tag:theconversation.com,2011:/uk/topics/self-employment-31513/articlesSelf-employment – The Conversation2021-04-28T15:00:42Ztag:theconversation.com,2011:article/1552372021-04-28T15:00:42Z2021-04-28T15:00:42ZWill the pandemic really shape the future workplace?<figure><img src="https://images.theconversation.com/files/396058/original/file-20210420-19-uw024x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Some workers prefer a hybrid approach, whereby they can alternate between working at home and in the office</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>The workplace and modes of working have come into the spotlight amid COVID-19 lockdowns that have enforced remote working as the new norm for most businesses. Companies have had to review their practices to accommodate <a href="https://www.iol.co.za/business-report/companies/five-key-working-trends-for-2021-956411fb-64c3-42f6-99fd-17b1b595bc1d">a hybrid-approach</a> which allows employees to spend some time in the office to create social work experiences.</p>
<p><a href="https://theconversation.com/how-the-pandemic-will-shape-the-workplace-trends-of-2021-152277">Research</a> suggests that the pandemic could also shape other future workplace trends. Two trends stand out: the rise in telework and virtual collaboration on the one hand and the increasing divide between formal and informal work on the other.</p>
<p>The COVID-19 pandemic has reminded us about the great divide between ‘them’ and ‘us’, inequalities, and exploitation in informal workplaces. The dire reality of <a href="https://doi.org/10.31234/osf.io/gkwme">unemployment</a> is a major challenge. Joblessness is exacerbated by the use of the informal sector as a <a href="https://www.wits.ac.za/media/wits-university/faculties-and-schools/commerce-law-and-management/research-entities/scis/documents/SCIS%20Working%20Paper%204.pdf">shock absorber</a>.</p>
<p>The contractual labour market has shown a steady growth over the past decade. This <a href="https://ccs.ukzn.ac.za/files/Outsourcing%20in%20South%20African%20Universities.pdf">casualisation</a> of work can have positive and negative consequences. In South Africa, which has a long tradition of work casualisation, the effect has not always been positive as some workers have been <a href="https://www.researchgate.net/publication/318277114_CASUALIZATION_OF_WORK_IN_CONSTRUCTION_AND_THE_PLIGHT_OF_WORKERS_IN_BLOEMFONTEIN">victimised and exploited</a>. They have also not been provided with basic provisions, including personal protective equipment, to enable them to do their jobs. On the other hand, trends like the rise of the gig economy, flexible labour and self-employment form a significant part of the developing economy and the potential for job creation.</p>
<p>Faced with the pandemic and the key role of work in our lives it is important to consider the impact on work and workplaces. In particular, we should consider two questions: Who works and how or where are they working? These questions are particularly pertinent in countries like South Africa which have very high rates of job losses. These countries have also seen the expansion of remote work in the formal sector, opening up opportunities for more work casualisation.</p>
<h2>Informal versus formal</h2>
<p>The idea of who works centres on types of workers and their identity. The pandemic has highlighted the divide between types of workers, for example those in the informal versus formal sectors. It has further created new types of divides between ‘us’ and ‘them’, including ‘essential’ versus ‘non-essential’ and frontline versus remote workers. Workers in the formal sectors, for example, had more support from their organisations during the lockdown. Employers helped facilitate arrangements for working from home. Informal sector workers had no such support.</p>
<p>Most workers in developing countries, including South Africa, aren’t part of the formal employment labour force. They work in the informal sectors, and are often referred to as casual labour in <a href="https://www.jstor.org/stable/27667343?seq=1">precarious jobs</a>.</p>
<p>There are currently about 2.5 million casual or informal workers in South Africa. This working arrangement holds benefits, but also a potential dark side. The <a href="https://www.businessinsider.co.za/uber-eats-strike-and-pickets-at-fast-food-outlets-2021-1">strike by Uber Eats</a> drivers was a case in point. The Competition Commission found that these drivers were earning below the minimum wage. This trend of working in the <a href="https://www.investec.com/en_za/focus/economy/rocking-the-gig-economy.html">gig economy</a>, is also often not a choice but a necessity for workers. </p>
<p>But precariousness also offers greater flexibility and mobility for the higher skilled with greater negotiation power. In South Africa, <a href="https://www.investec.com/en_za/focus/economy/rocking-the-gig-economy.html">the gig economy has grown</a> as more people turn toward greater flexible work arrangements. They feel empowered and the demand for flexible working arrangements is growing. The lockdown has demonstrated to organisations that remote work which is enabled by technology is not only possible, but also efficient. More companies are creating opportunities for working remotely. </p>
<p>The spike in casualisation could also potentially help flip the paradigm and stimulate a new direction on how to ensure meaningful work for all. If leaders and people practitioners can evolve the best people practices deployed in the formal sector, to also serve the informal economy, it may open new avenues in stimulating economic and life empowerment. </p>
<p>This calls for applying standards on human dignity in work, as articulated by the <a href="https://www.ilo.org/global/standards/lang--en/index.htm">International labour organisation</a> and country labour laws, to how all people in the work cycle is treated. </p>
<p>This could be done by large employers holding their service providers accountable to ensure workers have the minimum standards in wages and benefits in place, and are treated with dignity and respect.</p>
<p>A large proportion of organisations deploy service providers or casual labour, to deliver parts of their business processes.</p>
<p>Organisational leaders should thus consider all workers in their operational value chain, formal and informal, through a humanitarian lens. This does not imply full time employment for all but rather, a level of accountability and dignity. </p>
<p>In so doing, contracting, and outsourcing along the value chain could include principal stipulations on minimal accepted people practices. Work in general serves a greater purpose than just earning an income, but can also provide <a href="https://repository.up.ac.za/bitstream/handle/2263/60501/Breytenbach_Relationship_2017.pdf?sequence=1">meaning</a> and purpose, <a href="https://journals-sagepub-com.ez.sun.ac.za/doi/full/10.1177/0890117118776735a">social connection</a>, status and structure. Business leaders therefore can contribute toward <a href="https://www.up.ac.za/media/shared/213/Articles%20on%20RL/Batch%203/mirvis-et-al-responsible-leadership-emerging-final.zp143780.pdf">responsible leadership</a> across the value chain in the full ecosystem of work. </p>
<p>Furthermore, beyond corporate social initiatives, business should have a sustainability and empowerment strategy that supports success of individuals beyond their own business success. The <a href="https://www.weforum.org/agenda/2020/11/whats-the-biggest-opportunity-for-change-after-the-pandemic/">World Economic Forum</a> recommends a ‘break out of the boardroom’ to see those outside formal business structures.</p>
<p>What matters is engaged and effective people who can thrive under responsible leadership in a supportive culture. Location then, as influenced by understanding the disruption, should facilitate collaboration and engagement, and match expected outputs with workers and their location.</p><img src="https://counter.theconversation.com/content/155237/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Natasha Winkler-Titus is affiliated with the Society of Industrial and Organisational Psychology South Africa. </span></em></p>If the best people management practices of the formal economy were to be deployed in the informal economy, new avenues of stimulating economic and life empowerment may be opened.Natasha Winkler-Titus, Senior Lecturer in Leadership and Organisational Behaviour at the Business School, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1408402020-06-17T20:05:26Z2020-06-17T20:05:26ZA long way to the top: Australian musicians balance multiple roles to make their careers work<figure><img src="https://images.theconversation.com/files/342019/original/file-20200616-65921-clq3mi.jpg?ixlib=rb-1.1.0&rect=51%2C8%2C5760%2C3819&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Danny Howe/Unsplash</span></span></figcaption></figure><p>Over the past three years, our <a href="https://makingmusicwork.com.au/">Making Music Work</a> project has mapped the creative, social, cultural, and economic realities of a music career in Australia. </p>
<p>We surveyed nearly 600 musicians to understand their working lives, creative goals, career paths and economic circumstances. We also conducted interviews with 11 diverse musicians to explore their careers in more depth.</p>
<p>Our study shows the vast majority of Australian musicians undertake a portfolio career which encompasses concurrent and often impermanent roles. This is not a new phenomenon but in recent decades there have been <a href="https://doi.org/10.1080/14613808.2019.1598348">major shifts</a> in how music is made, paid for and consumed. </p>
<p>Now, the impact of COVID-19 on the funding and policy landscape has dramatically affected how musicians develop and sustain their careers – or not.</p>
<h2>Balancing acts</h2>
<p>Musicians told us they stay in the music industry because of their love and passion for music, which is central to their identity. Far from the “starving artist” myth, they combine music and non-music work in highly entrepreneurial ways. Surveyed before the current crisis, almost half (49%) the musicians in our study held two or more concurrent paid roles. </p>
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<p>We found 560 different job titles, the most common being instrumental musician (25%) and private music teacher (10%). Musicians worked in music-related jobs as disparate as composers, sound technicians and community arts workers, and non-music jobs including sales assistants, journalists and librarians.</p>
<p>We spoke to musicians from 18 years old to 65 and above. Almost 70% had worked in music for more than 10 years, with nearly one in three of them practising as professional musicians for more than 20 years. This gives an indication of how committed Australian musicians are to the industry and sustaining their music careers and creative practice over time. </p>
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<figcaption><span class="caption">Russell Morris on career longevity.</span></figcaption>
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<p>While most musicians we studied are committed to the profession, 12% said that they were thinking about leaving. </p>
<p>The most common reasons for leaving the music industry were financial stress, lack of income and caring responsibilities – all of which have since been exacerbated by the pandemic.</p>
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<h2>A live industry</h2>
<p>Performance is the most common paid activity for musicians, with two-thirds of musicians deriving at least some of their income from performance fees. </p>
<p>Live performances are also crucial for peer networking and career development. Peer networks are mostly built and maintained through events, and are key to musicians’ building and renewing skills, developing new creative collaborations and securing jobs.</p>
<p>Given live music was <a href="https://theconversation.com/there-is-no-easy-path-out-of-coronavirus-for-live-classical-music-138207">immediately</a> impacted by the COVID-19 restrictions and will be slow to return, the capacity of musicians to maintain their careers has been severely limited. </p>
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<figcaption><span class="caption">Rob Nassif on the importance of live performance.</span></figcaption>
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<p>Federal, state and local governments have initiated a range of targeted grants and subsidies to help support the sector and its workforce. However, lobby groups and representative bodies have called for significantly more funding. </p>
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Read more:
<a href="https://theconversation.com/friday-essay-the-politics-of-dancing-and-thinking-about-cultural-values-beyond-dollars-139839">Friday essay: the politics of dancing and thinking about cultural values beyond dollars</a>
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<p>On 10 June, music rights organisation APRA AMCOS published an <a href="https://docs.google.com/document/d/1AtT3Gdy8aHkhP_MZmDJcg3YW7sujyj5veF8qX8MYk2w/edit">open letter</a> with more than 1,000 industry signatories imploring the Australian government to consider <a href="https://liveperformance.com.au/wp-content/uploads/2020/06/LPA-MR-345-million-plan-to-restart-and-rebuild-live-performance-industry-4-June-2020-1.pdf">a suite of proposals</a>. </p>
<p>In making their case, the signatories assert:</p>
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<p>[w]e contribute $16 billion to the economy and we are an asset that is a lynchpin for the tourism and hospitality sectors and a powerful driver of metropolitan and regional economies and export to the world.</p>
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<h2>The employment puzzle</h2>
<p>Musicians are predominantly self-employed or are employed on temporary contracts, leaving them ineligible for the current JobKeeper scheme. </p>
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<p>Only half of musicians receive all of their income from music-related work, and the most common sources of music-related income are performance fees, music teaching and grants. The average income from all work was $41,257, with a median income of $30,576. </p>
<p>While the Australian government has permitted <a href="https://www.theguardian.com/australia-news/2020/apr/23/early-release-super-coronavirus-when-access-superannuation-how-impact-your-money">early release</a> of superannuation in response to COVID-19, our study has shown that musicians have limited access to this and other employment-related benefits. </p>
<p>Less than one-third of our survey participants reported employer-based superannuation contributions, and only 7% had access to a health plan or private health insurance scheme.</p>
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Read more:
<a href="https://theconversation.com/the-government-says-artists-should-be-able-to-access-jobkeeper-payments-its-not-that-simple-138530">The government says artists should be able to access JobKeeper payments. It's not that simple</a>
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<h2>Cause for hope</h2>
<p>In spite of the challenges, Australian musicians have shown tremendous creativity and resilience in adapting their work to online environments during the pandemic. </p>
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<figcaption><span class="caption">Emily Smart on how the internet affords opportunities to collaborate.</span></figcaption>
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<p>Musicians’ resilience is unsurprising given how creatively and financially nimble they have to be when negotiating music and non-music roles. To successfully engage across a variety of markets, genres and performance sites, musicians deploy diverse and agile skill sets. If they were to receive similar support as other sectors of the economy in this current crisis, they would be well placed to survive and thrive into the future.</p>
<p>Throughout our research, Australian musicians generously shared their expertise. They recognise the crucial role of peer networks to develop creative practices, sustain livelihoods and nurture the sector. This creative generosity will be central to the industry’s recovery from COVID-19.</p>
