Self-employment is on the rise, now accounting for more than 1 in 7 workers in the UK. Technological and regulatory changes have reduced the cost and increased the ease of becoming self-employed. In many ways, this is a positive story of increased flexibility and greater economic dynamism.
But there are also reasons to worry. Our research finds that low-paid self-employment is rising. Around half (49%) of the UK’s self-employed are in low pay, measured on an hourly basis, compared with around a fifth of employees (22%). Whilst the proportion of self-employed
workers in low pay has been growing, in comparison, the proportion of employees in low pay has remained relatively stable.
There is an increasingly sharp divide between low paid workers who are employees and low-paid workers who are self-employed. The National Living Wage (NLW) is being brought in to boost the pay of low-paid workers.