Self-employment all-time high is proof of structural change, says PCG Link2Portal PCG, the membership organisation for independent professionals, has responded to the ONS labour statistics released today which show a sharp rise in those choosing...
Excerpt: "Ten years ago, Brazil set out to do something that few countries have ever overtly attempted: become more equal. The undertaking was unusual, but even more remarkable was the outcome: measurable success. Brazil has in the past decade moved people out of poverty on an unprecedented scale – the standard of living improved so much for 22 million that they are no longer considered “poor.” Millions more living on the knife-edge of starvation in drought-ridden expanses of the interior are still poor but vastly better off. Between 2003 and 2009, incomes of the poorest Brazilians grew seven times those of rich citizens.
And how did Brazil help? It gave its poorest citizens money.
It’s an idea that was once anathema to development experts and economists, and which is still deeply unpopular in many quarters – witness the hostility to “welfare moms” in the developed world. But the effectiveness of giving money to poor people to make them less poor is supported by mounting evidence as a smart way to address poverty. Sixty-three countries have sent experts here to learn about the Bolsa Familia – the family grant.
Brazil’s is not the biggest anti-poverty program in the world – it is dwarfed by several in South Asia, such as India’s $70-billion guaranteed-income-for-work scheme, for example.
And it is not the only one to use cash transfers, which are done on a moderate scale in India, on a larger one in South Africa, and which exist in some form in dozens of developing countries today, run either by the state or by private aid organizations.
What makes Brazil’s program stand out is the rock-solid evidence of the many ways this program has served to remake, dramatically, the lives of millions of people over the past decade.
The price tag, however, is astonishingly modest: just 0.46 per cent of GDP, for a total of $11.5-billion this year. (This means that, despite the slowdown in Brazil’s economy, the program isn’t threatened.) Overhead is kept to a minimum – there is no food to move around, as there was in previous nutrition programs that were meant to deliver needy families ration packs, and which were vulnerable to immense amounts of corruption.
And once the national registry was in place, there wasn’t much infrastructure to worry about. The grant isn’t a lot of money, but it is a guaranteed amount, so it allows people to make plans, and sometimes to save – two luxuries the poor never had relying on uncertain work and surviving day-by-day. It taught a new level of financial literacy, Ms. Campello says, to people who had never before had any prospect of regular income to budget with.
She calls it an investment. “These millions of people who get the Bolsa Familia are people who are spending here in Brazil. This money multiplies the GDP. We want them as consumers, as part of the country. And as workers. Brazil needs these workers. So we are not doing this just for social assistance. We are doing this because we believe it’s good for the country.”
IT'S been one of the hottest economic questions for at least the last few decades: what sort of jobs will provide a comfortable, secure, middle-class lifestyle for the next generation of Americans? America still has a vibrant manufacturing industry, but it no longer offers large numbers of desirable jobs.
During a panel at last week's Buttonwood conference Harvard economist Larry Katz had an answer. He reckons that future “good” middle-class jobs will come from the re-emergence of artisans, or highly skilled people in each field. Two examples he mentioned: a contractor who installs beautiful kitchens and a thoughtful, engaging caregiver to the elderly. He reckons the critical thinking skills derived from a liberal arts education give people who do these jobs an edge. The labour market will reward this; the contractor who studied art history or the delightful caregiver with a background in theatre will thrive.
This is consistent with a shift in the labour market I've observed. It seems the market now rewards individual more than firm-specific capital. That's economic jargon for the idea that it's better to be really good at your job than merely good at being an employee. There's less value in being the company man; you must be your own man possessing a dynamic skill set applicable in a variety of ways. That often means honing one's skills by changing jobs a few times, rather than staying with one employer for an entire career. Before the crisis, average job tenure had decreased, while the probably of losing a job declined. That suggests more voluntary job changes.
A couple of weeks ago I started to prepare what I thought would be a quick blog on the differences between HMRC and ONS data on the number of self employed people.
Erika Watson's insight:
I did similar stats comparison for recent presentations via the Fabian Society. Conclusion is that while government has cheerleaded the increase in self-employment, real support and training for most small businesses has been slashed... and alongside that chances of business survival. The cost to new businesses, innovation and the tax take for us all is massive: and it's going to get worse as Universal Credit for the Self-employed destroys the safety net for low earning self-employed people as well. (see www.prowess.org.uk/universal-credit-self-employed).
