What’s been happening to self-employed women during the pandemic?

What will the overall impact of the pandemic be on self-employment, and what how will women be affected in particular?

Self Employed

 

Many of the self employed have had a rough deal over the course of the pandemic. Falls in self employment have been a regular feature of ONS statistics during the pandemic, with the most recent fall in employment mainly driven by decreases in the number of full-time self-employed people and part-time employees, according to the Office for National Statistics.  A significant number of self employed people have missed out on Government support over the last year.

They include directors of limited companies who pay themselves via dividends and those who make less than half of their income from self-employment. Many self employed businesses have gone under.

Even for those who have been eligible for help, the picture has not necessarily been positive. Pregnant women or new mothers have only been able to claim reduced SEISS because it takes into account their income while they have been on maternity leave. Moreover, an analysis of SEISS and gender by the Women’s Budget Group shows that, by the end of January 2021, only 28.8% of all SEISS claims had been made by women despite women making up 34.8% of self-employed workers. 632,000 self-employed women (28.8%) made SEISS claims totalling just over £1.4 billion by January 2021. This compares with 1,557,000 claims made by men, totalling nearly £4.8 billion.Only 60% of eligible women claimed SEISS, compared to 68% of eligible men. Moreover, women on average claimed £2,200 SEISS, while men claimed on average £3,300, which is explained by women’s typically lower earnings.

The Women’s Budget Group says part of the reason for the differential between men and women claiming SEISS is due to the 50% rule as more women are likely to work part time. HMRC estimates about 1.4 million self-employed people in the UK did not qualify for SEISS because of the 50% rule.  More and more women have a ‘side hustle’ either to boost their income or while we build a self-employed job. Even if they could access the furlough scheme for their other earnings, this may have been 80% of a part-time role paid at minimum rate. The Women’s Budget Group says the figures show that the government “has failed to consider the employment situation for women”.

This is clear not just in SEISS policy, but in areas such as maternity pay which fails to reflect the fact that so many women nowadays have multiple part-time jobs and/or do self-employed work. It cannot be right, for instance, that if you do two well paid part-time jobs you get two lots of SMP, while if you do several poorly paid part-time jobs or a part-time job and a self-employed job you only get one lot of Maternity Allowance.

Legislation needs to be much faster at responding to such trends because they are only likely to speed up.

Disruption

All the talk of late has been of people fleeing self employment for greater job security within the employed sector. But no trend remains stable for any period in the current turbulence and it is likely that we will see a swing back, in part because self employment is often the only way to supplement low paid jobs or to get greater work life balance. Figures show, for instance, the number doing a side hustle during the pandemic has risen, according to a survey, showing nearly two fifths of people freelancing as a side hustle began over the last year.

Figures out this weekend from IPSE and PeoplePerHour show an upswing in earnings for freelancers and in their confidence in the economy, rising to pre-pandemic levels in the first quarter of 2021. Moreover, in the aftermath of financial crises self employment tends to increase as employers outsource project work rather than take on new staff as they seek to respond flexibly to uncertainty.

Yet there are other things at play besides Covid. IR35 legislation on so-called disguised employment being rolled out to the private sector could have a big impact on freelancers, for instance, and the legal cases against the likes of Uber who had been hiring people as self-employed contractors in order to cut costs is highlighting the need for greater clarity over employment status.

However, the current uncertainty in the labour market is no temporary thing. In his book Undisruptable, Aiden McCullen suggests this disruption is something we will have to swim with and that the current could change at any given time. He talks about even Amazon admitting that it is not too big to fail. Nothing is certain. We have to prepare ourselves for the next wave.



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