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Freelance shift points to hidden unemployment

19-11-2020

A new Institute for Fiscal Studies (IFS) study suggests that some of the surge in self-employment may reflect “hidden unemployment” rather than a desire to be an entrepreneur or “people pursuing appealing business opportunities”. The report says the increase in the number of self-employed people from 2.3m in 2000 to nearly 4m last year has been “entirely driven” by sole traders and owner-managers of companies with no employees. It adds that these people “appear to be an increasingly marginalised group compared with employees”, saying their increasing prevalence may partly reflect a lack of opportunities in traditional employment. IFS analysis shows that in 2019/20, the self-employed earned 30% less than their employed counterparts, while a quarter of the newly solo self-employed were most recently unemployed. Andy Chamberlain, director of policy at the Association of Independen t Professionals and the Self-Employed, has questioned the IFS’ findings, saying the “vast majority” of people have made “a positive choice to move into the sector”, pointing to research showing that just 5% of people said they began working for themselves because they had lost their previous job.

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