A myth of enterprise culture debunked

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The Independent Online
THE GROWING army of self-employed are not the high-earning entrepreneurs of ministerial imagination, but often low-paid and low-skilled.

The claim is made by the Institute of Manpower Studies, which today publishes an analysis of official statistics aimed at debunking some of the myths of the enterprise culture.

The self-employed are a widely divergent group including not only the 'successful entrepreneurs and small business people of popular stereotype, but also a significant and growing group with very low incomes', says a co-author, Nigel Meager.

The survey concludes that there is a much wider range of incomes among the self-employed than the employed, with a higher proportion of the very wealthy and a greater and growing percentage of the poor. Men are over-represented among the high earners, while women form a bigger proportion at the other extreme.

A self-employed person is three times more likely to be in the poorest tenth of the workforce, the research found. Low-earners are found in activities such as hairdressing and cleaning, agriculture and the clothing industry. The highest earners are in banking, finance, business services and construction.

Many new businesses are in crowded, low value-added markets, especially in the service sector where earnings and survival prospects are relatively poor. Older people who have been self- employed are much more likely to have lower savings and pension entitlements and to be in the poorest tenth of pensioners.

Mr Meager said the study, prepared as part of the Joseph Rowntree Foundation research on income and wealth, presented policy problems for the Government which would have to ensure pensions and National Insurance systems were adapted accordingly.

The study says the growing number of self-employed can be attributed to a decline in manufacturing and a shift to 'contracting out'.