<p><em>Scott Harrison, Vanessa Tomlinson and Paul Draper also contributed to this research.</em></p><img src="https://counter.theconversation.com/content/140840/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brydie-Leigh Bartleet has received funding from the Australia Research Council under the Linkage scheme for the research cited in this article.</span></em></p><p class="fine-print"><em><span>Ben Green was employed as a Research Assistant on the Australia Research Council Linkage Project on which this article draws. Ben is a member of APRA AMCOS.</span></em></p><p class="fine-print"><em><span>Christina Ballico was employed as a Research Fellow on the Australia Research Council Linkage Project on which this article draws.</span></em></p><p class="fine-print"><em><span>Dawn Bennett receives funding from the Australian Research Council, Commonwealth Government Department of Education and Training, Western Australian Government and National Centre for Student Equity in Higher Education. </span></em></p><p class="fine-print"><em><span>Ruth Bridgstock receives funding from the Australian Research Council and Graduate Careers Australia.</span></em></p>Australian musicians make it work by balancing music and non-music jobs, self-employment, contracts, and a love for the art.Brydie-Leigh Bartleet, Professor and Director, Queensland Conservatorium Research Centre, Griffith University, Griffith UniversityBen Green, Postdoctoral resident adjunct, Griffith Centre for Social and Cultural Research, Griffith UniversityChristina Ballico, Adjunct research fellow, Griffith UniversityDawn Bennett, Professor of Higher Education, Curtin UniversityRuth Bridgstock, Director of Curriculum and Teaching Transformation, Professor of Learning Futures, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1384592020-05-14T15:19:17Z2020-05-14T15:19:17ZCoronavirus exposes Britain’s bogus self-employment problem<figure><img src="https://images.theconversation.com/files/335058/original/file-20200514-77239-sa8bja.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Lots of construction workers are self-employed but effectively work full time for the same employer.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-january-27th-workman-having-briefing-249921808">Shutterstock</a></span></figcaption></figure><p>Millions of Britain’s self-employed workers can now apply for financial aid to help them through the coronavirus crisis. The government has announced support of 80% of their average monthly earnings <a href="https://uk.reuters.com/article/uk-health-coronavirus-britain-selfemploy/uk-opens-10-billion-covid-19-aid-programme-for-self-employed-idUKKBN22O3D6">up to a cap of £7,500</a>. It comes as a relief for many – there are 5.2 million registered self-employed people in the UK. But a large number will not be able to benefit.</p>
<p>This is because of the phenomenon of bogus self-employment, which has many workers registered as self-employed but actually working on insecure contracts for the same employers day in day out. It has been an issue in Britain for decades and escalated significantly following the 2008 financial crisis. Now the coronavirus crisis has hit and the issue is coming home to roost.</p>
<p>I wrote about this in 1995 <a href="https://www.ier.org.uk/product/towards-insecurity-society-tax-trap-self-employment/">in relation to the construction industry</a>. Self-employment exonerated employers from paying any National Insurance for the labour services they engaged, and with lower rates of tax and insurance for the self-employed, a powerful fiscal drive pushed millions of building workers into false self-employment. It has become a uniquely British disease, unparalleled in Europe, with 60% of manual construction workers self-employed. </p>
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Read more:
<a href="https://theconversation.com/jobs-figures-mask-bogus-self-employment-in-the-shadow-economy-58017">Jobs figures mask bogus self-employment in the shadow economy</a>
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<p>With self-employment comes no employment rights, no security, no holiday pay, no safety training, no apprenticeships and no pensions. Most construction workers work for the same contractors year in year out, under their instruction and using their equipment. </p>
<p>This type of bogus self-employment has spread to lots of other areas of the economy. Since 2008, the overall number of self-employed has grown from 3.8 million to over 5 million, jumping <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/datasets/employeesandselfemployedbyindustryemp14">from 13% of the labour force to 18%</a>. Building workers still dominate, with just under a million, but they are joined now by warehouse workers, delivery and Uber drivers. Many are paid an hourly income below the minimum wage, because they are self-employed and so officially are not paid wages and have no stipulated working hours. Their employers are thus able <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/687553/The_characteristics_of_those_in_the_gig_economy.pdf">to evade the minimum wage law</a></p>
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<a href="https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=327&fit=crop&dpr=1 600w, https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=327&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=327&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=410&fit=crop&dpr=1 754w, https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=410&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/335054/original/file-20200514-77263-1b7iuk4.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=410&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Self-employed without employees is much higher than those with employees.</span>
<span class="attribution"><a class="source" href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07">Office for National Statistics</a></span>
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<p>It is important to distinguish between the genuinely self-employed and the fake self-employed. The genuine include small businesses and professional individuals providing services direct to clients and customers. The fake self-employed effectively work for a contractor or company, under their control, paid at their dictated rates of remuneration, and often using equipment they own (such as company-branded vehicles or software platforms). </p>
<h2>Government losses</h2>
<p>As well as making employment insecure for lots of workers, this type of self-employment also undermines the viability of the tax system on which the very existence of the welfare state is based. There is an immediate saving of 13.8% of the wage bill for companies that hire self-employed workers, because they don’t have to pay any National Insurance for them. But with this saving for companies comes a corresponding loss to the Treasury.</p>
<p>In 2015, I calculated the Treasury lost at least £1.5 billion per year in lost National Insurance and taxation from bogus self-employment. That’s <a href="https://journals.sagepub.com/doi/abs/10.1177/0950017014559960">just for the construction industry</a>. </p>
<p>It is impossible to provide an accurate figure for the loss of revenue arising from bogus self-employment across all sectors. But let us assume, generously, that 25% of the people registered as self-employed are genuinely self-employed businesses. That leaves 3.75 million bogus self-employed, with a median income of around £300 per week <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2018-02-07">according to government data</a>. The annual loss of revenue to the Treasury from employers of the self-employed, at 13.8% of the remuneration bill, amounts to £7.8 billion. This is an indicative figure, frankly a guesstimate. It is unlikely to be substantially lower, but could well be substantially higher.</p>
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Read more:
<a href="https://theconversation.com/the-rise-of-the-low-pay-workforce-when-seven-jobs-just-isnt-enough-106979">The rise of the low-pay workforce – when seven jobs just isn't enough</a>
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<p>Now this bogus self-employment epidemic has collided with the coronavirus crisis. By the government’s own calculations, only 3.5 million of the country’s <a href="https://www.theguardian.com/politics/2020/may/13/uk-self-employed-coronavirus-scheme-attracts-110000-claims-in-first-hours">5.2 million self-employed are eligible to even apply</a> for its new support scheme. So millions are threatened with the abyss of no financial protection. The moment they stop work, they lose all income. It would be like instant dismissal for an employee. </p>
<p>Moreover, many survive <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/654905/P11533_HE_Final_report_MASTER_draft_v6_0_PC_FINAL.PDF">on under-declared or undeclared income</a>, reducing their tax and National Insurance burden. Some will switch from employment to self-employment in the course of the year. Many will not be able to claim their full entitlement under the Treasury’s coronavirus support scheme as a result.</p>
<p>The sad irony, of course, is that the government has lost out on billions over the years to this bogus self-employment and is now being asked to bail out the bottomless pit of which it was architect. The latest figure for this bailout, covering only a proportion of those impacted by a sudden loss of income, <a href="https://www.itv.com/news/2020-03-11/chancellor-rishi-sunak-delivers-budget-amid-coronavirus-covid-19-pressure-and-focuses-on-flooding-spending-potholes/">is £30 billion</a>. </p>
<p>If there could be a silver lining to this crisis, the underlying epidemic of bogus self-employment and the vulnerability it has created needs to be suppressed once and for all – above all for the workers themselves, but also for the economy at large. Not by any vaccine, but by the justice of good law that clarifies the distinction between employment and self-employment and equitable tax regimes. </p>
<p>Self-employment should never be the cheap option of a tax free gift to employers of their services, and clients who purchase self-employment services should pay the price to protect the self-employed from the abyss into which <a href="https://hummedia.manchester.ac.uk/institutes/sci/about/people/staff/honorary-and-visiting-fellows/mark-harvey/mark-harvey.pdf">they have been so cruelly thrown</a>.</p><img src="https://counter.theconversation.com/content/138459/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Harvey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Billions have been lost in tax to fake self-employment and many registered as self-employed will struggle to get state aid.Mark Harvey, Emeritus Professor in Department of Sociology, Honorary Professor University of Manchester, Sustainable Consumption Institute, University of EssexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1014172018-10-03T12:30:27Z2018-10-03T12:30:27ZWhy optimism and entrepreneurship are not always a good mix for business<figure><img src="https://images.theconversation.com/files/238463/original/file-20180928-48650-1rp5is0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Shutterstock</span> </figcaption></figure><p>Most business start-ups end badly. While the number of new businesses created in the UK in 2016 – 414,000 – looks impressive at first, it is less so when set against the number that failed that same year: <a href="https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/bulletins/businessdemography/2016">328,000</a>. </p>
<p>Failure has always been the hallmark of entrepreneurship – only around 50% of businesses survive their first five years. And not only are the chances of survival slim, but there is evidence that on average <a href="https://www.journals.uchicago.edu/doi/abs/10.1086/262131">business owners earn less</a> than if they had remained as someone else’s employee. They also work substantially <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-6435.2007.00361.x">longer hours</a> than their counterparts in paid employment. </p>
<p>So what sort of person decides to leave the relative security and comfort of employment and invest on average <a href="https://www.aeaweb.org/articles?id=10.1257/00028280260344452">70% of their wealth</a> on the high risk lottery ticket that is entrepreneurship? And in such large numbers? The answer: optimists.</p>
<p>Sure, the potential returns from founding a successful business and becoming the next Bill Gates may be so great that the gamble is possibly worthwhile. Or perhaps the attraction of “<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1336091">being our own boss</a>”, is part of the attraction. But a dash of optimism is a powerful catalyst to action. </p>
<p>Psychologists have long documented our tendency to be optimistic. In fact, optimism is one of the most pervasive human traits. By optimism, we mean a tendency to overestimate the probability of doing well (or conversely, underestimating the probability of failure). </p>
<p>For instance, most people overestimate their <a href="https://www.sciencedirect.com/science/article/pii/0001457589900249">driving ability</a>, their <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/boer.12107">future financial prosperity</a>, and their chances of a successful, <a href="http://journals.sagepub.com/doi/abs/10.1177/0146167204271325">happy marriage</a>. Across many different methods and domains, studies consistently report that a large majority of the population (<a href="https://www.sciencedirect.com/science/article/pii/S0960982211011912">about 80% according to most estimates</a>) display an overly optimistic outlook. </p>
<p>Viewing ourselves and our chances of future success in implausibly positive ways may increase ambition and persistence. It may persuade others to cooperate with us. There may even be an element of self-fulfilling prophecy, whereby exaggerated beliefs increase the probability of success. </p>
<p>Nevertheless, there is a downside. As it is better to use correct information when making choices, optimism tends to result in faulty assessments and mistaken decisions. Yes, it may well enhance our performance but it also results in participation in activities doomed to fail. </p>
<p><a href="https://www.sciencedirect.com/science/article/pii/S0014292118301582">In our research</a>, we examine how these forces play out in business start-ups – a big decision involving much uncertainty. Previous studies have documented that optimistic thinking tends to be highest when outcomes are uncertain. It also flourishes when success is perceived to be under the individual’s control. </p>
<p>So it is no surprise that optimists are attracted to the uncertain and turbulent world of entrepreneurship. The greater an individual’s optimism, the more likely they have been fooled into thinking they have found a good business opportunity and that they have what it takes to exploit it successfully. Every episode of the BBC’s <a href="https://www.bbc.co.uk/programmes/b006vq92">Dragons Den</a> provides examples of such delusional thinking. Realists and pessimists are less likely to proceed with unpromising prospects. </p>
<p>Our findings provide evidence that higher optimism is indeed associated with lower entrepreneurial earnings. Optimism is measured as bias in forecasting personal financial outcomes when subjects are still in paid employment, prior to beginning their entrepreneurial adventure. </p>
<h2>The downside of optimism</h2>
<p>Allowing for earnings while an employee, we find that business owners with above average optimism earn some 30% less than those with below average optimism – suggesting they would have been better off if they had made the prudent choice of remaining an employee. </p>
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<p>Marriage is in some ways like starting a business. As a further test of whether optimism leads to rash decisions, we found that optimists are more likely to divorce. </p>
<p>Overall, our results suggest that many entrepreneurial decisions can be viewed as mistakes, based upon an excessive belief in the probability of doing well. Too many people are starting business ventures, at least as far as private returns are concerned. </p>
<p>It seems likely that optimism is partly responsible for the sizeable churn of business births and deaths that happen year on year around the world. Governments should therefore be cautious in adopting policies that encourage start-ups – it seems people need little encouragement as it is. </p>
<p>And while it is true that new businesses create new jobs, it should also be noted that when start-ups fail, they are responsible for a great deal of job destruction and heartache.</p><img src="https://counter.theconversation.com/content/101417/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A positive outlook is great – but it can lead to some ill judged start up ideas.Chris Dawson, Senior Lecturer (Associate Professor) in Business Economics, University of BathDavid de Meza, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1006682018-08-02T20:23:50Z2018-08-02T20:23:50ZSelf-employment and casual work aren’t increasing but so many jobs are insecure – what’s going on?<p>That <a href="https://theconversation.com/factcheck-has-the-level-of-casual-employment-in-australia-stayed-steady-for-the-past-18-years-56212">casualisation</a> and <a href="https://theconversation.com/australian-jobs-arent-becoming-less-secure-99739">self-employment</a> rates are not increasing is often trotted out to dispute perceptions that workplace insecurity is growing.</p>
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<a href="https://theconversation.com/australian-jobs-arent-becoming-less-secure-99739">Australian jobs aren't becoming less secure</a>
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<p>But retorts like this miss a few key points.</p>
<p>First, the real causes of growing insecurity aren’t the type of contracts people are on. While these things matter, the real causes of insecurity are the way organisations are being structured these days. This is designed to minimise costs, transfer risk from corporations to employees, and centralise power away from employees.</p>
<p>Second, aggregate data mask variations between industries. </p>
<p>Third (and least importantly) there are some measurement issues. </p>
<h2>Reducing cost and risk</h2>
<p>Large corporations want to minimise their costs and risks, avoid accountability when things go wrong and ensure products have the features they want.</p>
<p>This partially explains the <a href="https://s3-ap-southeast-2.amazonaws.com/wh1.thewebconsole.com/wh/1401/images/FranchisingAustralia2014_webversion.pdf">dramatic increase</a> in franchised businesses – the franchisee bears responsibility for scandals such as <a href="https://www.mybusiness.com.au/human-resources/4156-7-eleven-wages-scandal-snares-more-operators">underpaying workers</a>. </p>
