British labour market – rise in self-employment driving growth

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1. Some good analysis there.
   There’s a couple of comments i’d like to add:
   Firstly i’m sure you’re aware there have been court cases surrounding what constitutes ‘self-employed’ in the UK, most notably Pimlico Plumbers and Uber. Companies routinely abuse this status to save them having to offer the employment rights of an employee ‘on the books’.
   Secondly, is there any data on the other type of underemployment? That is workers who are grossly overqualified for their current employment. Eg Graduates working in pubs etc. I’d suggest that’s a major issue as well and reflects the low-skill nature of the UK jobs market.

2. Bill,

   I do not believe pay rise data for the self employed in the UK as they are poorly recorded by HMG agencies. Like UK inflation indexes overall pay data appear to be manipulated to give the required output.

   Regards

3. Ian McKay – the other attraction of self-employed or ‘consultant’ staff to employers is that, for such workers, they don’t have to pay employers’ nation insurance contributions (this is 13.8% of the salary amount over an allowance) nor do they have to bother with the new compulsory pension schemes.

4. And then there are the mental health problems that current working practices are producing. Such as extreme bullying. There was bullying previously, but it has increased in intensity and frequency during the neoliberal era. And bullies tend not to be moved, which they were before, well 40 years before.

   Yorkshire Water has decided to train their some of their work force to sort of be councellors so that they can spot mental health problems in order that they can be dealt with before there needs to be a consultant referral to someone who is actually trained to deal with mental health problems. A truly neoliberal solution for what is a serious and seemingly increasing problem.

   Then there are those who have been asked to take on jobs that used to be done by two or three people. These workers don’t feel that they can refuse, so Darconian are some working environments. A not insignificant number of them develop mental health problems.Quelle surprise.

5. The Brexit referendum may not have had much of an effect, but I would not expect that it would, as most businesses seem to have been waiting to see what sort of ‘deal’ the government was going to produce. Now that they are getting an idea, we can wait and see. Tesco’s has already decided to close their fresh meat and fish deli counters with the consequent loss of some 15k jobs. Staff canteens are also to be replaced by vending machines. This is neoliberalism at its best. Brexit is only one of the factors here. It may be surmised, however, that it may not prove to be insignificant.

   Neoliberalism, however, is not responsible for shops stocking fewer products, some of the shelves being partially empty, and choice being significantly reduced. At least, in parts of the north.

6. I commend Prof Bill Mitchell for his great contributions to reality economics by his research and work on MMT and the Job Guarantee.
   This is how a Nations Economy should be run, for the benefit of its people.
   Unfortunately the Credit Creation process has been captured and privatised since the first Central Bank was established as the Bank of England by a Scotsman William Paterson in 1694.
   Since then the vested interests of the Financial and Banking system have captured the political and Treasury Dept of many countries.
   They will not allow an MMT System to disrupt their extraordinary privilege of control over credit creation and the economies reliant on that credit.
   Germany has solved that problem over a hundred years ago by the establishment of small non-profit community banks ,such as Sparkasse, dealing only with local SME\’s.
   There are at present approx. 1500 such community banks in Germany.
   Germany\’s success as an Industrial powerhouse is directly linked to the SME\’s availability of credit from these small local community banks. The SME\’s are also the biggest employer.
   This system of local bank credit creation, while not fiscal as MMT is a route to more equitable wealth distribution via employment and a means to direct investment to Industrial wealth producing manufacture.
   It is estimated that over 80% of the credit creation of the 5 main British banks goes to Finance Capitalism ie FIRE sector., with just 4% to Industrial development.
   Germany invests over 70% of its credit creation in Industrial development.
   The ECB has recognised the threat to its monopoly position by community banks ,and has begun a process to eliminate them and credit unions by the imposition of onerous regulatory processes.
   This is another good reason for Brexit.

7. Correction:

   I meant to say that neoliberalism is not solely responsible for reductions in product choice and stocking decisions, as this is fairly recent in certain respects. Both factors, neoliberalism and Brexit chaos, could be said to be interacting here to produce a convergent result.

