We’re not all in the same boat and too many are sinking
10 December, 2020
Vaccine or no vaccine, Covid is here to stay: So what happens to the self-employed?
THE pandemic has exposed many divides across society, in race, gender and class.
The disproportionate impact of Covid-19 on the poorest and black and minority ethnic people has been well-documented. But there is another imbalance that is not so often talked about: between the salaried and self-employed.
A young early school leaver from the Maiden Lane estate left a “job for life” with Royal Mail to buy his own taxi two years ago, after devoting four years to learning the Knowledge. Many like him will have gone freelance to pursue the dream of a more independent life.
Some will have been forced to do so by sick relatives, new-born babies or schoolchildren. Many will have lost shifts this year as employers tighten belts and find cheaper ways of running businesses digitally.
Through no fault of their own, this large but disparate group has been left without a proper safety net.
Nationally, around 15 per cent of the working population are self-employed; there will be tens of thousands in Camden, although these numbers will have significantly fallen this year.
Figures show how applications for Universal Credit, the only viable option for many self-employed, have risen.
In Camden’s two political constituencies, there are around 14,000 people receiving the benefit – more than five times the count last year. But this pales in comparison to the numbers of self-employed in the borough.
Many will have worked cash-in-hand jobs, perhaps earning under the threshold for a tax return or without documents to prove “trading profits”, making them ineligible for the support packages available.
Awareness of the financial schemes for the self-employed is low; just 2.7 million nationwide people applied for the Self-Employment Income Support Scheme.
How many salaried workers would have been able to get it together to fill out the forms and provide the information required had their employers’ accounts teams not done it for them?
Thousands will have been pushed into “gig economy” jobs, which are booming, but which can be demeaning and offer little protection. There is a sense of shame among workers who have lost everything and often a large part of their identity.
Few would have foreseen the problems coming down the line while many will have become over-optimistic this summer about when their incomes would recover.
The growth of self-employment has been a key trend in the labour market in the past two decades. The question for policy makers will be whether the crisis represents a permanent shift or a short-term shock.
Vaccine or no vaccine, Covid is here to stay. With the furlough scheme coming to an end again, many many more will be facing up to the reality of having to change.