<p>Other corporations <a href="https://www.afr.com/news/policy/industrial-relations/baiada-to-pay-500000-to-underpaid-contractors-20151025-gkhzg7">call in labour hire companies</a> to take on responsibility for their workers. This cuts costs and transfers risk down the chain – which means jobs are more insecure. </p>
<p>Some set up spin-offs or subsidiaries. Some just outsource to contracting firms.</p>
<p>Most people working for franchises, spin-offs, subsidiaries and labour hire firms are still <em>employees</em>. It’s more efficient for capital to control workers through the employment relationship than to pay them piece rates as contractors. That would run the risk of worker desertion or of shortcuts affecting quality. </p>
<h2>Is casualisation the same as insecurity?</h2>
<p>Even employees at the bottom of the supply chain might get annual and sick leave. Offering leave helps attract labour and might be cheaper than paying <a href="https://www.fairwork.gov.au/about-us/news-and-media-releases/newsletter/august-2014/understanding-casual-penalty-rates">casual loading</a>. </p>
<p>And there’s no need to hire someone on a casual contract if you can make them redundant when the work dries up — if, for example, you lose your contract with the main parent firm. If your firm can go bankrupt, then you often won’t even have to pay redundancy benefits. </p>
<p>There are also the measurement issues. The Australian Bureau of Statistics counts the number of “<a href="http://www.abs.gov.au/ausstats%5Cabs@.nsf/mediareleasesbyCatalogue/A4A44798D68CAFB9CA257EEA000C5421?Opendocument">employees without paid leave entitlements</a>”. People take this to mean “casuals”. On this measure, the share of casuals in the workforce has shifted little in a decade, after growing substantially earlier.</p>
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Read more:
<a href="https://theconversation.com/factcheck-has-the-level-of-casual-employment-in-australia-stayed-steady-for-the-past-18-years-56212">FactCheck: has the level of casual employment in Australia stayed steady for the past 18 years?</a>
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<p>If we take the liberty of labelling people without leave as “casuals”, then the number of <a href="http://www.abs.gov.au/ausstats/subscriber.nsf/log?openagent&63330do001c_201708.xls&6333.0&Data%20Cubes&FCE52FD7598B96D7CA25823D0018F76F&0&August%202017&26.02.2018&Latest">“casual” full-timers grew by 38%</a> between 2009 and 2017. Labour hire workers are usually casual full-time workers. </p>
<p>“Permanent” full-timers (those with annual leave) grew by just 10%. </p>
<p>On the other hand, some organisations have found relying on part-time casuals counterproductive, as workers had no commitment and became unreliable. Some large retailers now use “permanent” part-timers rather than casuals. </p>
<p>So-called “casual” part-timers <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/productsbyCatalogue/A8CAED8E5F9FB2E1CA257F1F00044E8C?OpenDocument">grew by just 13%</a> between 2009 and 2016. “Permanent” part-timers grew by 36%.</p>
<p>A lot of variation between industries and periods is hidden by aggregate figures. Franchising has grown in retailing. Labour hire in mining. Outsourcing in the public sector. Second jobs in manufacturing. Spin-offs in communications. Casualisation in education and training. Global supply chains send jobs overseas to low-paid, often dangerous workplaces in a number of industries.</p>
<p>The ABS doesn’t measure the precarity of work experienced by people who now work in franchises, spin-offs, subsidiaries or contractor firms. But as their continued employment depends on the fortunes of their direct employer, more than the firm at the top of the chain, precarity is real.</p>
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<a href="https://theconversation.com/precarious-employment-is-rising-rapidly-among-men-new-research-94821">Precarious employment is rising rapidly among men: new research</a>
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<h2>Underemployment has grown</h2>
<p>Many “permanent” part-time jobs may be good jobs. But the continuing growth of part-time employment is linked to another form of insecurity – underemployment.</p>
<p>Between 2010-11 and 2016-17, the number of hours sought, but not worked, by underemployed people <a href="http://www.abs.gov.au/AUSSTATS/SUBSCRIBER.NSF/log?openagent&6150055003do022_2016201706.xls&6150.0.55.003&Data%20Cubes&C0AC682CFBB6D9C6CA2582CC001FF16C&0&September%202017&17.07.2018&Latest">grew by 31%</a>. This is five times the total growth in hours worked. </p>
<p>Large firms don’t even need to spin off workers to smaller business units to make use of underemployment.</p>
<p>There are other important sources of worker insecurity. In Australia, for example, firms <a href="https://www.huffingtonpost.com.au/2017/08/29/streets-look-to-cut-workers-pay-and-ice-cream-fans-are-furious_a_23187395/">can seek to have enterprise agreements terminated</a>, or get a <a href="http://www.abc.net.au/news/2018-06-28/esso-protest-marks-12-months-with-union-gathering-at-longford/9918668">handful of workers</a> to sign new agreements, to cut pay and conditions. </p>
<p>Some firms seek to put employees onto <a href="https://www.theage.com.au/national/factory-workers-strike-over-contract-plan-20050503-ge0344.html">contrived</a> arrangements that make them out to be contractors. Often that’s <a href="https://www.business.gov.au/people/contractors/independent-contractors/unfair-contracts-and-sham-contracts">illegal</a>. </p>
<p>The growing insecurity and hence low power of workers – even those with leave entitlements – helps explain why <a href="https://www.thesaturdaypaper.com.au/news/economy/2018/05/12/the-truth-about-wage-stagnation/15260472006221">wage growth is stagnating</a>. </p>
<p>Indeed, the successful “<a href="https://www.smh.com.au/business/workplace/war-on-wages-australians-are-working-harder-and-going-backwards-20170803-gxoh9c.html">war on wages</a>” may be the biggest sign of worker insecurity. </p>
<h2>And what about the gig economy?</h2>
<p>The gig economy, or more accurately the platform economy, is a big challenge to the employment relationship. This is because virtual platforms provide a new, cheap form of control that may replace the need for the employment relationship. </p>
<p>But there are still limits to the use of cost cutting and of platform control. The gig economy will grow, but it won’t overtake the employment relationship.</p>
<p>Gig work is one form of self-employment and we should remember that, overall, self-employment is not increasing. Self-employment declined between 2000 and 2014 in 26 countries for which data were available, and increased in only 11 (see chart below).</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=366&fit=crop&dpr=1 600w, https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=366&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=366&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=460&fit=crop&dpr=1 754w, https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=460&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/229705/original/file-20180729-106521-3hokgi.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=460&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Changes in self-employment, 2000-2014, various countries.</span>
<span class="attribution"><span class="source">OECD</span>, <span class="license">Author provided</span></span>
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<p>What’s more, even the relative importance of large firms in total employment is not decreasing. That’s probably because of another trend — the <a href="https://www.themonthly.com.au/blog/andrew-leigh-and-adam-triggs/2017/17/2017/1495011536/few-big-firms">concentration</a> of <a href="https://www.economist.com/graphic-detail/2016/03/24/corporate-concentration">markets</a> in the hands of those firms.</p>
<p>In short, large powerful firms are getting more powerful, but their directly employed workforces are not getting larger. The result is a lot of workers with insecure incomes and a lot of insecure small-business owners as well.</p>
<p>This means insecurity gnaws away, even while the employment relationship remains the dominant mode for deploying labour, and employment with leave entitlements remains its main form.</p><img src="https://counter.theconversation.com/content/100668/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Peetz has received funding over the years from the Australian Research Council and a range of public and private sector organisations. This article does not directly arise from any of those projects.</span></em></p>Most workers are still employees, not casuals or gig workers. So what has changed to increase the insecurity of workers?David Peetz, Professor of Employment Relations, Centre for Work, Organisation and Wellbeing, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/950182018-06-22T11:10:20Z2018-06-22T11:10:20ZHow entrepreneurs have the most stressful – yet most satisfying – jobs<figure><img src="https://images.theconversation.com/files/224004/original/file-20180620-137708-iikejg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>Entrepreneurs have some of the most stressful jobs. They must grapple with uncertainty and being personally responsible (and liable) for any decision they make. They have the <a href="https://www.eurofound.europa.eu/publications/report/2001/working-conditions/third-european-survey-on-working-conditions-2000">longest working hours</a> of any occupational group. And they have to rapidly develop expertise across all areas of management from finance, marketing, procurement and operations to human resource management in the process of starting and managing their business. </p>
<p>Yet despite all this, research finds that entrepreneurs are <a href="https://link.springer.com/article/10.1007/s11187-011-9413-9">happier</a> and seemingly <a href="https://onlinelibrary.wiley.com/doi/abs/10.1348/096317909X472067">healthier</a> than people in other jobs. So how can we explain this paradox? </p>
<p>To understand entrepreneurs’ happiness, I conducted a <a href="http://amp.aom.org/content/early/2018/01/05/amp.2017.0001.short">comprehensive and systematic review</a> of 144 empirical studies of this topic, covering 50 years. Here are the five key findings that sum up the highs and lows of being an entrepreneur.</p>
<h2>1. It’s not all about pay</h2>
<p>Work on the economics of entrepreneurship traditionally assumed that entrepreneurs bear all the stresses and uncertainty associated with their work, because over the long term they can expect high financial reward for their effort. Yet the evidence shows that entrepreneurs <a href="https://www.journals.uchicago.edu/doi/abs/10.1086/262131">earn less</a> than they would if they, with their particular skill set, were working as employees. </p>
<p>When you ask entrepreneurs how they measure their <a href="http://journals.sagepub.com/doi/full/10.1177/0266242615608469">success</a>, happiness often comes out on top, alongside autonomy. Income features much less prominently.</p>
<h2>2. Highly stressful</h2>
<p>At the same time, there is substantial evidence that entrepreneurs face <a href="http://amp.aom.org/content/early/2018/01/05/amp.2017.0001.short">myriad stressors</a> that diminish their happiness. High workload and work intensity, as well as financial problems facing their business are top of the entrepreneurs’ stress list. </p>
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<img alt="" src="https://images.theconversation.com/files/224005/original/file-20180620-137725-qs3gh4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/224005/original/file-20180620-137725-qs3gh4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/224005/original/file-20180620-137725-qs3gh4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/224005/original/file-20180620-137725-qs3gh4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/224005/original/file-20180620-137725-qs3gh4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/224005/original/file-20180620-137725-qs3gh4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/224005/original/file-20180620-137725-qs3gh4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Being an entrepreneur is stressful but rewarding.</span>
<span class="attribution"><span class="source">shutterstock.com</span></span>
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<p>Although they diminish entrepreneurs’ happiness, some stressors have an upside. While they require more effort in the here and now, they may lead to positive consequences such as business growth in the long term. Some entrepreneurs appear to interpret their long working hours in this way – as a challenge – and therefore turn them into a positive signal. </p>
<h2>3. Autonomy is both good and bad</h2>
<p>The autonomy that comes with being entrepreneur can be a double-edged sword. Entrepreneurs can make decisions about when and what they work on – and with whom they work. Having the freedom to make these decisions is one of the <a href="http://publications.aston.ac.uk/25172/1/Understanding_motivations_for_entrepreneurship.pdf">key motivators</a> for the majority of entrepreneurs to start a business in the first place. </p>
<p>But, as the saying goes, there can be too much of a good thing. <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/apps.12066">Recent research</a> into how entrepreneurs experience their autonomy suggests that, at times, they struggle profoundly with it. The sheer number of decisions to make and the uncertainty about what is the best way forward can be overwhelming, especially when the constant high workload means that there is little time to carefully think through decisions. Then there’s the fact that investors and other <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/sej.1201">stakeholders can significantly limit entrepreneurs’ autonomy</a>.</p>
<h2>4. It’s not only personality traits</h2>
<p>There is <a href="https://www.annualreviews.org/doi/abs/10.1146/annurev-orgpsych-031413-091326">evidence</a> that people with certain personality traits such as self-belief or emotional stability are more likely to succeed as entrepreneurs. And, in turn, these personality traits are associated with higher levels of <a href="http://journals.sagepub.com/doi/abs/10.1177/0149206313495411">well-being</a>. But studies that consider personality traits and autonomy at the same time are scarce. </p>
<p>Nonetheless, <a href="https://link.springer.com/article/10.1007/s11187-009-9249-8">autonomy</a> still seems to be the biggest reason for high levels of job satisfaction among entrepreneurs. Plus, the personality traits that are most characteristic for entrepreneurs are relatively specific and malleable such as self-belief and initiative taking. This kind of <a href="http://science.sciencemag.org/content/357/6357/1287">entrepreneurial mindset</a> can be trained. </p>
<p>Emerging research also finds that the nature of people’s <a href="https://www.sciencedirect.com/science/article/pii/S0001879115300191?via%253Dihub">work can shape their personality</a>. This, intriguingly, suggests that people can develop an entrepreneurial personality through their work as an entrepreneur.</p>
<h2>5. An addictive mix</h2>
<p>The evidence review confirms that, by any stretch of imagination, entrepreneurs’ work is highly demanding and challenging. This, along with the positive aspects of being their own boss coupled with an often competitive personality can lead entrepreneurs to be so engaged with their work that it can become <a href="https://www.sciencedirect.com/science/article/pii/S0883902613001080">obsessive</a>. </p>
<p>So the most critical skill of entrepreneurs is perhaps how they are able to manage themselves and allow time for recovery. Prolonged exposure to work that is as intense as that of entrepreneurs takes a <a href="https://nyaspubs.onlinelibrary.wiley.com/doi/abs/10.1111/j.1749-6632.1998.tb09546.x">physical toll on peoples’ bodies</a>. Hence future research into <a href="https://www.sciencedirect.com/science/article/pii/S0883902616301641">recovery strategies of entrepreneurs</a> can help them manage their highly stressful, albeit satisfying, jobs.</p>
<h2>Entrepreneurs’ well-being matters</h2>
<p>Entrepreneur happiness matters not just for <a href="http://journals.sagepub.com/doi/full/10.1177/0266242615608469">the entrepreneurs’ themselves</a>, it also matters for their <a href="http://psycnet.apa.org/record/2000-07884-004">partners’</a> and <a href="http://journals.sagepub.com/doi/abs/10.1177/1103308813477466">children’s</a> well-being. Plus, happy entrepreneurs are less likely to <a href="https://www.sciencedirect.com/science/article/pii/S095652210800033X">give up and close their firms</a>. They are in a better position to recognise opportunities and be more effective at work, which culminates in more successful businesses. </p>
