Self-employed workers are on course to be disproportionately affected by the coronavirus accident; new analysis revealed as the government prepares to unveil a package of support for them.
According to the Institute for Fiscal Studies (IFS), those who work alone are more likely to be in poverty already. They are also over-represented in sectors of the economy that will be most affected by the epidemic.
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The chancellor has already announced measures to support full-time employees, with the result that 4 percent will still get at least four-fifths of their average income during the crisis. But the steps are taken so far for self-employment even leave millions at risk of losing a large part of their income.
Helen Miller of IFS said: “They are currently receiving much less protection than employees. The government should look into what else can be done for this group.
Vulnerable group
Although some self-employed people — such as barristers, consultants, and successful entrepreneurs — are disproportionately wealthy, on average, they earn less than employees.
The average monthly income for the self-employed stood at £ 1,180 after tax in 2017–18 (most recently available year), £ 360 a month less than for employed workers.
Twenty-three percent of self-employed Britain are in relative poverty when adjusted for hosing costs, more than double the proportion of employees in poverty.
Hard hit
Self-employment is also likely to work in more jobs that would be negatively affected by the Covid-19 outbreak, with 22 percent — about one million people — employed in retail, transportation, leisure, or “personal services,” such as cleaning. As for the hairdressers, all of whom are expecting a slowdown in the coming weeks and months.
Another 600,000 works in construction, an area whose future is under question as the government faces pressure to close most building sites shortly.
Adding to their plight, 600,000 self-employed parents have had to take a young child out of school, meaning they will have to stay home to take care of them.
Response so far
Sage Sunak’s support for the staff has been widely praised — even Bernie Sanders, a firebrand left-wing US senator, said: “What is happening in Britain is the appropriate approach … We should have given it directly here.
The IFS calculates that 4 percent of people with full-time jobs will have a “replacement rate” —even if they still receive a proportion of their regular income if they are unable to work usually — at least 40 percent.
In contrast, only around a quarter of the self-employed have such a guarantee, despite Universal Credit promoting design figures to help them. Shadow Chancellor John McDonnell said: “The government should announce today a package that can be delivered quickly, giving the self-employed the same level of protection as other workers.
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