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The ‘gig economy’ – are contractors getting their share of the takings?

According to reports showing UK self employment figures up by 45% since 2002

Being your own boss, working hours convenient to fit in with the family’s busy timetable, building a business out of a hobby or a moment of inspiration, or leaving a secure job in the city for a slower pace out in the sticks – these may all seem like attractive propositions.

Statistically, more and more of us are choosing one of these options, according to reports showing UK self employment figures up by 45% since 2002.

Many dream of a successful multinational emerging from the cobwebs in their garage, emulating the successes of Apple, Facebook or Google. The reality is all too often unreliable debtors, little time off and failure to meet even conservative expectations, although surprisingly, most small businesses now survive five years or more.

The employment statistics don’t lie, but many people join the self-employed ranks by none too subtle changes in employee terms of reference, scrubbing holiday pay, sick leave, employer pension contributions and suchlike, to boost the corporate balance sheet.

Employment law doesn’t protect this status change with the full legal rights given to permanent staff, yet governments drool over flattering figures suggesting a growing national entrepreneurial spirit. The neoliberal economists’ glamorised ‘gig economy’ is predicted to grow further, according to a study by Intuit, which forecasts as little as 60% of the American workforce on permanent contracts by 2020. Similar figures are also likely to be seen in other countries, as businesses copy convenient and profitable business models.

Is anything being done to fight back? Employees of a budget airline, who were on zero hours contracts, took collective action, by circulating a ‘safety petition’ highlighting concerns that planes were taking to the skies with tired or ill pilots who were being pressurised into flying, to avoid a cut in pay. Senior managers greeted this protest with threats of dismissals, on the grounds of gross misconduct, but a similar collective approach is being adopted by others, including workers at Uber and Deliveroo, to try to rebalance employment rights.

In developing economies, self employment is not a choice for the poor, but a means of survival. Rummaging through domestic waste for recyclables might eke out a living, to provide basic education for one’s kids. Those kids might aspire to a career as a civil servant, with a regular monthly salary and a government pension at the end of 40 years’ service.

What a strange concept! Rather than modernising to a trendy economy based on self determination, innovation and economic freedoms, is the job marketplace taking a backward step? There are worrying indicators. According to a recent study, average income for contractors is less than in 1995, with some reporting returns, after expenses, of barely half the current national minimum hourly rate. Couple this with poor investment guarantees, the outlook for the self employed after retirement age also looks pretty bleak.

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