<p>Many features of the world of work today reflect challenges faced by entrepreneurs – high levels of uncertainty, intense work demands and personal responsibility among them. So understanding entrepreneurs’ happiness affords us with a glimpse into how we all may manage the demands of this new world of work.</p><img src="https://counter.theconversation.com/content/95018/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ute Stephan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Entrepreneurs must grapple with uncertainty and work the longest hours. Yet they are happier and often healthier than people in other jobs.Ute Stephan, Professor of Entrepreneurship, Aston UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/982472018-06-21T04:12:31Z2018-06-21T04:12:31ZThe gig economy is nothing new for musicians – here’s what their ‘portfolio careers’ can teach us<figure><img src="https://images.theconversation.com/files/223950/original/file-20180620-126531-1yjaugq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The 80% of musicians who freelance or are self-employed need to have an array of transferable skills to make a living.</span> <span class="attribution"><a class="source" href="https://pxhere.com/en/photo/944711">pxhere</a></span></figcaption></figure><p>The “gig economy” has been the life for musicians for many years. Despite financial instability and the prospect of unemployment, why do musicians choose this type of work? And what can we learn from their motivations?</p>
<p>A <a href="http://www.australiacouncil.gov.au/workspace/uploads/files/making-art-work-companion-repo-5a05105696225.pdf">study</a> published by the Australia Council for the Arts estimated that 15,400 musicians (excluding composers) were working in Australia in 2016. In that year, 80% of musicians were freelance or self-employed. Of the rest, 12% had a working salary or wage and 8% didn’t work in music. </p>
<p>The survey also shows that musicians undertake a wide range of arts-related and non-arts activities. This mix of activities helps with developing skills to adapt to changing environments and maintain their financial position. </p>
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Read more:
<a href="https://theconversation.com/why-gig-workers-may-be-worse-off-after-the-fair-work-ombudsmans-action-against-foodora-98242">Why gig workers may be worse off after the Fair Work Ombudsman's action against Foodora</a>
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<p>Freelance musicians will be the first to admit it’s a difficult choice of career. Nevertheless, despite this career path being a necessity for most, there are some reasons why musicians and artists (or similar employees) choose to head down it. </p>
<p>Musicians can survive under these circumstances by developing important overarching and transferable skills. A variety of reasons and skills ensures they remain employable, rather than employed.</p>
<h2>Living the gig life</h2>
<p>For musicians it is commonly described as a “portfolio career”, a career of multiple jobs – usually paid and unpaid, part-time or freelance work. Many jobs are based on short contracts or negotiated relationships where no long-term commitment is required. </p>
<p>This type of employment presents financial challenges. Benefits such as superannuation and paid leave are often missing. </p>
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Read more:
<a href="https://theconversation.com/how-gig-economy-workers-will-be-left-short-of-super-85814">How gig economy workers will be left short of super</a>
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<p>However, musicians (and other artists) consider what they do meaningful work. Personal values are at the heart of what they do, rather than organisational rewards such as a salary or promotion. </p>
<p>Musicians personally identify that their work has a purpose. Therefore, subjective measures of success and the freedom to make independent choices are significant elements of their portfolio career. The benefits include being able to take charge of their own career management and feeling empowered to grow, develop, achieve and contribute in a variety of creative and professional ways. </p>
<p>Their intrinsic success lies not in what others expect of them, but in achieving personal freedom and being true to their beliefs. It’s about meeting personal and professional needs.</p>
<p>A <a href="https://eprints.qut.edu.au/1767/">study by Ruth Bridgstock</a> found that portfolio career musicians are motivated by a self-directed working environment driven by personal values. Their career is measured by psychological success and often based on a passion for what they do. </p>
<p>Much like other fields including small-business owners, independent contractors and consultants, gig work is seen as taking charge through self-determination. They enjoy the freedom and responsibility of shaping their career, which forms part of their self-identity.</p>
<p>A <a href="https://espace.curtin.edu.au/bitstream/handle/20.500.11937/25290/20779_downloaded_stream_235.pdf?sequence=2">survey</a> of musicians’ education, training and professional practice also revealed that passion was the driving force in their careers. However, when asked if they would prefer to work entirely within the music industry, many of the respondents answered no. This suggests a personal desire to develop skills and interests in other areas. </p>
<p>The survey responses also indicate that musicians are life-long learners. They want to continually learn new skills in and outside their field. </p>
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Read more:
<a href="https://theconversation.com/why-music-is-not-lost-69130">Why music is not lost</a>
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<h2>Learning survival skills</h2>
<p>Adaptability and self-awareness are two main abilities that help make musicians ideal gig workers. In a dynamic working environment, musicians need to be open to new possibilities and to apply creative decision-making. </p>
<p>A portfolio career requires continuous learning, enterprise skills and social networking. Transferable skills, such as communication, teamwork, planning and organisation, are also necessary. Musicians demonstrate these skills through long-term and short-term career goals, the capacity to work from one project to the next, collaborating with other artists and balancing high- and low-risk ventures. </p>
<p>Musicians want to learn and have the ability to intentionally act and adapt to change. They demonstrate self-knowledge, a dependency on personal and professional networks, personal enterprise and technological skills. To survive and support their art by managing multiple jobs, musicians develop a strong capacity to self-manage.</p>
<p>Despite the challenges of working as a portfolio careerist or working in the gig economy, it turns out musicians are <a href="http://www.australiacouncil.gov.au/workspace/uploads/files/making-art-work-throsby-report-5a05106d0bb69.pdf">generally satisfied with their life</a>. The skills and attributes musicians possess reflect a flexible, self-managed career drawing on numerous experiences and passions. </p>
<p>For those who can’t have, or don’t want, a 9-to-5 career, the lessons of musicians can help them design a career that suits personal and professional needs, as well as contributing to the economy in a variety of ways.</p><img src="https://counter.theconversation.com/content/98247/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alana Blackburn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>It isn’t easy, but musicians build ‘portfolio careers’ by being adaptable, multiskilled and willing to learn, so they can pursue creative work that they believe in.Alana Blackburn, Lecturer in Music, University of New EnglandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/930372018-03-29T10:30:05Z2018-03-29T10:30:05ZWhy are more people doing gig work? They like it<figure><img src="https://images.theconversation.com/files/212467/original/file-20180328-109175-bbj2a5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Having some control over your workday can make it easier to bear.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/business-woman-working-on-laptop-computer-530237623?src=UQk0BV3e_ZMrmrZqFwIXvA-1-19">Branislav Nenin/Shutterstock.com</a></span></figcaption></figure><p>Thanks to companies like Lyft, TaskRabbit and Instacart, it’s never been easier for Americans who can afford it to zip from place to place, get groceries delivered or let someone else walk their dog. Likewise, the number of Americans who are <a href="https://www.npr.org/2018/01/22/578825135/rise-of-the-contract-workers-work-is-different-now">self-employed or independent contractors</a> is soaring. </p>
<p>The share of Americans doing everything from accounting to driving as independent contractors rose from <a href="http://www.nber.org/papers/w22667">10.7 percent in 2005 to 15.8 percent in 2015</a>, according to a study by economists Lawrence Katz at Harvard University and Alan Krueger at Princeton University. The trend was more pronounced among women, they found, rising from 8 to 17 percent.</p>
<p>Based on my prior <a href="https://www1.villanova.edu/villanova/artsci/eca/facstaff.html">research regarding labor markets and job satisfaction</a>, I wanted to know if this number was rising so fast partly because Americans enjoy the flexibility these jobs offer. To find out, I teamed up with a colleague of mine at Villanova University.</p>
<h2>Greater flexibility</h2>
<p>We already knew people take these jobs <a href="https://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy">for many reasons</a>, whether it’s as a primary source of income or as a side hustle.</p>
<p>Either way, many of these workers get enough flexibility on the job to give them some control over what they do and when they do it. That’s one reason why these arrangements are increasingly common, as a more recent study <a href="https://doi.org/10.1257/aer.p20171092">Katz and Krueger</a> carried out suggests.</p>
<p>My colleague <a href="http://www1.villanova.edu/villanova/business/facultyresearch/facultydepartment/biodetail.html?mail=mary.kelly@villanova.edu&xsl=bio_long">Mary Kelly</a> and I <a href="https://econpapers.repec.org/RePEc:vil:papers:32">analyzed data</a> gathered through <a href="http://gss.norc.org/">surveys conducted by University of Chicago</a> researchers in 2006, 2010 and 2014 to compare job satisfaction levels among Americans with different kinds of occupations and employment status.</p>
<p>The approximately 3,600 people in this nationally representative sample included workers holding down regular jobs, as well as independent contractors and self-employed workers with some degree of control over their schedules. It also included contract employees lacking autonomy and flexibility, such as those working for temp agencies or with on-call obligations. </p>
<p>We also contrasted job satisfaction for employees in managerial or professional roles with workers in blue-collar occupations, and checked whether there were any differences for men and women. </p>
<h2>More satisfaction</h2>
<p>As you might expect, we found that people with more control over their schedules and who could choose to some extent which tasks they would take on are significantly more satisfied with their work than their peers who hold regular salaried jobs – despite losing out on benefits and security.</p>
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<p>This satisfaction bump ranged between 6 and 8 percent for men and 4 and 8.5 percent for women. Perhaps surprisingly, this edge was bigger among people in nonprofessional jobs than for professionals.</p>
<p>And interestingly, women were generally more satisfied with jobs that gave them more control over their workdays than were men. That was true whether they were in professional occupations or had blue-collar status.</p>
<p>However, we detected no such added satisfaction for the workers without regular salaried positions, but whose jobs gave them little or no extra control over their responsibilities. Male and female employees in that situation were between 3 and 4.5 percent less satisfied with their work than their salaried counterparts.</p>
<p>To be sure, we cannot say exactly what it is about these jobs that Americans seem to find more satisfying. Most likely, different attributes appeal to different workers. For some it may be the flexibility, while for others it may be not being tied to a single employer. And some people, such as single parents or full-time students, may believe that these arrangements are the only way for them to work at all. Surely there are some aspects, such as having scant benefits and job security – or none at all – that they do not like, even if they find them satisfying in general.</p>
<p>But our findings do suggest that no matter how they make a living, American men and women are more satisfied with jobs that provide more control over their work day than with regular salaried jobs. We believe this signals that these kinds of jobs will probably keep growing.</p><img src="https://counter.theconversation.com/content/93037/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cheryl Carleton does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Whether they do it full-time or as a side hustle, Americans who have some say over their schedules and tasks seem to covet the flexibility.Cheryl Carleton, Assistant Professor of Economics, Villanova UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/808362017-07-11T15:28:36Z2017-07-11T15:28:36ZTaylor Review: a high principled report into the gig economy that will fail to deliver<figure><img src="https://images.theconversation.com/files/177731/original/file-20170711-14423-arbaao.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Just gigging?</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>The <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/626772/good-work-taylor-review-modern-working-practices.pdf">government’s independent review</a> on modern working practices in the UK contains some important messages. Put together by Matthew Taylor, head of the RSA think tank and former policy chief to Tony Blair, the review highlights the fact that job creation alone is not sufficient to create a “thriving economy and fair society”. Rather, progress is also needed to create “better jobs”. The focus on the quality of work underscores a broader goal to promote “good quality work for all”.</p>
<p>But the review stops short of recommending major changes in employment regulation and adopts an approach that is ostensibly business-friendly. Beyond the high principles, there is a failure to tackle the underlying causes and drivers of bad work. The fact that the government has welcomed the review speaks to its essential conservatism.</p>
<h2>Paying the price for higher employment</h2>
<p>The years since the 2007-08 crisis have seen employment rise <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/june2017">to record levels in the UK</a>. This situation would imply a favourable environment for workers to improve their pay and their terms and conditions of work. Higher employment, in theory, means that workers have stronger bargaining power to gain concessions from employers. Yet, in practice, the opposite has occurred. Workers have had to forgo both higher pay and job security <a href="https://theconversation.com/jobs-figures-mask-bogus-self-employment-in-the-shadow-economy-58017">to gain access to and maintain employment</a>.</p>
<p>The UK is the only country in the EU where <a href="http://touchstoneblog.org.uk/2016/07/uk-real-wages-decline-10-severe-oecd-equal-greece/">employment has risen at the same time as real pay has fallen</a>. The flexible labour market has delivered to employers the labour they require at lower rates of real pay. For workers, it has delivered work that is barely able to cover the cost of living.</p>
<p>The review recognises how the country’s move to full employment has been at the expense of more low quality jobs. Workers have been required to become self-employed and to take jobs in the so-called <a href="https://theconversation.com/can-universal-basic-income-counter-the-ill-effects-of-the-gig-economy-75581">“gig economy”</a> to make ends meet. These forms of employment have not only yielded poor financial outcomes for workers; they have also meant greater insecurity, exploitation and control by bosses.</p>
<p>“Bad work” (insecure, exploitative and controlling), the review says, has wider economic and social impacts. It <a href="https://theconversation.com/how-zero-hours-contracts-could-be-making-you-ill-77998">erodes the health and well-being</a> of workers. It also <a href="https://theconversation.com/how-strengthening-the-bargaining-power-of-workers-could-boost-uk-productivity-54921">holds back productivity</a> – the amount workers produce per hour – and makes the economy in general less productive. Resolving bad work is therefore seen as key to overcoming the UK’s productivity deficit and as a vital ingredient in building a more cohesive and participatory society.</p>
<p>Beyond full employment, in short, the goal should be to maximise “good work”.</p>
<h2>What’s recommended</h2>
<p>The review recommends changes to the status and entitlement of workers in the gig economy. There is a new recommended category of “dependent contractor”, which sits somewhere between full time employed and self employed status, and is designed to prevent bogus forms of self-employment. </p>
<p>There are also recommendations to make it easier for gig workers to gain benefits such as sick and holiday pay. Plus, it is recommended that agency workers and those on zero hours contracts gain the “right to request” a more formal working relationship after a 12-month period.</p>
<p>To many, the recommendations will appear too timid. Why not outlaw all zero hours contracts, for example? Others may argue that the recommendations are simply harmonising existing workers’ rights – they are bringing gig work up to what is a minimum standard of labour protection and are downplaying issues of the <a href="https://www.citizensadvice.org.uk/about-us/how-citizens-advice-works/media/press-releases/taylor-review-a-decent-first-step-towards-a-fairer-jobs-market-says-citizens-advice/">non-enforcement of existing legislation</a>.</p>