Also of course, a significant factor is that for the first time ever most of the new self-employed are women.
In 2013, the freelance economy continued to dominate the discussion about the way we work. One in three Americans (roughly 42 million) are estimated to be freelancers. By 2020, freelancers are expected to make up 50% of the full time workforce. Independent work is becoming more common across all generations and the vast majority plan to remain independent in the coming year.
The freelance economy is exploding at exactly the same moment that companies are undergoing a major shift in how they hire. Talent is moving from a fixed cost (and one that’s historically been one of the largest across a business) to a variable cost, with companies staffing up and down as needed. Businesses have the ability to quickly on-board hundreds or thousands of freelance workers– provided they have the tools and systems in place to manage them. The booming online staffing industry is also accelerating the growth of the freelance economy. This $1 billion industry provides a valuable alternative to companies that are leveraging a contingent workforce. In fact, the Staffing Industry Association saw the online staffing market grow 60% last year, and we see no signs of that growth slowing down in 2014 and beyond.
Switzerland's Proposal to Pay People for Being Alive New York Times The proposal is, in part, the brainchild of a German-born artist named Enno Schmidt, a leader in the basic-income movement. He knows it sounds a bit crazy.
Meet The New Serfs, Same As The Old Serfs TechCrunch Meanwhile, in the UK, “The median hourly earnings for the self-employed are £5.58, less than half the £11.21 earned by employees.” The Harvard Business Review points ...
One of the more interesting data points from the MBO Partners State of Independence surveys is how independent workers (freelancers, temps, self-employed, etc.) look at job security.
In our 2012 survey, 39% of the respondents said independent work is moresecure than traditional employment. This is up from 33% who said independent work is more secure in 2011.
While we've only been asking this specific question for 2 years, we've asked similar questions in the past. Before the Great Recession, about 15% of independent workers considered independent work more secure.
Based on our interviews and focus groups, there are several reasons why a growing group of independent workers think independence is more secure.
The primary reason is they're not under the control of a single employer or boss. Because they have a multiple clients and/or revenue streams, they feel they are much less likely to lose all of their income like they would if they lost a job. In other words, independence allows them to spread employment risk across multiple employers.
They also feel more secure because they are in control of their destiny instead of being at the mercy of arbitrary or incompetent bosses and corporate decision making.
Finally, traditional jobs are broadly perceived as being much less secure than in the past. This makes independent work look more secure.
Males choose self-employment by choice, women out of financial necessity ANINEWS Self-employment can allow older workers to stay in the labor market longer and earn additional income, yet little research has addressed if reasons for self-employment...
Peer economy providers are also vulnerable but with a crucial factor that makes all the difference: They are a visible workforce, able to make these collective interests heard.
The economy of the future will not be the economy as it is now. The challenge before us is to reimagine what full work means, not based simply on how we’re used to conceiving of it, but based on a consideration of what we deem most valuable (independence, security, connectedness, etc.). "
Lays out the challenge but I'm not sure there is much sign that peer economy providers are either visible or beginning to make collective interests heard.
The peer economy provides independence, and the contemporary increased security of diversity of income, connectedness. But that security still remains too fragile and shallow for most.
Nobel laureate Christopher Pissarides of the London School of Economics says Denmark's system of "flexicurity is a way to achieve both international competitiveness and a good social state. It offers a clear road map to labor reform.
Slate Magazine (blog) Switzerland Mulls Giving Every Citizen $2800 a Month Slate Magazine (blog) Earlier this month, an initiative aimed at giving every Swiss adult a "basic income" that would "ensure a dignified existence and participation in the...
It's not exactly news that in the absence of a solution to the unemployment crisis, Americans have learned to cobble together various odd jobs to replace the full-time, benefits-included positions they once had.
What's surprising is how permanent the so-called gig economy is turning out to be. I once thought, perhaps naïvely, that they'd be temporary measures that would fade out of favor once the economic outlook had improved. But there's no sign of a slowdown in the creation of new and innovative ways for people to commit themselves to sub-optimal economic conditions, possibly for the rest of their lives.
