As we have previously mentioned, during the recession unemployment has fallen at the same time as self-employment has increased. However, it would be wrong to assume this means rapid growth in the numbers of new businesses being created.
It emerged recently via a BBC investigation advisers encourage those on the welfare-to-work scheme to become self-employed because this makes the unemployment statistics look better.
Figures now published by no less than HM Revenues and Customs show that in the 2011/12 tax year, the average self-employed income for a man was £17,000 and just £9,800 for a woman, a 40% difference.
As you might expect the gap is widest in London where the average self-employed earnings for men are1 £25,700. On average women earned less than half of that, but still more than £10,000: In all regions bar London, the South East and Scotland the average earnings of a self-employed woman is actually less than £10,000.
This is not the income people running a business dream about and follows on from ONS data which reveals more than 50% of the ‘new’ self-employed (since the recession) are in fact women.
Put all this together and we are back to the view the increase in self-employment is due in large part to people failing to secure a job. The TUC has spoken about “bogus” self-employment where people are on zero hour contracts or who have little work and who don’t have the same benefits employees do: No paid holidays or employer pension contributions. These are not people who set out to be their own boss. Rather they are part of a flexible labour force largely taking any work in the absence of zero employment prospects.
This does seem to provide further proof that during the recovery higher paid jobs are being replaced by low cost services such as cleaning which are largely provided by woman. However woman reading this in the process of setting up a business should not get discouraged. The latest self-employment data demonstrates precisely self-employment doesn’t mean the same thing as starting a business. If you have a good business idea, can acquire your own customers (not through a 3rd party) and are prepared to work very hard, it’s possible to be successful and reap the rewards.