<p>Unions have declared their disappointment that the <a href="http://touchstoneblog.org.uk/2017/07/taylor-review-isnt-game-changer-gig-economy-workers-need/">report is no game-changer</a>. A sentiment that is likely to be shared by many millions of UK workers who will continue to face real hardships at work.</p>
<h2>Power matters</h2>
<p>The review resists imposing greater costs on employers. It refers to the fact that “the ‘employment wedge’ (the additional, largely non-wage, costs associated with taking someone on as an employee) is already high and we should avoid increasing it further”. The stress is on exhorting businesses to change – <a href="https://www.theguardian.com/business/2017/jul/09/uk-economy-take-long-painful-look-research-development">a policy stance</a> that has failed over many decades to deliver a better deal for workers at work.</p>
<p>There is also a scapegoating of the low paid for working cash-in-hand, but no condemnation of the bosses of big corporations for not paying tax. This unbalanced commentary suggests a review that favours businesses more than workers.</p>
<p>Theresa May declared that the review is consistent with her <a href="https://www.gov.uk/government/speeches/statement-from-the-new-prime-minister-theresa-may">commitment to</a> “make Britain a country that works not for a privileged few, but for everyone”. Yet, her government lacks the political will to tackle the injustices at work and beyond. The need to protect and promote workers’ rights goes against the grain of the market-based approach that May’s government avows.</p>
<p>“‘The British way’ works and we don’t need to overhaul the system”, proclaims the review. Yet, years of “the British way” have brought us a low wage economy wherein employers lack the incentives to invest in labour and workers lack the power to push for progressive reform. The system, in truth, is broken and needs overhauling if Britain is ever to achieve higher quality work for all.</p>
<p>The review, in policy terms, looks destined to change very little. Indeed, it can be seen to reinforce the view that vested interests still rule in UK workplaces, frustrating progress towards fairness and dignity at work.</p><img src="https://counter.theconversation.com/content/80836/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Spencer has received funding from ESRC, EPSRC, and FP7. </span></em></p>An independent review of modern working practices looks destined to change very little for people stuck working in the gig economy.David Spencer, Professor of Economics and Political Economy, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/746732017-03-16T11:05:40Z2017-03-16T11:05:40ZForget national insurance – Britain needs an economic policy U-turn<p>Just one week after announcing that it would raise national insurance for self-employed people, the UK government has U-turned on the policy. Despite being politically contentious, the reversal is more symbolic than substantive, at least from a fiscal perspective. </p>
<p>The proposed tax rise was only ever going to raise a very modest amount and was actually <a href="http://www.resolutionfoundation.org/media/blog/reforming-tax-for-the-self-employed-should-be-welcomed-by-progressives-and-fiscal-hawks-alike/">progressive in its effects</a>. It was an attempt to reduce the large tax gap between the self-employed and employees and was justified on fairness grounds. In this sense, the fact that it broke a manifesto promise was no bad thing.</p>
<p>The U-turn, however, is more significant for what it says about the general course of the government’s economic policy-making. It reflects a lack of serious thinking around issues of tax reform. It also exposes flaws in current policy towards supporting a stronger and more inclusive economy.</p>
<h2>Deeper problems at play</h2>
<p>The fact is that the government faces problems with the tax base. Its ability to fund spending out of taxation has become constrained. The chancellor, Philip Hammond, admitted to this fact in <a href="https://uploads.guim.co.uk/2017/03/15/Letter_from_the_Chancellor_to_colleagues.PDF">his letter announcing the U-turn</a>. He referred to “a structural issue in the tax base, on which we will have to act” and linked the issue directly to <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/mar2017">rising self-employment</a> in the UK.</p>
<p>Yet there are deeper problems that go beyond the increase in the number of self-employed workers. These problems relate to changes in the UK labour market. The rise of low-paid and insecure work has <a href="https://www.ifs.org.uk/uploads/publications/bns/BN_182.pdf">held back tax receipts</a>. It is not a matter of people en masse avoiding tax; rather it is matter of them not earning enough to contribute in a significant way to the total tax take.</p>
<p>The point is that <a href="https://theconversation.com/jobs-figures-mask-bogus-self-employment-in-the-shadow-economy-58017">structural changes in the labour market</a> – such as the rise in zero hours contracts, temporary and agency employment, and involuntary self-employment – over the last few decades have eroded the tax base. They have helped to create a fiscal gap in the UK budget that the chancellor now needs to fill.</p>
<p>The drive to make the labour market <a href="https://theconversation.com/a-look-behind-uks-impressive-unemployment-figures-shows-theyre-not-so-dazzling-33053">more “flexible”</a> has been actively encouraged by successive governments as a way to combat unemployment and inflation. It has meant worse wages, inferior career prospects, and dire working conditions for many workers. It now seems to be affecting the tax base, in a way that is concerning to the government. But, notably, it took fiscal pressure rather than concern over the lives of workers to prompt a (now-scrapped) change in policy.</p>
<h2>Wholesale review</h2>
<p>Commitments to fund social care and the NHS more generally will require more than piecemeal changes to the tax system; they will require a wholesale review of tax policy. Specifically, these commitments cannot be met without the move to a more progressive tax system. Taxes on profit and high incomes are key here and should take precedence over tinkering with national insurance for the self-employed.</p>
<p>If the government was truly serious about its commitment to tackle the tax base problem, it would be looking to reverse its policy to <a href="https://theconversation.com/uk-budget-2017-experts-respond-73998">cut corporation tax</a>. It would also look to raise taxes for higher earners. Those with the broadest shoulders should take more of the burden of taxation. Lower corporation tax and inaction to raise taxes on high incomes implies a tax system that is skewed in favour of big business and the rich.</p>
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<img alt="" src="https://images.theconversation.com/files/161132/original/image-20170316-10932-fls66l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/161132/original/image-20170316-10932-fls66l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/161132/original/image-20170316-10932-fls66l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/161132/original/image-20170316-10932-fls66l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/161132/original/image-20170316-10932-fls66l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/161132/original/image-20170316-10932-fls66l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/161132/original/image-20170316-10932-fls66l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Self-employment is not paying enough for most people to bring in sufficient tax receipts.</span>
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<p>The U-turn on the national insurance plan masks the fact that the government’s welfare reforms are predicted <a href="http://www.resolutionfoundation.org/media/blog/reforming-tax-for-the-self-employed-should-be-welcomed-by-progressives-and-fiscal-hawks-alike/">to hit the poorest in society the most</a>. Proposed benefit cuts will leave the poor worse off. Instead of worrying about a minor change in national insurance, politicians – and the media – should be worrying about the real hardships caused by these cuts.</p>
<h2>Investment needed</h2>
<p>The truth is that the UK economy remains in a very precarious position. Growth, to the extent that it is occurring at all, is being <a href="https://www.ft.com/content/e194e464-6b65-11e6-ae5b-a7cc5dd5a28c">driven by higher consumption</a>. With wages stagnating, the growth in consumption is being supported by higher borrowing and higher debt levels. This situation is not sustainable and the budget did nothing to address the structural problems of the UK economy.</p>
<p>The best way for the government to support the economy <a href="https://theconversation.com/philip-hammond-plays-the-pragmatist-but-lacks-the-vision-to-deliver-as-chancellor-66448">is to invest</a>. Funding infrastructure and creating a strong <a href="https://theconversation.com/is-the-uk-finally-getting-serious-about-industrial-strategy-71692">(not token) industrial strategy</a> should be priorities. Ultimately, higher tax receipts require a government committed to supporting, through its investment policies, better paid work.</p>
<p>If the chancellor was really committed to reviving the tax base and with it the fortunes of the UK economy, he would be seeking to reverse his government’s policy of austerity.</p>
<p>Sadly, the chancellor appears entrapped by reactionary forces in the media <a href="https://www.theguardian.com/commentisfree/2017/mar/15/budget-u-turn-may-tory-right-national-insurance?CMP=soc_3156">and on the Conservative backbenches</a>. He is unwilling to take even modest steps to resolve pressing problems of taxation and remains ideologically opposed to anything other than a cuts agenda. The country will be poorer materially and socially for his cravenness and dogmatism.</p><img src="https://counter.theconversation.com/content/74673/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Spencer has received funding from ESRC, EPSRC, and FP7. </span></em></p>The UK government’s U-turn on a national insurance increase for self-employed people exposes the flaws in its approach to building a stronger and more inclusive economy.David Spencer, Professor of Economics and Political Economy, University of LeedsLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/743872017-03-10T13:39:56Z2017-03-10T13:39:56ZWhat national insurance is – and where it goes<p>A tax called <a href="https://www.gov.uk/national-insurance">national insurance</a> has become the centre of a row within Britain’s ruling Conservative Party. The <a href="https://theconversation.com/uk-budget-2017-experts-respond-73998">recent budget</a> announced a rise in the tax for the self-employed (from 9% to 11% on profits above £8,060 – still less than the 12% paid by employees). But a number of Conservative MPs have strongly criticised the announcement, forcing the prime minister to delay any changes <a href="https://www.theguardian.com/politics/2017/mar/10/national-insurance-delay-appeases-conservative-rebels">until autumn</a>.</p>
<p>So what is the tax at the centre of this debate and how significant is the rise? National insurance is a tax on pay, paid by employees, their employers and the self-employed. But it’s not just a tax – by paying some types of national insurance, you build up an entitlement to claim certain state benefits, including the state retirement pension and various benefits payable on death to your spouse or partner, or to you when you are unable to work. </p>
<p>This principle of benefits that you contribute to was first introduced in the UK in 1911 and became enshrined in the <a href="http://www.bbc.co.uk/history/historic_figures/beveridge_william.shtml">Beveridge reforms</a> of the 1940s that still underpin today’s welfare state.</p>
<p>There are different types of national insurance contribution, called “classes”. They are paid by different people and carry different benefit entitlements. The main classes are summarised here:</p>
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<h2>What it pays for</h2>
<p>Part of national insurance contributions help to fund the National Health Service and the rest are paid into a ring-fenced fund used to pay benefits. In <a href="https://www.gov.uk/government/publications/report-to-parliament-on-the-2017-re-rating-and-up-rating-orders">2016-17</a>, Class 1 contributions paid by employees and employers brought £94.3 billion into the fund and Class 2 and 4 contributions paid by the self-employed brought in £2.2 billion. Class 3 voluntary contributions brought in less than £0.1 billion.</p>
<p>Through their Class 1 national insurance contributions, employees build up entitlements to claim state pension, bereavement benefits for their spouse or civil partner if they die, and benefits if they are unemployed or off work sick. In addition to these national insurance benefits, employees must by law be provided with “statutory payments”, such as sick pay and maternity pay. </p>
<p>These statutory payments are not paid out of national insurance, but directly by the employer – although small employers can claim back some or all of the cost from the state. Employers often choose to run their own sick pay and maternity schemes that are more generous than just the statutory payments.</p>
<p>Self-employed people, with their lower contributions, build up entitlements to state pension, bereavement benefits, maternity allowance and benefits if ill. However, their maternity and sickness benefits tend to be less than the equivalent sums that employees can get and, until April 2016, this was also the case with the state pension. The following table reflects how the self-employed have been paying lower national insurance than people who are employed on the same earnings.</p>
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<h2>The big one: pensions</h2>
<p>The state retirement pension is by far and away the largest benefit covered by the national insurance fund. In <a href="https://www.gov.uk/government/publications/report-to-parliament-on-the-2017-re-rating-and-up-rating-orders">2016-17</a>, the fund paid out £98 billion in benefits, of which £92 billion (94%) was for state pensions.</p>
<p>For people reaching their <a href="https://www.gov.uk/state-pension-age">state pension age</a> before April 6, 2016, their state pension is made up of two parts: a basic state pension which is <a href="http://www.legislation.gov.uk/uksi/2016/230/contents/made">£119.30 a week in 2016-17</a>; and an additional pension, which on average adds <a href="https://www.ons.gov.uk/economy/investmentspensionsandtrusts/compendium/pensiontrends/2014-11-28/chapter5statepensions2013edition">another £30 a week</a>. Employees could get the additional pension, but not the self-employed – and this is the key reason why the self-employed have been paying lower National Insurance contributions.</p>
<p>But, as of April 6, 2016, the government introduced a <a href="https://www.gov.uk/new-state-pension">new “flat-rate” pension</a>. Everyone reaching state pension age on or after April 6, 2016 qualifies for this. This essentially rolls up the average additional pension with the basic pension to produce a new combined pension for the self-employed, as well as employees. In 2016-17, the flat-rate pension is £155.65 a week. </p>
<p>So the <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/597485/NICs_fact_sheet_final_web.pdf">argument</a> put forward by the government in its latest spring budget is that, now the self-employed are building up this higher pension in the same way as employees, the justification for lower National Insurance contributions is largely gone.</p>
<p>Of course, there are many other differences between being an employee and being self-employed. As a self-employed person, you don’t get holiday pay, employer contributions to a private pension scheme or redundancy pay if work dries up. You also have to bear the costs of your own workplace, equipment, insurance, and so on. On the other hand, you have greater freedom over your time and control of your working environment, as well as more expenses you can claim against income tax. These are all valid areas of difference, but are outside the scope of the national insurance scheme.</p><img src="https://counter.theconversation.com/content/74387/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jonquil Lowe does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Changes to the national insurance tax for self-employed people was one of the most controversial parts of the 2017 spring budget.Jonquil Lowe, Senior Lecturer in Economics and Personal Finance, The Open UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/729152017-02-20T09:36:22Z2017-02-20T09:36:22ZJob insecurity cuts to the core of identity and social stability – and can push people towards extremism<figure><img src="https://images.theconversation.com/files/157111/original/image-20170216-12953-cyjq80.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hanging by a thread?</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>“Will I lose my job in the near future?” For most people this is an unpleasant scenario to ponder, and for many it is a real and pressing concern. Since the financial crisis, more than half of all jobs created in the European Union have been <a href="https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef1557en.pdf">through temporary contracts</a>.</p>
