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Self-Employment in Lancashire

July 2004

Introduction

Self-employed workers are classified as people who earn income directly from their own business, trade or profession rather than earn a specified salary or wage as an employee, whether or not they employs other workers.

A wide variety of people and professions fit into the self-employed category. All freelancers could be considered self-employed, although that does not mean that all self-employed people are freelancers. People who have one established place of business - shopkeepers, doctors, lawyers, funeral directors, for example – are self-employed, but do not fit into the "freelancer" category.

Professions that contain large numbers of self-employed include accountants, appliance repairers, architects, blacksmiths, cabinetmakers, counsellors, dentists, doctors, dieticians, funeral directors, lawyers, pest controllers etc.

Self-employed workers can decide where, how and when they will work which allows them to balance work and family life in a way that is usually impossible as a salaried employee with a full-time job. However, the down side is that on average, they earn only 70 to 80% of what salaried employees earn (although underreporting income could account for the difference), and they work slightly longer hours. A closer analysis of the figures however reveals major earnings differentials between the genders with self-employed men actually earning as much or more than their salaried counterparts. It is female self-employed workers who earn substantially less, which results in the overall negative differential between salaried and self-employed earnings levels.

Lancashire

Self-employment is said to usually increase when total employment growth turns negative due to an economic downturn. This is thought to be because when job market conditions tighten, more people who cannot find suitable employment tend to start their own business and become self-employed. The long period of economic growth that this country has now experienced has meant that this reason for choosing self-employment has not been particularly relevant for some years. The most recent figures suggest self-employment has continued to be a choice of preference for many even when there are good opportunities in the salaried sector.

Generally, the increasing trend towards self-employment has supported total employment growth. In 2001, the percentage of self-employed workers represented approximately 13.2% of the total of the labour force of England. Approximately 83,000 people (13.5%) in Lancashire are self-employed, according to the 2001 Census of Population, a figure that is slightly higher than the England average and noticeably in excess of the percentage of for North West (11.9%).

At the district level, the highest percentages of self-employment were in Ribble Valley (18.9%) followed by Wyre (17%), whilst the lowest were in Burnley (10.2%) and Preston (10.3%).

Percentage of the Workforce Who Are Self-Employed Source Census of Population 2001

Self-Employment by Occupation, 2001

Table 1 details self-employment figures by nine broad occupational groupings. Numbers are presented for the district, sub-county, county, regional and national levels. Skilled trade occupations are the main occupational group both in England (28.2%) and at the Lancashire NUTS-3 level (28.9%), whilst Managers and Senior officials is the second most popular group for self-employed workers. At the other extreme, the lowest percentage of self-employment by occupation was registered on sales and customer services in England (2.5%) and on administrative and secretarial occupations for the case of Lancashire NUTS-3 (3%).

Self-Employment by Industry, 2001

In 2001, England registered 19.2% of self-employed people working in construction and 17.5% in real estate, renting and business activities, while registering just 0.3% (the same percentage as Lancashire County) in electricity, gas and water supply sector.

Wholesale and retail trade, repair of motor vehicles was the industry that registered the highest percentage of self-employment in the Lancashire NUTS-3 (20.3%).

This page was compiled by Bryan Moulding .

All enquiries from the media should be sent to Corporate.Communications@lancashire.gov.uk .

Any other questions about the content of this page may be sent to EconInfo@lancashire.gov.uk .

For all enquiries about the county council's services , contact the Customer Service Centre on 0845 0530000 (01772 530000) or at Enquiries@css.lancscc.gov.uk .

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