In this week's New Yorker, James Surowiecki looks at Upstart, a year-old company begun by ex-Googlers that is giving young people in the post-crash economy the chance to indenture themselves to patrons in the investor class. It does this by making it easy for users to create human-capital contracts — an agreement that says, for example, that investors can give you a lump-sum payment of $50,000 in exchange for 5 percent of your income for the next twenty years.
I think this is an overly bleak view of the 'gig economy' , seeing it in polarisation. Yes it is disruptive. But as a new way of working it also opens up positive opportunities for a lot of ppl - especially many who were excluded from 'traditional' opportunities. We need to find ways of making it work, not winding it back.
The debate over telecommuting that Yahoo has spurred raises an important issue, but it's not simply about workplace flexibility or telecommuting, but rather the fundamental nature of work itself. By 2020, more than 40% of the US workforce will be so called contingent workers. We are quickly becoming a nation of permanent freelancers and temps.
We are quickly becoming a nation of permanent freelancers and temps. In 2006, the last time the federal government counted, the number of independent and contingent workers—contractors, temps, and the self-employed—stood at 42.6 million, or about 30% of the workforce. How many are there today? We have no idea since 2006 was the last year that the government bothered to count this huge and growing sector of the American workforce.
Following the recent economic downturn, the employment rate has recovered at a frustratingly slow pace, except in one area: temporary, contingent, and independent workers. Between 2009 and 2012, according the Bureau of Labor Statistics, the number of temporary employees rose by 29%. A survey of the 200 largest companies found that temporary workers represented, on average, 22% of their workforce, and that percentage is growing. Workers from all different industries (not just tech) are discovering that they’re able to be productive outside of the corporate office and without a long-term employer. At my company, NextSpace, we provide membership to contingent and independent workers from industries as varied as marketing, law, media, accounting, entertainment, construction, art, architecture, and healthcare, along with hundreds of programmers and developers.
The forces behind this sea-change are many: the rapid adoption of mobile technology, ubiquitous internet access, and a general sense of malaise powered by the vague yet nagging notion that we’re just not meant to work all day sitting in a cubicle. Add to that the waste of time, energy and brainpower that commuting engenders, and it becomes apparent that our definition of “workplace” will never be the same. It may seem like a tug of war between companies and workers, but in fact they share common goals: using technology and mobility to maximize productivity, innovation, and well-being.
Sara Horowitz, Founder of the Freelancer's Union has written this very interesting article for The Atlantic. No surprises here, but it's still amazing to read about this shift in our workforce.
"The boom in independent work is changing the way we think about jobs and careers. Does Washington get it?
It's been called the Gig Economy, Freelance Nation, the Rise of the Creative Class, and the e-conomy, with the "e" standing for electronic, entrepreneurial, or perhaps eclectic. Everywhere we look, we can see the U.S. workforce undergoing a massive change. No longer do we work at the same company for 25 years, waiting for the gold watch, expecting the benefits and security that come with full-time employment.
We're no longer simply lawyers, or photographers, or writers. Instead, we're part-time lawyers-cum- amateur photographers who write on the side.
Today, careers consist of piecing together various types of work, juggling multiple clients, learning to be marketing and accounting experts, and creating offices in bedrooms/coffee shops/coworking spaces.
Independent workers abound. We call them freelancers, contractors, sole proprietors, consultants, temps, and the self-employed.
And, perhaps most surprisingly, many of them love it.
Young, skint and slandered by Tories Herald Scotland In Denmark they call it "flexicurity". Thirty per cent of the labour force change jobs each year, and firms can make employees redundant at short notice, without prejudice.
Erika Watson's insight:
Excerpt: "In Germany and Denmark, people can expect to receive three or four times the UK rate when they lose their jobs. They regard young people as a valuable investment and the idea of forcing them into shelf-stacking or nonsense internships is seen as a waste of human capital. In Denmark they call it "flexicurity". Thirty per cent of the labour force change jobs each year, and firms can make employees redundant at short notice, without prejudice. Workers accept it as they know they will be supported while they find another, generally better job. Changing jobs and retraining is a way of life in Denmark - it is often cited by the World Bank as the best country to set up a business."