As the Bank of England lowered interest rates, the U.K. unemployment is just 4.9 percent and employment is at record levels. However, many of those classified as employed are actually self-employed or in freelance roles, with some data suggesting that as many as 80 percent of the self-employed people in the U.K. live in poverty. Has Britain become a nation of entrepreneurs after the global financial crisis or is growing self-employment masking a hidden poverty crisis?
CCTV’s Olly Barratt reports. Follow Olly Barrett on Twitter @ollybarratt
Growing number of self-employed could mask poverty in British economyAs the Bank of England lowered interest rates, the decision comes with U.K. unemployment at just 4.9 percent and employment at record levels. However, many of those classified as employed are actually self-employed or in freelance roles, with some data suggesting that as many as 80 percent of the self-employed people in the U.K. live in poverty. So has Britain become a nation of entrepreneurs after the global financial crisis or is growing self-employment masking a hidden poverty crisis. CCTV’s Olly Barratt reports.
Being self-employed can be an uphill struggle. For Steve Folland, freelance video creator, however, it’s the perfect and modern solution.
“Why work nine to five sort of thing?” Folland said. “If actually you’ve managed to do all that work in the morning, and you can just do something different in the afternoon, be it your own project or hanging out with the kids or whatever.”
Folland is part of the growing army of Britain’s self-employed. While it’s working out for him, he acknowledges it can be tough.
Folland also said there’s no certainty, as people don’t know their money will be coming from at the end of each month.
But those registered as self-employed, even if they aren’t earning enough to keep themselves above the poverty line, will not show up in the unemployment rate.
For those who are employed, pay has been rising slowly and productivity is low.
“If you’re not seeing wage increases then unemployment at very low levels is purely vanity, because the people who are employed are not benefiting from it,” Jeremy Cook, chief economist at World First, said.
Nonetheless, since the financial crisis, Britain has been the envy of many European rivals as it’s cut public sector jobs and seen the private sector more than replace them.
That has led to it being described as Britain’s “jobs miracle,” since unemployment in the U.K. is lower than it’s been since July 2005 .
But for some, the last crisis became a time of opportunity. After the global financial crisis Brent Hadfield decided to set up a new business making pods for coffee machines, despite the difficult conditions.
“For me it was just an analysis of the risk I was relatively young and I thought you know what, how hard can it be,” Brent Hadfiled, co-founder of Cafepod, said. “Worst case is it doesn’t succeed and we try something else.”
It did succeed and his company now boasts millions of dollars in annual revenue. So even if Britain’s so-called “jobs miracle” is masking some worrying labor market statistics, it’s possible to find those success stories that did grow out of the turmoil of the financial crisis.
Brian Beary on UK economy and industries of post Brexit
For more about U.K. economy and industries post Brexit, CCTV America’s Rachelle Akuffo interviewed Brian Beary, Washington-based journalist, EU expert and contributing editor to European Affairs.