<p>This high level of job insecurity doesn’t just have an economic effect on people, making financial planning extremely difficult. <a href="http://onlinelibrary.wiley.com/doi/10.1002/job.2172/abstract">Our research</a> shows how the precarious nature of the job market has a huge impact on how people feel, too. In fact, job insecurity strikes at the core of who we perceive ourselves to be – our identity – and this can have much wider ramifications for society. </p>
<p>Psychologists rank job insecurity among <a href="https://www.apa.org/news/press/releases/phwa/workplace-survey.pdf">the most prominent work place stressors</a>. The worry of not knowing whether you will be laid off, whether you will be able to pay your bills, and whether you still have a future within an organisation, is, of course, very stressful, especially when it is out of your hands. Job insecurity implies a potentially adverse future, and one which you cannot control. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/157112/original/image-20170216-12964-r33smg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/157112/original/image-20170216-12964-r33smg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/157112/original/image-20170216-12964-r33smg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/157112/original/image-20170216-12964-r33smg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/157112/original/image-20170216-12964-r33smg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/157112/original/image-20170216-12964-r33smg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/157112/original/image-20170216-12964-r33smg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Job insecurity has health, as well as financial, effects.</span>
<span class="attribution"><span class="source">shutterstock.com</span></span>
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</figure>
<p>Indeed the list of negative consequences of job insecurity is depressingly long; the more people worry about losing their jobs the lower their mental <a href="https://www.researchgate.net/profile/Magnus_Sverke/publication/11233704_No_Security_A_Meta-Analysis_and_Review_of_Job_Insecurity_and_Its_Consequences/links/0912f50fec4455f617000000/No-Security-A-Meta-Analysis-and-Review-of-Job-Insecurity-and-Its-Consequences.pdf">well-being</a>, and the more physical health complaints they report. Effects can range from occasional sleeping problems to <a href="http://www.sciencedirect.com/science/article/pii/S0277953604003892">clinical depression</a>. </p>
<p>For organisations, the effects of job insecurity are also <a href="http://eprints.lancs.ac.uk/45119/1/10.pdf">pervasively negative</a>. Contrary to popular belief, the worry of losing one’s job does not act as a motivator. Instead, it typically leads to poorer performance at work. And within communities or countries, widespread job insecurity is associated with political unrest, with insecure jobs cited as a cause of <a href="http://www.sciencedirect.com/science/article/pii/S0261379402000471">political extremism</a>. Job insecurity, in short, seems to get the blame for many of individuals’, organisations’ and society’s ills.</p>
<h2>Sense of self</h2>
<p>So why exactly is job insecurity so bad? Jobs mean more to us than just providing a financial income alone. What we do for work is an important aspect of who we are. After all, most of us spend about a third of our lives working. When someone is introduced to a stranger, very often one of the first questions that pops up is “so, what do you do for a living?” Even in retirement homes, a popular pastime is to discuss previous work. Thus, our job is important to our sense of self, to who we feel we are.</p>
<p>So, it is not surprising that job insecurity threatens how we feel about ourselves – that is, our identity. In a study of British employees, we discovered that people who were afraid of losing their jobs often felt their identity as an employed person was diminished, even though they were still actually at work. Job insecurity – as common as it might be – was perceived as an alienating experience, excluding people from the status and community of “the employed”, and making them feel less normal. </p>
<p>In turn, this affected their well-being: people who felt a loss of identity as an employed person reported problems in concentrating and sleeping, and felt they were losing their confidence in themselves. Feeling excluded also affected people’s behaviour at work, performing the core parts of their jobs less effectively. </p>
<p>So while job insecurity threatens our immediate well-being – such as future income, relations with colleagues, the ability to finish an important project at work – it goes deeper than this and threatens important parts of who we are. And the way that it harms our perception of ourselves can have a pervasive effect on those who suffer from it, as they attempt to deal with their insecurity. This manifests itself in sometimes contradictory ways.</p>
<p>For example, people who feel threatened in their identity have been found to be more likely to turn against others (if that helps their own status), while at the same time identifying with others who experience a similar threat. Feeling “less normal” might make people more susceptible to messages that make them feel more included again – for example, the opportunity to become part of something greater, making their own, excluded group “great” again. For others, feeling more alienated makes them more empathetic – towards other, more excluded people, unemployed people, minorities. This explains how job insecurity pushes some people towards political extremes, both right and left.</p>
<p>This growing evidence of the harmful effects of job insecurity – on individual’s identity and hence well-being, as well as on company performance – shows it is time not only for organisations, but for politicians to wake up to the issue. Policies are needed to counter the growing trend towards temporary work and zero-hours contracts, with added protection required to ensure people do not feel excluded from society and pushed toward extremism.</p><img src="https://counter.theconversation.com/content/72915/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eva Selenko currently receives funding from the British Academy. </span></em></p><p class="fine-print"><em><span>Chris Stride currently receives funding from the ESRC and the Nuffield Trust. </span></em></p>Psychologists rank job insecurity as one of the most stressful things about work – new research uncovers why.Eva Selenko, Senior Lecturer in Work Psychology, Loughborough UniversityChris Stride, Senior Lecturer (Statistician), University of SheffieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/717552017-02-07T03:39:22Z2017-02-07T03:39:22ZWill Trump’s ‘color-blind’ pro-business policies help black entrepreneurs too?<p>A <a href="http://press.princeton.edu/titles/9211.html">growing body of research</a> has shown the power of entrepreneurship to help solve the economic problems of <a href="https://www.amazon.com/Immigrant-Entrepreneurs-Venturing-Abroad-Globalization/dp/1859736394">disadvantaged groups</a> such as women, immigrants and <a href="https://www.amazon.com/Ethnic-Enterprise-America-Business-Japanese/dp/0520024850">racial and ethnic minorities</a>. </p>
<p>This finding can be traced to a <a href="https://www.amazon.com/dp/B004A16GSU/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1">longstanding vision</a> of entrepreneurship established by black Americans as a <a href="https://www.uncpress.org/browse/book_detail?title_id=1487">means of supporting their community</a> and overcoming discrimination. The tradition enjoys enduring popularity as contemporary <a href="http://onlineathens.com/stories/072201/new_0722010070.shtml#.WJDfU7GZOV4">social surveys</a> commonly report that more African-Americans regard self-employment as a desirable occupation than other racially defined groups.</p>
<p>Yet despite their commitment to entrepreneurship, blacks continue to have lower rates of self-employment than whites and other groups. The self-employment rate for unincorporated white-owned businesses was 6.9 percent in 2015, almost double the 3.6 percent for black-owned ones, according to the <a href="https://www.bls.gov/spotlight/2016/self-employment-in-the-united-states/pdf/self-employment-in-the-united-states.pdf">Bureau of Labor Statistics</a>. Moreover, black-owned businesses <a href="https://mitpress.mit.edu/sites/default/files/titles/content/9780262514941_sch_0001.pdf">tend to be smaller</a>, have fewer employees, generate less income and are generally less successful than those owned by whites. </p>
<p>Now that Republicans – who have long resisted efforts to pursue race-based policies aimed at supporting historically disadvantaged communities – control Congress and the White House, will those figures become even more lopsided as Donald Trump limits or ends affirmative action style policies that spurred big gains in the past? Or could “color-blind” pro-business policies such as reducing taxes and regulation lift all boats, including those of African-Americans, in equal measure? </p>
<p>To answer these questions, it helps to understand the reason black entrepreneurs are underrepresented in the first place. In a <a href="https://scholars.opb.msu.edu/en/publications/a-critical-race-theory-approach-to-black-american-entrepreneurshi">recent paper</a>, one of us (Gold) examined common explanations for why this is the case. </p>
<h2>Critical disadvantages</h2>
<p>While some researchers and pundits have, controversially, blamed a <a href="https://www.uncpress.org/book/9780807859100/the-history-of-black-business-in-america:-capitalism-race-entrepreneurship/?title_id=1487">lack of work ethic</a> or aptitude for the dearth of African-American entrepreneurs, such race or ethnicity-based explanations of human abilities have long been discredited in social science. More commonly, a broad consensus of research shows that a variety of race-based forms of discrimination and disadvantage have played a critical role in limiting blacks’ ability and opportunity to start their own businesses. </p>
<p>Even a century and a half after Abraham Lincoln freed the slaves, blacks continue to suffer a <a href="http://www.pewsocialtrends.org/2011/07/26/wealth-gaps-rise-to-record-highs-between-whites-blacks-hispanics/">wide range of disadvantages</a>. For example, blacks are commonly assigned lower credit ratings than whites who earn much less. Their neighborhoods are underserved by banks. In addition, black entrepreneurs are often excluded by racial barriers from networks that business owners rely on to get to know each other and exchange referrals, information and investment opportunities. </p>
<p>As of 2009, the <a href="http://iasp.brandeis.edu/pdfs/Author/shapiro-thomas-m/racialwealthgapbrief.pdf">average white family’s wealth</a> was US$113,000. In contrast, the average black family’s wealth was about $5,700. </p>
<p>This has meant that <a href="https://mitpress.mit.edu/sites/default/files/titles/content/9780262514941_sch_0001.pdf">blacks generally lack the resources</a>, such as investment capital, education and previous work experience, needed to achieve entrepreneurial success. </p>
<p>Based on these findings, government policies that sought to encourage the growth of black entrepreneurship have commonly done so via affirmative action <a href="https://www.amazon.com/dp/B000VXD9PE/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1">to compensate</a> for this unique legacy. These included training and loan programs and requirements that government contracts reserve a fraction of work for minority-owned businesses. </p>
<h2>Affirmative action backlash</h2>
<p>However, affirmative action policies that allocate governmental benefits on the basis of race, ethnicity or gender have been controversial, to say the least. They have been attacked by conservative politicians with legislation, social movements and <a href="http://www.ncsl.org/research/education/affirmative-action-court-decisions.aspx">court decisions</a>. </p>
<p>Since the 1990s, the anti-affirmative action movement used state electoral initiatives to appeal directly to resentful white male voters – a group that became a key Trump constituency. The strategy led to the <a href="https://tcf.org/content/commentary/what-can-we-learn-from-states-that-ban-affirmative-action/">implementation of anti-affirmative action laws</a> in several of the country’s largest and most diverse states. From 1996 to 2010, California, Washington, Michigan, Nebraska and Arizona all passed such laws.</p>
<p>Among other factors, reductions in government and private sector support for minority entrepreneurship coincided with the decline in the number and <a href="https://www.bls.gov/opub/mlr/2010/09/art2full.pdf">profitability of black-owned businesses</a>.</p>
<p>Now that Trump occupies the White House and Republicans enjoy majorities in both the House and Senate, indications are that the new administration will withdraw support from affirmative action and other race-based policies that encourage black entrepreneurship. In 2015, candidate <a href="http://www.foxnews.com/transcript/2015/10/18/donald-trump-talks-taxes-trade-11-and-why-takes-personal-shots-at-political/">Trump asserted</a> that “I don’t think we need it (affirmative action) so much anymore.” </p>
<h2>Trump and black entrepreneurs</h2>
<p>So what does this mean for black self-employment?</p>
<p>For a start, it probably means African-Americans will no longer be able to access affirmative action policies to help them overcome their disadvantages in starting or running businesses. </p>
<p>On the other hand, however, black entrepreneurs may benefit from the Trump adminsitration’s promised creation of a social and economic climate conducive to business growth via pro-business policies such as lowering taxes and <a href="http://www.politico.com/story/2017/01/trump-signs-executive-order-requiring-that-for-every-one-new-regulation-two-must-be-revoked-234365">reducing regulations</a>. In addition, Trump aims to invest extensively in <a href="https://www.donaldjtrump.com/policies/an-americas-infrastructure-first-plan">infrastructure spending</a> and <a href="http://money.cnn.com/2017/01/27/news/trump-manufacturing-jobs-initiative/">revitalize American manufacturing</a>. </p>
<p>At least in theory, these pro-business policies could benefit black entrepreneurs – alongside everyone else. Infrastructure investments and boosting manufacturing may be significantly beneficial to African-American entrepreneurs, especially if such contracts are distributed in a manner that matches these entrepreneurs’ skills and abilities. Historically, African-Americans have been active in manufacturing, albeit as workers rather than business owners. However, given their familiarity with this industry, the growth of manufacturing might yield special benefits.</p>
<p>Of course, the potential benefits received by black entrepreneurs under Trump’s economic policies depend on how these activities are organized and funds allocated. For example, will small businesses get a generous share of the contracts compared with large companies, few of which are owned by African-Americans? (<a href="http://blackdemographics.com/economics/black-owned-businesses/">Virtually all</a> black-owned businesses are small in size.) </p>
<h2>A test of ‘color-blind’ policies</h2>
<p>All in all, this will be a test of whether the benefits of pro-business policies that don’t favor a particular group or race end up boosting black economic activity. Historically, as the data show, this has not been the case thanks to the legacy of discrimination, from slavery to Jim Crow to <a href="https://mitpress.mit.edu/sites/default/files/titles/content/9780262514941_sch_0001.pdf">modern-day prejudices</a> in the financial system. </p>
<p>If the pro-business environment is set up in a way that facilitates the growth of black entrepreneurship, the benefits of these policies should be evident in due time. Results could then support the virtuous circle that leads to increased earnings in black communities, which in turn spurs greater patronage of and investment in other black-owned businesses. </p>
<p>However, if entrepreneurial growth is negligible, then we may conclude that pro-business policies of the sort that were created by the Trump administration are insufficient to allow for the fulfillment of African-Americans’ longstanding desire to create a viable business community.</p><img src="https://counter.theconversation.com/content/71755/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steven J. Gold has received funding from the Aspen Foundation, Michigan State University, Wilstein Institute, American Sociological Association/National Science Foundation , Haynes Foundation, Ripon Educational Fund, Whizin Institute</span></em></p><p class="fine-print"><em><span>Jeffrey R. Oliver does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Despite an entrepreneurial heritage, black self-employment rates are about half that of whites. Could a rising economy lift their boats too?Steven J. Gold, Professor of Sociology, Michigan State UniversityJeffrey R. Oliver, Visiting Assistant Professor, Michigan State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/680102016-11-04T14:15:53Z2016-11-04T14:15:53ZIs Uber ruling the beginning of the end for bogus self-employment?<figure><img src="https://images.theconversation.com/files/144561/original/image-20161104-25343-bfn69h.jpg?ixlib=rb-1.1.0&rect=5%2C0%2C1895%2C1141&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-268598132/stock-vector-revolution-poster-workers-raising-fists-with-text-its-time-to-make-a-change-vector.html?src=rEKfa0Vtl0fZUwfqL0r2hg-1-17">Seita/Shutterstock</a></span></figcaption></figure><p>When the much anticipated <a href="https://www.judiciary.gov.uk/wp-content/uploads/2016/10/aslam-and-farrar-v-uber-reasons-20161028.pdf">Uber judgment</a> on the self-employed status of two drivers came in, the victory was described by their union, the GMB, as “<a href="http://www.gmb.org.uk/newsroom/GMB-wins-uber-case">monumental</a>”. Respected commentators including the lawyers, Leigh Day, and the Guardian newspaper described the judgement as “<a href="http://www.lexology.com/library/detail.aspx?g=3ddede8f-4497-4acb-b99a-37da5509229f">historic</a>” and “<a href="https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status">a landmark</a>”. </p>
