The great jobs deception

[Image: ONS.]

[Image: ONS.]

It is sad that many people are likely to see this month’s headline increase in employment and take it as a sign that the British economy really is on the mend, as the Coalition keeps claiming.

Silly, silly people.

Exactly one week ago, the Department for Work and Pensions announced “the steepest annual fall in unemployment in a quarter of a century“, adding that “unemployment fell by 437,000 over the past year – and 132,000 in only the past three months – which is the biggest annual fall in 25 years”.

This blog has already pointed out that it is possible to account for all of the drop in unemployment over the last three months as being due to sanctions placed on jobseekers by the Department for Work and Pensions. The figure is meaningless.

The DWP also stated that the number of people in work was continuing to rise, “with 820,000 more people in a job compared with 12 months ago”. This masks an inconvenient truth that ministers would rather you didn’t know – about self-employment.

Self-employment, the government would have you believe, is one of the great success stories of the Coalition. More people are self-employed now than at any point over the past 40 years – with the total number of people in self-employment rising by 408,000 in the last year, to 4.59 million according to the Office for National Statistics.

The ONS also tells us that the rise in total employment since 2008 is mostly among the self-employed, which may – on the face of it – seem good.

Here’s the hammer-blow: Average income from self-employment has fallen by 22 per cent since 2008-9.

Self-employed people are a lot worse-off than they used to be.

It seems Flip Chart Fairy Tales was absolutely right to say fewer people were leaving self-employment (the ONS confirms this), and we may conclude that FCFT is right in its belief that this is because people have not been able to reach their target in terms of pensions (the number of over-65s who are self-employed has more than doubled in the past five years to reach nearly 500,000), or there is no employed work available for people of their expertise or experience.

These are people who are seeing their business shrink but have nowhere else to go. For them, there has been no economic upturn at all.

Figures also show an increase in the number of self-employed tax credit claimants. This is because claiming self-employment and taking tax credits is easier than signing on the dole and living in fear of being sanctioned.

More people are in work – those figures aren’t wrong, but the reasons behind them are not what the government would have you believe.

Self-employed people are remaining in business, despite dwindling returns, because they simply cannot afford to stop.

Those who are claiming tax credits are not contributing to the economy – quite the opposite, in fact.

So the latest employment figures are nothing to shout about and the government is deceiving you in doing so.

A better indicator of our economic well-being would be to measure the number of people who contributed to the Treasury by paying income tax.

The government does not provide that figure.

Quelle surprise.

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  1. Peachy August 20, 2014 at 3:36 pm - Reply

    I’s unfair to say self employed people are not contributing, quite unfair. It’s common for a business to take time to getboffbthebground but claiming for a year or two often is a prelude to hiring several people, paying rent and taxes. It also enables people to keep skill high, and set an example of a work ethic, so has short term gains whilst investing in infrastructure. Also- economically- input is made into the business and assets in a way which DOES help the local economy, investing in stock / premises / marketing / training and many other things. I conatantkyvdefend ny carer role and it’s economic impact using wider cost to society arguments, I think self employed people are entitled to the same credit.

    • Mike Sivier August 20, 2014 at 5:49 pm - Reply

      What we’re seeing, though, is a lot of self-employed people, who would otherwise be winding down their business, keeping it going and claiming tax credits rather than signing on – as the article makes clear. That is a far cry from the scenario you are suggesting.

  2. Maria August 20, 2014 at 5:37 pm - Reply

    sad but true and this has been going on for some time, no problems have been solved, just a load of people being shifted form one place to another, the welfare safety net has had its holes made bigger and so a lot of people who really need help fall through the net more easily.

  3. jeffrey davies August 20, 2014 at 6:14 pm - Reply

    you forget that they talked many into going self employed and told them whot they could claim by doing it but on their modern slavery contracts no hours some will be found not deemed to have worked enough hours thuss they get to pay it back isnt it a shame when they wernt told that and that many stacking shelves for the salvation if thats not right either but are deemed to be working yes its looking rosie in the tory garden jeff3

  4. jray August 20, 2014 at 7:26 pm - Reply

    Talking to a former employee of one of the WP Providers (she signs on the same day as I do) she made a point that going self employed was pushed on those that were the hardest to help,because the Providers were not about to actually spend any money on them,she went on to describe that a lot of pressure was being applied from head office.

    There were only 2 reasons given to her (1) The Provider needed to meet the minimum performance required under the contract in order to keep the WP alive (bonuses?) (2) Not to worry about what the client was doing,just make sure they stayed self employed the longer the remained self employed the more outcome/sustainment payments they (the WP) could collect.

    She also mentioned that once the maximum payments had been collected,she was to disengage with the client.

  5. bookmanwales August 21, 2014 at 7:54 am - Reply

    “The great jobs deception” goes beyond the use of self employment to massage the figures the whole unemployment sector is a huge lie.

    You may or may not have noticed that the term “claimants” is now the official term when discussing unemployment in place of “jobseekers”, this means only those actually receiving benefits are counted and not those actually looking for work or signing on and receiving no benefits.

    So those sanctioned, those not eligible for benefits, and those on zero hour contracts, who still sign on but receiving little or no jobseekers allowance are not counted.

    If you look at all the quarterly figures released you will actually see a shortfall of around 100,000 between the number of people supposedly finding employment and the number of people actually available to make up for the rise in employment levels.

    Had unemployment levels fallen by the amount released then the welfare bill would no longer be such an issue and further cuts unnecessary.

    However, with all the lies told, and in order to justify further cuts, they repeat the lie that those still on unemployment benefits are receiving far too much and hence the need for further caps.

    • Mike Sivier August 21, 2014 at 8:50 am - Reply

      You’re preaching to the gallery here – as this and previous articles have made clear. It is always worth repeating these facts, though.

  6. Nick August 21, 2014 at 1:14 pm - Reply

    it’s not possible for any of these figures to be reliable as to do so you would need to have full access into peoples private lives including there bank finances

    the only way that you can tell how the real economy is going is by going on how the property market along with the retail index as that is a very stable tool to work with

    having said that only London is booming and that only applies to the Chinese investors for everyone else is sky high mortgages along with high travel costs and stagnate wages

    if you could move to a non EU country which had our benefit and NHS system you would find that the population of the UK would be halved over the coming years such is how bad overall the UK is for raising a family in a stable and cost effective house along with all the other basic needs that are needed but are a struggle to get hold of at this time in the UK for the average family

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