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Self-employed earnings lower than 20 years ago

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18/10/2016
The average earnings of the self-employed in Britain are lower than they were 20 years ago, according to a study.

The Resolution Foundation said the changing nature of self-employed work – such as shorter working weeks- and the financial crisis were to blame for the two-decade long stagnation in earnings.

The report said the self-employed workforce has grown by 45% since 2001-02, but their earnings have fallen by around £60 a week over the same period.

It shows that typical weekly earnings for self-employed workers grew steadily in the late-1990s and early-2000s, stagnated in the run-up to the crash, and then fell by a quarter in the wake of the financial crisis.

The recovery in earnings over the last year means that they are almost back to levels last seen in the late-1990s at around £240 a week, though this is still 15% down on 1994-95 returns.

Adam Corlett, economic analyst at the Resolution Foundation, said: “Almost five million workers across Britain are now self-employed. But while the self-employed workforce is getting bigger, typical earnings are actually lower than they were 20 years ago.

“Prior to the financial crisis, this stagnation was as much about the changing nature of self-employed work, rather than individual rewards. But since the crisis the returns to self-employment have fallen sharply even when measured on a like-for-like basis.

“Modern self-employment is less likely to involve very long working weeks, and today’s workers are far less likely to be business owners with staff of their own. And while returns may have increased recently, many workers are still feeling the painful effects of the financial crisis.”

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