Self-employed workers get pay boost thanks to the minimum wage

New research has indicated that above-inflation increases in the national minimum wage (NMW) has helped to boost the pay of self-employed workers.

The Resolution Foundation has revealed that while self-employed people are not entitled to be paid the legal minimum wage, annual rises in statutory pay has had a direct impacton them.

When the NMW was introduced, some experts predicted that it would have a negative impact on employment, forcing more people into self-employment.

While there does appear to be a correlation between increases in the minimum wage and rising self-employment, it is not clear how the two are connected.

The report from the think tank said that self-employment has grown fastest in some higher-paying sectors like finance and publishing but has fallen in other lower-paying industries such as agriculture, care and sales occupations.

Nye Cominetti, Economic Analyst at the Resolution Foundation, said: “One of the fears about the introduction and ramping up of the minimum wage has been that it would push low-paid employees into self-employment, where they’d have fewer rights at work and no entitlement to a legal wage floor.

“But in fact, the minimum wage appears to have had more of an effect on the earnings of the self-employed than it has on driving up self-employment.

“Much like employee pay, self-employed earnings have grown fastest at the bottom since the introduction of the minimum wage 20 years ago.

“Today, the most common hourly pay rate for self-employed workers is the same level as the national living wage.

“With over a third of self-employed workers still in low pay last year, policymakers need to respond to the risks they face, including better statutory rights to help offset their highly volatile incomes, and more savings support.”