Are more people in the UK turning to self-employment out of necessity rather than choice? This debate has been raging over the last few months and the news that self-employment has reached an all time high will no doubt start people talking again.
It’s probably no coincidence that as unemployment dropped by 45,000 in the first quarter of the year, the number of self-employed rose by 89,000. According to the ONS, there are now 4.6 million self-employed individuals in Britain.
Ben Salisbury, who comments for MyFinances.co.uk, believes that the increase in self-employment is due to people who were in salaried employment but have since been made redundant. There will be some who decided to try the self-employed lifestyle, but a lot will only be doing it because they cannot find another regular job.
Salisbury went on to say that public sector workers who have lost their job could well be happy to become consultants and receive more pay for working less hours.
However, Professor Patricia Leighton disagrees with this analogy. She has been analysing freelance working during a recession on behalf of the PCG. Her results show that there is little correlation between a recession and an increase in self-employment. She believes that people do not turn to self-employment solely because they have lost their job.
The CIPD is of the opinion that an increasing number of ‘odd-jobbers’ are swelling the ranks of the self-employed. Unemployment is being kept in check but this is due to low salary increases and an increase in low productivity work.
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