Everyone has a business in them, according to the enterprise campaign recently launched by David Cameron. The self-employment rate is already at its highest level since the 1930s. But as a new report from the Chartered Institute of Personnel and Development (CIPD), based on official figures, suggests that these new entrepreneurs are in fact a growing class of vulnerable workers. The CIPD describe the bulk of the new self-employed as “odd jobbers desperate to avoid unemployment”.
83% of the UK’s 4.1 million self-employed earn less than the average income. Pensions are paltry, income insecure. As for the social protection employees take for granted – sick pay, maternity leave, holiday pay and redundancy: for most of the self-employed it’s an unaffordable pipe dream. Some will of course grow and become the job creators of the future. Others will trade-off low incomes for the intangible but deep satisfaction that comes with being in control of your work. But for many, self-employment is built on thin ice.
The growth in self-employment is part of the shift from public to private sector employment that the coalition government is accelerating. Today’s newly self-employed are different from those in previous recessions: more likely to be public sector professionals, female and part-time. Women comprise two-thirds of public sector jobs, and they have seen a sharper — 10% — upswing in self-employment since 2009.
Many of those newly self-employed are union members. So how are unions helping them to make the transition to self-employment? In an unscientific survey, I couldn’t find anyone who felt their union had done much to help. “The union was not of any help at all when making the transition to self-employment as their focus is 100% on the employee”, was a typical comment, along with: “out of touch”, “in the past”, “not relevant to me”. Not surprisingly almost all of those former members have left
their union, along with 165,000 others between 2009 and 2010.
Those workers desperately need and want transition support, training, social protection, insurance and legal information: the sort of services that unions have particular strengths in delivering. Here in the UK, creative industry unions like the Musician’s Union do have excellent services in place for freelancers and the self-employed. In the United States the Freelancers Union is the fastest growing labour union. In Denmark, the Netherlands and Germany the large unions have developed attractive packages for freelancers and the self-employed and they are actively recruiting large numbers. In the Netherlands unions that focus on self-employed workers are growing faster than other unions.
Meanwhile the large UK unions are doing little to retain self-employed members, never mind attract more. Search ‘self-employment support’ on the websites of large unions active in industries with high proportions of freelancers. The terms their search engines associate with the search are almost entirely negative: ‘bogus’, ‘false’ and ‘fake self-employment’, ‘creeping privatisation’ and the like. Those are important issues, where unions do an excellent job protecting their members, but it’s not the full story. It’s definitely not a welcome mat for the self-employed.
So how do the self-employed feel about the unions? The answer, according to one brand expert, is “with envy”. Unionised workplaces now have the attributes of a luxury brand for the secure few rather than the insecure many. Talk of avoiding the ‘race to the bottom’ in pensions is rich indeed to those already there.
Unions came into being to stand up for vulnerable workers in the industrial revolution. That revolution peaked a long time ago, and with it the dominant large corporate employee environment, in both the private and public sectors. Effective social responses to our increasingly flexible economy are yet to emerge. Trade unions for the self-employed could be one way forward. It’s a huge opportunity for unions to meet needs, and to be more inclusive and relevant. Most importantly it’s an opportunity to get back to their own founding values of standing up for the most vulnerable workers. The self-employed need effective, modern unions. And if they are to grow and flourish in the twenty-first century, the unions might just need the self-employed as well.
This article is based on Erika’s presentation to the Fabian Society Conference in January, 2012.