<p>There is no doubt that the judgement delivered by the London Central Employment Tribunal on October 28 was an advance in the campaign to provide workers’ rights to the hundreds of thousands that are wrongly classified by their de facto employers as “independent contractors” or “self-employed”. But this is no triumph. It is only a small victory in one battle that is part of a much larger and more protracted war. There are five principal reasons for this.</p>
<p>First, Uber will appeal to the Employment Appeal Tribunal, and if unsuccessful there, go to the Court of Appeal and maybe all the way to the Supreme Court. As its business model and, thus, profits, are fundamentally based upon using what the Employment Tribunal regarded as a “bogus” form of self-employment, it will expend a huge amount of energy and resources to overturn the ruling.</p>
<h2>Campaign plans</h2>
<p>There is a second, more quintessential reason. The nature of the Employment Tribunal decisions means that if many more Uber drivers wish to be availed of workers’ rights – minimum wage, sick pay, holidays, pension enrolment and so on – then they will have to take Employment Tribunal cases as well. Therefore, it was wrong for various commentators such as <a href="http://www.lexology.com/library/detail.aspx?g=37149b7d-3fec-47e6-85c9-b165e82e8ee3">lawyers</a> and <a href="http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2016/10/28/tribunal-rules-in-favour-of-uber-drivers-in-landmark-case.aspx">personnel professionals</a> to imply that the rest of Uber’s 40,000 drivers in Britain will be now suddenly be entitled to workers’ rights. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/144557/original/image-20161104-25343-k34e1q.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Shoot for the moon. Finding justice.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/stevec77/107868154/in/photolist-awRrL-egseeD-gHSY7g-ahY38n-asiq1f-h13vDR-6N9E3e-fvHbD4-CRCDz-5ej6LS-a8obRR-ruvWPt-nGE6fY-87gsKr-ot7y2w-afTasu-eFqRqz-bVX5dF-df4vu5-byYC6j-df4Dik-afaBTj-fvH5Yk-4xBsjc-49HGS-gHSfgW-eFwZ3Q-afaCFj-4bFztC-ajjxMq-4dELvS-4dAJu4-etjK2-4dMprK-pij2jm-pS9WnQ-5QY9bH-61qvMQ-bFEffX-5yvatZ-cdZyKj-bAKFRm-hoo6q1-afaC1J-egy1by-4dENKy-5uXSRH-7LxCKN-4xFCqN-qhxgxG">Steve Calcott/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>Sure, the Tribunal’s finding does intimate that idea but it is no more than that. The ruling is not binding upon how Uber treats its other drivers – something Uber itself is <a href="http://www.standard.co.uk/news/uk/uber-tells-drivers-tribunal-ruling-on-workers-rights-doesnt-apply-to-them-a3382686.html">clearly aware of</a>. The other drivers were not joint plaintiffs in the case. The only way the GMB union can make Uber cave in on all of its drivers is not only to take many, many more ultimately successful cases (<a href="https://www.theguardian.com/technology/2016/nov/04/uber-facing-hundreds-more-claims-from-drivers-for-back-pay">as it seem intent upon doing</a>), but also to use various non-legal avenues to pressurise Uber into changing its ways.</p>
<p>Organising consumer boycotts, investor strikes, industrial action <a href="https://www.theguardian.com/business/2016/aug/15/deliveroo-workers-strike-again-over-new-pay-structure">of the Deliveroo sort</a> are all viable options. This would be most effective if deployed, along with the legal means, against Uber in a form of pincer movement.</p>
<p>Another important tool available to the GMB at the moment is to use the statements of the prime minister, Theresa May, concerning <a href="https://www.ft.com/content/ffb25e84-8af2-11e6-8aa5-f79f5696c731">an economy that “works for all”</a>. If it can get other Employment Tribunals to see which way the political wind is now blowing, this will increase its chances of success. </p>
<h2>One case at a time</h2>
<p>A third reason to avoid jubilation is that even a final victory after appeal in the Uber case would not automatically mean success for the host of other self-employed workers <a href="https://www.theguardian.com/technology/2016/jul/19/uber-drivers-court-tribunal-self-employed-uk-employment-law">bringing similar claims</a> against the likes of Addison Lee, Excel, City Sprint and eCourier and backed by their GMB and IWGB unions – or any others that might come in the future elsewhere. This is because each is treated in law as an individual case. Even where there are class actions of multiple plaintiffs in a coordinated series of cases, the judgements only apply in law to them. </p>
<p>So the <a href="https://www.theguardian.com/money/2016/jul/30/job-pay-workers-gig-economy">plaintiffs’ cases</a> against Addison Lee, Excel, City Sprint and eCourier will have to pass the same stringent tests that were applied in the Uber case and show that in different settings that their work – and the organisation of it – was effectively controlled in a conventional managerial method. Moreover, cases take time. The process of gaining the Uber ruling started in the summer of 2015.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/144559/original/image-20161104-25339-1nr5eo1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Next cab off the rank?</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/everydaylifemodern/456816708/in/photolist-JZEEF-GnocP-GniG9-96jMS-jaECL-33gPS-i85qW-i8586-uhAVX-4Dnusw">observista/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Fourth, even if those other cases are successful, Employment Tribunal rulings are no substitute for a legislative solution. Ultimately, case law precedents can be undermined, overturned and superseded by other case law precedents. Legislation – along with robust enforcement – is the only way to outlaw the bogus use of self-employment. Anything else means that the war to do so means fighting on a piecemeal, incomplete basis. </p>
<p>Fifth, and crucially, employers will undoubtedly find new ways to introduce and embed self-employment. We have seen it already in the construction industry. New rules in 2014 sought to stop employment agencies falsely providing workers on a self-employed basis, but all that happened was that workers were shifted over to so-called “umbrella” companies where workers can be employed legally on a temporary basis and many on zero hours contracts. The practice is <a href="https://www.theguardian.com/money/2016/oct/21/temporary-workers-umbrella-companies-extra-costs-dodging-ni-cutting-rights-supply-teachers">now spreading elsewhere</a>. As employers have both the means and the motivation, they will develop new methods to get around any legal challenges. Again, this flags up the need for legislation to provide a blanket ban on bogus self-employment.</p>
<p>The two Uber plaintiffs, James Farrar and Yaseen Aslam, along with their union, the GMB, are to be congratulated on pushing open the door to the legal possibility that self-employed workers might gain worker rights. But it will take much more than this to turn the possibility into a probability, let alone an actuality. Political and legislative change is needed to make sure that their victory is neither Pyrrhic nor temporary. Unless that happens, the Uber ruling will not even be the end of the beginning for bogus self-employment.</p><img src="https://counter.theconversation.com/content/68010/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gregor Gall is the editor of Scottish Left Review and the director of the Jimmy Reid Foundation.</span></em></p>Ride-sharing app Uber is facing a new wave of legal claims after a landmark ruling on work conditions. But any triumphalism is deeply premature.Gregor Gall, Professor of Industrial Relations, University of BradfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/678652016-10-31T14:07:06Z2016-10-31T14:07:06ZFlexible work: how the gig economy benefits some more than others<figure><img src="https://images.theconversation.com/files/143902/original/image-20161031-15816-1u31kav.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Gig life.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/mikeschmid/1315041266">Mike Schmid</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Self-employment is on the rise in the UK. The <a href="http://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/october2016">latest government statistics</a> put it at 4.79m, which represents 15% of all people in work. And, in recognition of this changing nature of employment, the prime minister has <a href="https://www.theguardian.com/money/2016/oct/01/theresa-may-hires-former-tony-blair-policy-boss-to-review-workers-rights">commissioned a review of workers’ rights</a>. One of its chief tasks is to address concerns that millions are stuck in insecure and stressful work. </p>
<p>Flexible working and self-employment are inevitable solutions to the growing “gig economy”, in order to best manage projects and fluctuating work flows. A flexible lifestyle may be desirable for the highly paid IT consultant. But for the call centre worker on a zero-hours contract, it means a pension, mortgage and income protection are all illusory.</p>
<p>In Tim Ferriss’ book <a href="http://fourhourworkweek.com/">The 4-Hour Work Week</a>, creative freelancers live the dream. They work anywhere, anytime, provided they deliver agreed outputs. And, as social scientist Richard Florida suggests in his view of the “<a href="http://www.creativeclass.com/richard_florida/books/the_rise_of_the_creative_class">Creative Class</a>”, high-tech workers, artists and musicians typically gravitate to dynamic and open urban regions, with good schools, sporting and shopping facilities. These high-earning creative types then generate jobs for contingent workers whose rights must be protected from abuse. The challenge for urban planners is to attract such talent at both ends of the flexible working spectrum. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/143892/original/image-20161031-15788-4209rk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/143892/original/image-20161031-15788-4209rk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/143892/original/image-20161031-15788-4209rk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/143892/original/image-20161031-15788-4209rk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/143892/original/image-20161031-15788-4209rk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/143892/original/image-20161031-15788-4209rk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/143892/original/image-20161031-15788-4209rk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Creative class chill.</span>
<span class="attribution"><span class="source">shutterstock.com</span></span>
</figcaption>
</figure>
<p>Flexibility in self-employment, however, presents a quite different scenario for those with zero-hours contracts. These are <a href="https://www.gov.uk/government/publications/zero-hours-contracts-guidance-for-employers/zero-hours-contracts-guidance-for-employers">increasingly common employment contracts</a> where employers do not guarantee the individual any work and the individual is not obliged to accept any work offered. They are a hot topic for debate, with significant polarisation of views. </p>
<p>The <a href="https://www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/news-parliament-2015/working-practices-at-sports-direct-report-published-16-17/">recent investigation</a> into Sports Direct’s use of zero-hours contracts showed them in a particularly negative light and there is talk of the company moving to fixed hours. New Zealand <a href="https://www.theguardian.com/world/2016/mar/11/zero-hour-contracts-banned-in-new-zealand">banned these types of contracts</a> in April. And an employment tribunal in London <a href="http://www.bbc.co.uk/news/business-37802386">recently ruled</a> that Uber drivers should be classed as workers, rather than self-employed. Yet for some – students, for example – a zero-hours contract is better than no contract at all. </p>
<p>Despite the latest outrages over zero-hours contracts, theories of workplace flexibility have been around for many years. The academic John Atkinson put forward a <a href="http://m.elearnuk.co.uk/uploads/courses/566.pdf">well-known model</a> for the “flexible firm” in 1984. It advocated that companies retain a core group of workers and use a flexible workforce that is determined by and responsive to business demand. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/143692/original/image-20161028-15793-16o41dm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/143692/original/image-20161028-15793-16o41dm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/143692/original/image-20161028-15793-16o41dm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/143692/original/image-20161028-15793-16o41dm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/143692/original/image-20161028-15793-16o41dm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/143692/original/image-20161028-15793-16o41dm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/143692/original/image-20161028-15793-16o41dm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://m.elearnuk.co.uk/uploads/courses/566.pdf">Julie Davies</a></span>
</figcaption>
</figure>
<p>The model also distinguishes between functional and numerical flexibility. This has long been the operating model in the entertainment industry where the supply of staff is driven by business demand. It is a continuing theme in discussions about employment trends in the fourth industrial revolution.</p>
<h2>A business staple</h2>
<p>The high-profile coverage of zero-hours contracts might give the impression that they are one of the dominant forms of employment contract in the UK. But, <a href="https://www.ons.gov.uk/surveys/informationforhouseholdsandindividuals/householdandindividualsurveys/labourforcesurveylfs">government statistics</a> show that 903,000 people were employed on them during April to June 2016 – this is just 2.9% of all people in employment. They are most likely to be young, part-time, women, or in full-time education. Typically they work 25-hours per week and a third say they would prefer more hours in their current jobs. </p>
<p>Zero-hours contracts, however, are actually less prevalent than other forms of flexible and non-standard employment such as shift work, annualised hours and temporary contracts. And they are only slightly more common than agency work.</p>
<p>In effect, they can be seen as equivalent to the long-established position of a casual contract, something which has been the staple of the business model in the leisure, entertainment and culture industry <a href="http://www.ilo.org/wcmsp5/groups/public/@ed_dialogue/@sector/documents/publication/wcms_240701.pdf">for years</a>. When work is seasonal, margins are narrow and covering the minimum wage is a challenge for employers, many of whom simply cannot afford surplus staff.</p>
<h2>Juggling act</h2>
<p>One sector that experiences significant fluctuation in demand is the entertainment business. Blackpool, a seaside resort on the north-west English coast, whose <a href="http://www.visitblackpool.com/blackpool-has-it-all/">main industry is tourism</a>, is a good example of how difficult it is to get this right. There is a seasonal and school holiday cycle, which introduces one level of fluctuation. Then there are other unpredictable factors that affects the need for staff.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/143887/original/image-20161031-15814-1ushuze.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/143887/original/image-20161031-15814-1ushuze.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=339&fit=crop&dpr=1 600w, https://images.theconversation.com/files/143887/original/image-20161031-15814-1ushuze.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=339&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/143887/original/image-20161031-15814-1ushuze.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=339&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/143887/original/image-20161031-15814-1ushuze.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=426&fit=crop&dpr=1 754w, https://images.theconversation.com/files/143887/original/image-20161031-15814-1ushuze.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=426&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/143887/original/image-20161031-15814-1ushuze.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=426&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Unpredictable weather in Blackpool.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-481530364/stock-photo-blackpool-united-kingdom-august-06-2016-blackpools-famous-golden-mile-beach-people-sunbathing-in-the-beach-blackpool-tower-in-the-background-hdr.html?src=ReVb_KNI6G1_iD6CGQOfsA-1-14">jremes84 / Shutterstock.com</a></span>
