has grown by a remarkable 45 per cent since 2001-02, but whose earnings have fallen by around £60 a week over the same period.
Self-employment is in the spotlight as people question whether the recent growth in the workforce represents a new wave of entrepreneurship and a desire for flexible working, or a tool for businesses to hold down pay and restrict workers’ rights.
The report shows that typical weekly earnings for self-employed workers grew steadily in the late-1990s and early-2000s, stagnated in the run-up to the crash and then fell by a quarter in the wake of the financial crisis.
The recovery in earnings over the last year means that they are almost back to levels last seen in the late-1990s at around £240 a week, though this is still 15 per cent down on 1994-95 returns.
The Foundation notes that these earnings figures over a 20-year period relate to a very different population of self-employed workers, with the change in the make-up of the group over time going some way to explaining why returns have fallen. The proportion of owners with staff of their own has fallen from 23 per cent to 11 per cent between 2001-02 and 2014-15, as has the share of those working over 40 hours a week (from 51 per cent to 35 per cent over the same period).
Before the financial crisis hit, these changes in the make-up of the self-employed population fully explained the flat nature of typical earnings, with the group increasingly comprised of lower earning workers.
However, since the financial crisis self-employed 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.
The Foundation says that while the analysis shows a fall in the number of self-employed owners with staff, it doesn’t necessarily hold that the rest of the group are ‘working for themselves’. It notes that some self-employed workers still consider themselves to be ‘managed’, either by large employers or even by a smartphone app if they work in the gig economy.
Indeed, the vexed question of whether some self-employed workers share the same working characteristics of employees – and should therefore be entitled to sick pay, annual leave and the National Living Wage among other things – is currently being debated by the high court in a case taken against the firm Uber by the GMB union.
However with the number of self-employed workers standing at a record 4.8 million – or 1 in 7 workers – the Foundation says that it’s clear self-employment stretches well beyond the budding entrepreneurs and gig economy workers that the sector is often characterised by.
The Foundation says that the growth in self-employment – and the lack of growth in earnings – highlights why the government is right to review employment practises in modern workplaces. However, it warns that the review needs to have a broad remit, and not ignore for example the role of tax alongside employment regulation.
Adam Corlett, Economic Analyst at the Resolution Foundation, said:
Almost five million workers across Britain are now self-employed. But while the self-employed workforce is getting bigger, typical earnings are actually lower than they were 20 years ago.
“Prior to the financial crisis, this stagnation was as much about the changing nature of self-employed work, rather than individual rewards. But since the crisis the returns to self-employment have fallen sharply even when measured on a like-for-like basis.
“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.
“For many people, self-employment brings a freedom that no employer can provide. But the growth of low pay and short hours, along with a summer of protest about conditions, means that its no surprise some workers in the ‘gig economy’ feel that self-employment is just a positive spin on precarious work.”
A Good Look At How Homes Will Become More Energy Efficient Soon
Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.
There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.
1. The Rise Of Smart Windows
When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.
If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.
2. A Better Way To Cool Roofs
If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.
Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.
3. Low-E Windows Taking Over
It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.
They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.
4. Magnets Will Cool Fridges
Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.
The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.
5. Improving Our Current LEDs
Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.
That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.
Maybe Homes Will Look Different Too
Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.
ShutterStock – Stock photo ID: 613912244
IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”
IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.
Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.
Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.
Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:
“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.
We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.
There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.
We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”
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