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Britain's chronic wage problem comes from the self-employment sector

Ben Moshinsky   

Britain's chronic wage problem comes from the self-employment sector
Finance1 min read

Commuters wait for buses at Victoria Station in London, Britain August 6, 2015. Millions of Londoners struggled to work on Thursday as a strike by underground rail staff brought the network to a standstill for the second time in a month over plans for a new night-time service.

REUTERS/Darren Staples

Commuters wait for buses at Victoria Station in London, Britain August 6, 2015.

There is a party going on in the UK labour market and self-employed people are not invited.

While the UK is enjoying growing labour participation rates and lower unemployment, the self- employed are earning less than they did in 1994, according to a report by the Resolution Foundation, an influential economic think-tank.

Data compiled by the group show that self-employment earnings fell by 32% - or £100 per week - between 2007 and 2014, meanwhile the numbers of self-employed jumped by more than a million people between 2002 and 2015.

Self-employment has become a more important part of the UK labour market at a time when pay for that work is in free-fall.

"The depth of the post-crisis earnings squeeze for the self-employed is striking, given that is not explained by compositional change," Adam Corlett, the report's author, said. "But, whatever the reason for these shifts, the degree of change reinforces why a full picture of the labour market must include the self-employed as well as the employed."

Here are the key charts.

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