Following on from yesterday’s post on inequality, I discovered this OECD country report on inequality in the UK.
Assortative Mating (see yesterday’s post) has played a more significant role in increasing the earnings gap in the UK, says the report:
Unlike many other countries, the earnings gap between wives of rich and poor husbands has grown strongly: this gap was about GBP 3,900 in 1987, but increased to GBP 10,200 in 2004. [Expressed in 2005 values]
But not as much of a role as self-employment, it seems.
Remember last month, I was less than enthusiastic about the jump in the number of self-employed people. Seems I was right to be worried.
About one-half of the increase in individual earnings inequality is explained by changes in self-employment income as on the whole the self-employed earn less than full-time workers. Their share in total earnings increased by one fifth since the mid-1980s and among the self- employed, the gap between high and low earners has risen.
According to the OECD, its member state with the highest level of non-agricultural self employment is Greece. The lowest is Norway.
As the Americans say, go figure!
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Not all ‘self employed’ people are economically active. I often come across people who say they are self employed but have no business, no business plan and no plan to have one. They prefer this to “I am unemployed” or “I am a housewive or househusband”.
Equally not all self employed people are economically effective. By which I mean I frequently meet people with micro businesses who tell me they are not making enough money. Being a helpful person I normally ask “How much money do you need to make – how much is enough”. Many cannot say (I don’t mean won’t say). If I push them gently and say, “How much money do you need to pay your business overheads before you get paid” more than half do not know the answer to that question. I see these people as having hobby businesses or lifestyle businesses rather than full time enterprises.
I would be interested to know if there w