</figcaption>
</figure>
<p>The famously variable British weather affects the relative popularity of indoor and outdoor attractions. And the city is host to a number of events, ranging from major darts competitions, musical acts and theatre productions, to small weddings and functions. The skills required varies significantly too. Whether it’s the annual British Homing Pigeon World Show (January), the world ballroom dancing championships (May), or the annual Rebellion punk reunion festival (August). Flexibility is a daily challenge for many businesses in similar situations.</p>
<p>So, in a world of increasing flexibility and insecurity, we will watch with interest to see the outcome of the government’s review of modern employment. Matthew Taylor who is running it has a <a href="https://www.thersa.org/about-us/media/2016/matthew-taylor-to-lead-independent-review-of-employment-practices-in-the-modern-economy">wide remit</a> that includes security, pay and rights; progression and training; finding the appropriate balance of rights and responsibilities for new models; representation; opportunities for under-represented groups; new business models. Taylor <a href="https://medium.com/@thersa/work-in-progress-86177cea2746#.agdlzo9vp">has said</a> that “most part-time workers, and even most zero-hours workers, say they have chosen to work this way”. Let’s see whether the evidence really bears this out.</p><img src="https://counter.theconversation.com/content/67865/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Horan was previously a strategic human resources director for Blackpool Council.</span></em></p><p class="fine-print"><em><span>Julie Davies does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Life is a lot different for the flexible working creative class and the call centre worker on a zero-hours contract.Julie Davies, HR Subject Group Leader, University of HuddersfieldMark Horan, Senior Lecturer Human Resource Management, University of HuddersfieldLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/674112016-10-21T12:05:10Z2016-10-21T12:05:10ZHermes inquiry shows how unions are finding new forms of leverage<figure><img src="https://images.theconversation.com/files/142649/original/image-20161021-1751-1qc4283.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>Multinational delivery company Hermes has been <a href="https://www.theguardian.com/uk-news/2016/oct/20/delivery-giant-hermes-faces-hmrc-inquiry-into-low-pay-allegations">referred to HM Revenue and Customs</a> following complaints by its couriers that they are being paid less than the minimum wage. The company, which delivers goods for major retailers including John Lewis and Next, has faced criticism since <a href="https://www.theguardian.com/society/2016/jul/18/hermes-couriers-paying-staff-less-than-living-wage">The Guardian revealed</a> that the pay of some of its self-employed couriers back in July 2016 amounted to less than the hourly national minimum wage.</p>
<p>The self-employed status of these couriers removes the company’s legal responsibility to ensure they are paid the legal minimum of £7.20 an hour. Now, compliance officers will investigate whether couriers’ classification as self-employed is genuine and fair. </p>
<p>The referral marks a stride forward in the equitable treatment of workers without traditional forms of collective workplace representation, allowing their voices to be heard and potentially changing the way they are treated. Alongside similar cases recently of retailers <a href="https://www.theguardian.com/business/2016/sep/20/sports-direct-bows-to-pressure-and-agrees-to-independent-review">Sports Direct</a> and <a href="https://www.buzzfeed.com/saraspary/asos-has-told-staff-it-is-changing-contracts-following-worke?utm_term=.eyv5M775v#.wxewLPPw7">ASOS</a> making such concessions to workers’ rights, it appears to be part of a growing trend.</p>
<p>These cases are markers of how intense external pressure can change the way that these firms treat their staff (whether employed directly or indirectly via agencies). With strikes <a href="https://www.theguardian.com/uk-news/2016/aug/02/number-of-striking-workers-now-lower-than-ever">at an all-time low</a> and the membership of unions much depleted, these advances in defending workers’ terms and conditions of employment show how alliances between unions and other NGOs are beginning to bear significant fruit.</p>
<h2>Hot potatoes</h2>
<p>On various issues, including employers undercutting the minimum wage, <a href="https://www.theguardian.com/business/2016/may/02/tips-should-go-to-workers-not-employers-government-report-restaurants">taxing customer tips for waiters in restaurants</a>, <a href="http://www.bbc.co.uk/news/business-36242312">blacklisting construction workers for their political views or union membership</a>, the <a href="https://www.ft.com/content/e6231ad6-45a6-11e5-af2f-4d6e0e5eda22">bogus use of self-employment</a> and imposition of <a href="https://theconversation.com/zero-hour-contracts-the-dark-side-of-flexible-labour-markets-16500">zero-hours contracts</a>, unions in Britain have developed a model of working with other concerned parties to pack a bigger than normal punch. In this, they have started to emulate their American counterparts in their campaigns for higher minimum wages such as the “<a href="https://theconversation.com/mcdonalds-and-the-global-revolution-of-fast-food-workers-64574">fight for $15</a>” campaign in the fast food sector. </p>
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<img alt="" src="https://images.theconversation.com/files/142655/original/image-20161021-1748-14y88ku.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/142655/original/image-20161021-1748-14y88ku.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/142655/original/image-20161021-1748-14y88ku.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/142655/original/image-20161021-1748-14y88ku.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/142655/original/image-20161021-1748-14y88ku.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/142655/original/image-20161021-1748-14y88ku.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/142655/original/image-20161021-1748-14y88ku.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Fight for $15 movement in the US brings together unions, workers and politicians like Bernie Sanders.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/ontariofedlabour/16537937864">OFL Communications Department</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
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<p>Consequently, what unions now do is create a political hot potato by gaining the support of progressive news outlets such as The Guardian as well as appealing to parliamentary committees, in order to exercise political leverage over companies and the government. They begin by getting members and supporters in the concerned companies to write to MPs and offer access to journalists whereby workers <a href="http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/business-innovation-and-skills-committee/working-practices-at-sports-direct/written/34181.html">can share their stories</a>. </p>
<p>News outlets turn these bad news stories into their own investigations which they then widely publicise. In the meantime, this supports the willingness of a small handful of key MPs to write to government ministers urging corrective action. Those who are chairs of important parliamentary committees can call employers to account by compelling them to give testimony. </p>
<h2>Creating a tipping point</h2>
<p>In the case of Hermes, 78 couriers wrote complaints to Frank Field MP, the chairman of the House of Commons work and pensions select committee. Field then sent a report to HMRC, which has led to its investigation into Hermes – something the company has said it will cooperate fully with while insisting it has done nothing wrong.</p>
<p>Actions by MPs provide news outlets with further stories. These, in turn, fuel outrage on the part of the general public which is widely shared – alongside links to the stories – via social media. This unfavourable attention is keenly felt by senior management and shareholders – the latter concerned about the value of their investments. Often marshalled together by <a href="https://www.theguardian.com/business/2014/aug/01/new-breed-shareholder-activists">shareholder activist groups</a>, shareholders start questioning why this is happening and proffering solutions to resolve the situation. </p>
<p>A tipping point is reached when the government is forced to make statements that it will investigate certain employer practices and uphold the law where it believes it has not been adhered to. The whole process shows how external pressure on companies can cause internal changes in the way they treat staff.</p>
<p>This unfolding story of how unions can kickstart the process of creating political heat on employers shows that they have learned there is more than one way to skin the proverbial tiger. This does not mean that political campaigning has made traditional forms of industrial action redundant – rather, it shows that unions have realised that they must adapt to new situations and use other, more innovative means. Of course, there is some sense of déjà vu, whereby the long tradition of political campaigning that unions <a href="https://he.palgrave.com/page/detail/a-history-of-the-british-labour-party-andrew-thorpe/?sf1=barcode&st1=9781137409829">have always engaged in</a> is simply being updated for the digital, social media age. </p>
<p>For the unions, these handful of victories provide the space and opportunity to create more general modus operandi to ensure that workers are not unfairly exploited by businesses and that they have fair working practices at their core. More widely, linking employees with external NGO and political support will be the key challenge to build a stronger force for change.</p><img src="https://counter.theconversation.com/content/67411/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gregor Gall is affiliated with editor of the Scottish Left Review and director of the Jimmy Reid Foundation.</span></em></p>External pressure has led to delivery giant, Hermes, being referred to the chief tax man over whether or not its workers should be classified as ‘self-employed’.Gregor Gall, Professor of Industrial Relations, University of BradfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/658632016-09-22T14:04:08Z2016-09-22T14:04:08ZAre women less likely to become entrepreneurs?<figure><img src="https://images.theconversation.com/files/138807/original/image-20160922-22514-1u9wqq9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>A great deal of attention is paid to the glass ceiling that prevents women from climbing the corporate ladder. The under-representation of women at the executive level in large corporations is thought to be one of the main obstacles <a href="http://www.cityam.com/227553/government-backed-davies-review-targets-women-holding-one-third-of-board-seats-by-2020">to female economic empowerment</a>. But there is an additional obstacle that is less widely publicised – and just as debilitating. This is the glass ceiling that women face when they want to become self-employed and start their own business.</p>
<p>This is the finding of new research, recently published by my colleague Tanya Wilson and I <a href="http://www.sciencedirect.com/science/article/pii/S0014292115001622">in the European Economic Review</a>. We found that, at a time where self-employment and small business activity is an increasingly important feature of most advanced economies, women are held back when it comes to starting and growing their own businesses by significant financial constraints that are stronger for them than for men.</p>
<p>Not only is this bad for gender equality, it is also bad for the wider economy. Self-employment and small business activity have become increasingly important features of most advanced economies. In the UK, for example, small firms now account for 48% of all private sector employment, and increases in total employment since the start of the Great Recession have been mostly <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/trendsinselfemploymentintheuk/2001to2015">driven by the growth in self-employment</a>.</p>
<h2>Recent rise in women entrepreneurs</h2>
<p>Meanwhile a sharp rise appears to be taking place in women engaged in entrepreneurial activity. Official <a href="https://www.ons.gov.uk/surveys/informationforhouseholdsandindividuals/householdandindividualsurveys/labourforcesurveylfs">UK labour force surveys</a> show that from 2009 to 2014, the proportion of men in self-employment increased by 6%. Over the same period, the proportion of self-employed women jumped by a remarkable 22%. </p>
<p>But women still face severe obstacles as entrepreneurs, just as they do when trying to advance within large corporations. One of the main problems women face is access to the funds necessary to start a business or expand an existing one. A glass ceiling emerges for women in self-employment when they suffer relatively more from these liquidity constraints than their male counterparts do.</p>
<p>Our study used data from the <a href="http://webarchive.nationalarchives.gov.uk/20160105160709/http://www.ons.gov.uk/ons/media-centre/statements/the-wealth-and-assets-survey/index.html">official survey of UK wealth and assets</a> to try and detect the existence of liquidity constraints for entrepreneurs. It showed a strong relationship between personal wealth and entrepreneurial activity. The greater one’s personal wealth is, the more likely they are to start a business. </p>
<p>The data also revealed evidence that this relationship between personal wealth and the propensity to start a new business is strongest among single women. Just £1,000 more money in the bank would lead to an 8.5% increase in the probability a single woman starts a new business. </p>
<h2>Collateral damage</h2>
<p>But women face a much harder job of securing access to the capital needed to start or grow their business – and single women especially. There are several possible explanations for this. It could be that single women have less collateral necessary for securing a loan such as a property. There may be gender discrimination in the granting of credit. It is also possible that single women are highly risk averse and choose not to borrow money even when borrowed funds would be forthcoming.</p>
<p>While discrimination and different tastes for risk are generally hard to conclusively demonstrate, the data do reveal that women are less likely than men to acquire formal loans when starting a business. Plus, the lower propensity to acquire a formal loan among single women seems to be the consequence of a lack of collateral.</p>
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<img alt="" src="https://images.theconversation.com/files/138810/original/image-20160922-22540-1y3pbxp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/138810/original/image-20160922-22540-1y3pbxp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/138810/original/image-20160922-22540-1y3pbxp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/138810/original/image-20160922-22540-1y3pbxp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/138810/original/image-20160922-22540-1y3pbxp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/138810/original/image-20160922-22540-1y3pbxp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/138810/original/image-20160922-22540-1y3pbxp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Stuck under the glass ceiling.</span>
<span class="attribution"><span class="source">shutterstock.com</span></span>
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<p>If this is the main obstacle preventing single women from engaging in entrepreneurship, and no market mechanisms emerge to help correct the situation, then a new public initiative that provides sufficient collateral to single women who lack access to funds might be one of those occasions where taxpayer money is well-spent.</p>
<p>Although public programmes that encourage business start-ups do already exist in the UK, they are generally quite restrictive and do not cover a large proportion of single women. An example is the <a href="https://www.gov.uk/new-enterprise-allowance">New Enterprise Allowance</a>, launched in 2011, which provides a weekly allowance for the first six months in self-employment and allows one to apply for a government-funded loan to help with start-up costs.</p>
<p>In 2013, a parallel initiative was introduced, called <a href="https://www.gov.uk/government/news/start-up-loans-changes-benefit-ex-service-personnel">X-Forces</a>. This programme extends eligibility for start-up funds to former military personnel and their families. However, the proportion of single women covered by this programme is also likely to be small.</p>
<p>Therefore, it would be of great social value if new private initiatives emerged that helped crack the glass ceiling in self-employment. However, if the private sector fails to correct the situation, then new public programmes could potentially help to further accelerate the recent rise of female entrepreneurship.</p><img src="https://counter.theconversation.com/content/65863/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Robert M. Sauer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New research shows how women are held back when it comes to starting and growing their own businesses.Robert M. Sauer, Professor of Economics, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.