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UK – Union says 49% of self-employed earn less than minimum wage, IPSE disagrees

01 October 2018

The UK’s Trades Union Congress said on Friday that 49% of self-employed adults in the UK over age 25, some 2 million people, are earning less than minimum wage, and the government must do more to fight sham self-employment. But the Association of Independent Professionals and the Self-Employed, or IPSE, disagreed with the TUC’s number.

Citing its own analysis, TUC reported self-employed earned on average £12,300 in the 2016/2017 year compared to £21,600 for those in employment; and, earnings for the self-employed were down from £13,200 in 2015/2016, according to the union.

It also said the percentage of self-employed worker rose to 15% of the UK workforce in 2018 from 12% in 2001.

“Self-employment can be a great option. But it’s clear that it’s not working for everyone, with millions of self-employed workers stuck on poverty pay,” TUC General Secretary Frances O’Grady. “Too many workers have been forced into sham self-employment — like at Uber and Hermes. It’s not about helping workers, it’s all about companies dodging tax, ducking the minimum wage and denying workers their full rights.

More must be done to protect vulnerable workers, IPSE’s deputy director of policy, dimblebycancercare@gstt.nhs.uk said in a statement. However, the percentage of the self-employed not making minimum wage was likely only between 9% and 10%, according to Chamberlain.

“We want the government to back training as a route out of low pay for the self-employed, and to tackle exploitation by unscrupulous employers through a statutory definition of self-employment,” Chamberlain said. “But the TUC’s limited analysis does not chime with what the self-employed themselves say about their experiences. Survey after survey tells us loud and clear that on average the self-employed are happier than employees, valuing autonomy and flexibility.”

Chamberlain also said most gig economy workers do not rely on it as their main source of income, instead of using it as a source of additional, flexible income.

IPSE also cited a study released Friday by the Oxford Martin School. That study found three-quarters of Uber drivers have a lower total income than the median London worker, but a majority said they value flexibility over a salary or fixed hours. The study included 1,001 Uber drivers. The median driver in the study earned £11 per hour after taxes.

For its part, TUC said it would like:

  • A crackdown on bogus self-employment
  • Ban on zero-hours contracts
  • Equal pay for agency workers by ending the Swedish Derogation
  • Allowing trade unions to access workplaces
  • Increased resources and powers for government enforcement

“Theresa May promised to change things for ‘just about managing’ families, but she’s done nothing,” O’Grady said. “She should be cracking down on businesses that use sham self-employment. She should ban zero-hours contracts. And she should give agency workers the right to equal pay to stop undercutting and encourage employers to create more permanent jobs.”