Thursday 27 October 2016

Policymakers can't ignore the self-employed any longer

Lorraine Courtney

Published 17/02/2016 | 02:30

'In the run up to the General Election, perhaps the self-employed can find comfort in the offers of the political parties? Not at all.'
'In the run up to the General Election, perhaps the self-employed can find comfort in the offers of the political parties? Not at all.'

According to the latest CSO data, 327,500 of us are self-employed. That's 16.9pc of total employment and lots of us trying to make a living, navigating the financial ebbs and flows. From rent-a-chair hairdressers to the owners of tech start-ups, the self-employed are everywhere.

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But our voice is scarcely being heard in the election, nor are our interests reflected in debate.

The self-employed people I know talk about how much they enjoy being their own boss, or having the flexibility to work their hours around the other things that are important in their lives, like child care or studying. The rise in this way of working shows little sign of reversing and throws up a huge number of policy questions if we want to ensure that this rapidly changing employment market doesn't leave hundreds of thousands of workers precariously standing alone at the mercy of market forces. The questions may well be there but they are not being addressed in the election.

It's clear that existing systems have been too slow to catch up with our rapidly changing economy.

Sadly, the advantages of flexibility come at the high price of zero security. Self-employed people in Ireland face a tax penalty for their work choice. They pay higher rates of taxation and have higher costs related to tax compliance. The self-employed people don't have access to the basic social protection benefits that PAYE workers have. They don't have access to the basic training and jobs activation schemes that PAYE workers have. They're discriminated against when it comes to State pensions. On top of all this, the self-employed don't have any of the usual supports such as annual holidays, sick leave, family leave, etc. Not one of our leaders seems to care.

There's also the problem that self-employment status is being used as a convenient label, to deny workers their true rights and to save money. Bogus self-employment and contracting work deprives the Government of tax revenue (these employers avoid having to pay employer PRSI for the individual) and workers of sick pay and other protections. While much of this work is done legitimately, there is concern that some employers are deliberately misclassifiying workers. Joint investigations involving the Department of Social Protection and the Revenue Commissioners discovered almost 200 cases in the construction industry alone last year.

The reality of the modern workforce is going to mean that self-employment will continue to rise as we become more entrepreneurial and intrapreneurial. We also know that people are increasingly looking for greater autonomy over how they work. The entire economy benefits from the flexible expertise and innovation that independent professionals and the self-employed can deliver. But it's imperative that the penalties the self-employed are now paying are erased.

In the run up to the General Election, perhaps the self-employed can find comfort in the offers of the political parties? Not at all. Others may have paid lip service, but the only party to make addressing the issue a key policy is Renua.

It launched its 'A Better Deal for the Self-Employed' policy document last year, saying that, "domestic wealth creators - particularly in the small and medium enterprise sector - are not valued by the Irish State and its governing apparatus... Our economy is reliant on foreign direct investment as its sole source of growth, while the high street is struggling to survive."

Renua says that the rate of Universal Social Charge (USC) paid by the self-employed would be brought into line with PAYE workers (they currently pay a higher rate) and the party also says it will ensure self-employed workers are given the same tax credit as those in the PAYE system. When will the other parties sit up and take notice? Bragging about our 'knowledge economy' on international ministerial junkets can't get us anywhere, if we don't reform ourselves first and give people who work for themselves plenty to celebrate. Because for so many, enterprise comes at too brutal a cost.

So would I recommend the self-employed life? In some ways, absolutely. You can forget the morning dash for the 46A. Instead, I have time for a jog and the headspace to read a raft of interesting books. On the downside, have I earned enough this month to pay my share of the household costs? The answer is probably not, despite working pretty much every day of it.

If we want to build a strong economy, we have to realise that everybody can't work in the public sector and that we can't just leave the self-employed on their own to sink or swim.

Independent workers are pivotal to our economic success and policymakers can't ignore us any longer.

Irish Independent

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