8. Does anyone know of any research or a clear layman’s description of the interaction of in work benefits with part time self employment in the UK? In particular working tax credits. A graph of UK spending on in work benefits over time would be useful. There must have been some work done on this prior to the roll out of universal credit.

9. When the definition of the word “employment” has been so diluted by neoliberalism that it now includes gig jobs, temp jobs, part-time jobs, zero-hour jobs, etc.–and working only one hour per week in such a job is sufficient to put one in the “employed” column–it strikes me that we need improved terminology to accurately assess how well the economy is meeting the basic human need to earn a living. What if a group of economists, interested in exploring quality as well as quantity, created a new category called adequate or meaningful or substantive employment, which would require the opportunity to work full-time with decent pay and benefits and with a reasonable expectation of job security? That’s what “employment” generally meant when I was a young man in the states, and I’d be very interested in knowing how many people today are “employed” in this sense both there and elsewhere.

10. I agree with Newton on this. It is time for labor economists to push meaningful/substantive employment as the default term, something that can grab the average person. The others could be lumped under some passable equivalent for shit employment. We obviously can’t use this term, however much I would love to.

11. It could be that the word “substantive”, in relation to employment has become historic for some. At the gym this morning there were quite a few old-dears who, having to work past the former pension age of 60, prefer part-time employment these days.

    In fact the gym car park bore testament to the number of people who don’t work 9-5 nowadays – and monthly gym subscriptions are not that cheap, either. And you won’t catch me arguing with these muscular women over the few bikes that are unclaimed.

    The forecast this week is for snow – I wonder if my small neighborhood squad of construction agency workers expect to get paid if they fail to turn up at a site 50 miles away, (like you would expect full-time employees to). I do suspect they know of their holiday entitlements etc, however – though some agency workers suffer in ignorance of these.

    The Resolution Foundation (https://www.resolutionfoundation.org/publications/the-good-the-bad-and-the-ugly-the-experience-of-agency-workers-and-the-policy-response/) published a paper on 30th November 2018 entitled The good, The bad and The ugly which highlights the downside of much agency work (low grade and comparatively low paid, for instance).

    In a way Larry highlights this by referring to the plight of Tesco workers, who now face an uncertain future in a sector that is being crushed by consumer and technological changes. In recent times food has become readily available in enticing pre-packaged format, defeating the purpose of in-house preparation.

    The problem for governments is to identify changes across a whole swathe of sectors and adjust policy in time to avoid employment upheavals – an almost impossible task. But in Tesco’s case, Larry, we need to be wary of where our sympathies lie – Bill is a fully paid-up vegan.

12. Larry & Newton – Is there any reason why Underemployment does not show what you are talking about?

13. Matt, certain data tables organize data in accordance with our and additional categories, but they are not thereby as attention grabbing as some would like. Groupings need to be added akin to the ones we suggest above to garner this attention, say. Care must be taken so that theoretical objectives of the Labour economist are not impeded. Such data is organized in matrix form. Bill has used them before. Does this make sense to you?

14. Matt, my guess would be that the current unemployment rate in America, for example, if the analysis were limited to good steady jobs with decent pay and benefits (the kinds of jobs prevalent in the America of my youth), would be a SHOCKINGLY high number, one that would stick indelibly in people’s minds, as opposed to trying to ferret out so-called underemployment information from a maze of statistics. If we’re to mobilize the masses struggling under neoliberal austerity, and reclaim a progressive state as Bill and Tom urge us to do, then I believe we need these kinds of startling, unflinching numbers that speak loudly and clearly all by themselves.

15. I’ve always thought that housing costs should somehow be brought to bear on wage statistics as shifts in housing costs revalue the real wage.

    The rise in housing costs are not uniform, of course, so there would have to be a way of representing this. I don’t have the skills in statistics to do this but I’m sure one could measure the impact.

    Talking about wage rise without factoring in housing costs must give a skewed picture.
    I would have thought that one could graph the impact of housing costs and also show the flow of financial assets from wages to those siphoning off these costs. This wealth transfer is vital to see what is going on in the UK.

    I probably nee a three year intensive econometrics course!