The Great Leap Forward of the self-employed

Something odd happened in the UK labour market in recent months.  The total workforce grew over the last year by 459,000, and over the last quarter by 105,000.

But over the last year, the number of employees has risen by 198,000, while the number of self-employed has leapt by 285,000 – a huge 6.8%.

And most of this huge increase in the self-employed has come in the last Quarter, according to the ONS statistics – the quarter on quarter increase was 211,000, or a stunning 5%.  It applies to men and women, though the growth in women self-employed is slightly higher.

Even more remarkable, this last-quarter leap in the self-employed took place while the number of employees actually fell by 60,000.

Looking at it from the perspective of full-time and part-time work, we find the following:

  •  The number of full-time employees has risen year on year by 218,000, or 1.2%.  But the number of part-time employees has fallen 19,000 over the year, and in the last quarter by 74,000.   So more people are finding full-time employment.
  • As regards the self-employed, the number of full-timers has increased year on year  by 230,000, or 7.7%, and by 158,000 over the last quarter.
  •  The number of part-time self-employed has risen year on year by 55,000, or 4.6%.  This is entirely due to the last quarter, when the number grew by 53,000.

There are therefore two or more somewhat contradictory  trends at work – as the economy has recovered somewhat, the number of full-time employee positions has increased, and part-time ones diminished.

Yet the casualization and fragmentation of the national labour force also continues apace – with the growing army of self-employed.  No doubt this too reflects two tendencies – the increasing number of professionals choosing or obliged to become self-employed but making a good living from it, and myriad others living and working on the margins of the workforce.  At least part of the solution to the “productivity puzzle” lies in this latter trend.  But why this sudden huge surge in self-employment? Another month, another "puzzle"!

Here are charts showing the trends in employment and self-employment over the last 10 or 5 years.  We got a bit confused with our reds and blues, in showing the Labour and Conservative--LibDem Coalition periods!

all self employed 10 yrs
all self employed 10 yrs
all employees 5 yrs
all employees 5 yrs
full time self employed 10 yrs
full time self employed 10 yrs
part-time self-employed 10 yrs
part-time self-employed 10 yrs