News and Background

Transfer
2017, Vol. 23(3) 367–369
Self-employment: a view ª The Author(s) 2017
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DOI: 10.1177/1024258917713844
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In my capacity as a self-employed proof-reader (and advocatus diabolic) of ETUI articles, I have

reviewed a number of contributions to the Transfer issue on digitalisation, many of them
castigating the rise of online platforms and crowdworking. They leave the impression that all
self-employed people work under terrible conditions, generalising the Uber and Amazon
Mechanical Turk situations (the ‘Uber economy’) as synonymous of self-employment. Being
self-employed myself, I experienced much difficulty understanding the argumentation. For this
reason, I am writing this short article, attempting to highlight other aspects of this increasingly
popular form of employment.
The attraction of self-employment is that it releases you from many of the shackles of paid
employment. Theoretically, you can work when you want, where you want, how much you want,
and without instructions from above. But it’s hard work and you’re out in the jungle, fending for
yourself. There’s no regular pay packet at the end of the month, allowing you to plan your budget.
Initially, work doesn’t come to you, you have to go and get it. And you have little social protection,
as social protection is designed for the employed, not the self-employed.
Self-employment covers a very wide range of occupations. At the top end of the scale we find
the ‘liberal professions’: doctors, lawyers, architects. In the middle, we find a plethora of specialist
occupations: midwives, photographers, translators, artists, journalists, (e-)shop-owners, web
designers . . . many of whom are riding the digitalisation wave. At the bottom end (and with a
much lower degree of voluntariness), there are the couriers, white-van drivers and seasonal
agricultural workers, many of them working for a sole employer in a bogus self-employment
capacity. Moreover, the ranks of the self-employed are being swelled by companies dismissing
their employees and then asking them to work for them in a self-employed, project-based capacity,
thereby reducing their ‘fixed’ costs. When discussing self-employment, this whole spectrum needs
to be taken into account. Uber drivers and Amazon Turk translators are not the sole representatives
of the self-employed caste!
Starting up in self-employment is a tricky business. You might be a good photographer or
translator, but you have no customers. You’ve got to make yourself known. You can spend
thousands on advertising, on websites, but you have no guarantee that this will bring you trade.
Ultimately you get trade by building up a reputation for good work, gaining customers by
word-of-mouth. The self-employed world is a meritocracy.
This can take years. But you need to feed, clothe and house yourself now, especially if you
are the main breadwinner. There are two (complementary) ways of overcoming this challenge:
(i) working part-time in a regular job to gain sufficient income (and social protection), and
devoting the rest of your time to your preferred self-employed activity; and/or (ii) working with
one or more agencies.
Let’s take a closer look at the second aspect, working for an agency. Such agencies act as
intermediaries between the self-employed worker and customers. In some ways, an agency
368 Transfer 23(3)

constitutes a virtual company, gaining work from its customers, and passing it on to its ‘employ-
ees’, i.e. its contact list of potential providers. The agency takes my marketing needs off my hands,
while I supply it with the services its customers want. I am fully aware that the agency rates my
work on the basis of the customer feedback it gets. Good work ¼ more work, i.e. promotion. Bad
work ¼ no more work, i.e. dismissal. I am similarly aware that the agency bills its customers at
much higher rates than those found on my invoices to the agency. The agency is not a social
institution, but a for-profit company. Obviously, it is more lucrative for me to work directly with
customers, but until you have built up a reputation, agency work is the second-best option.
This brings us to online platforms. The concept behind them is not new, as such platforms are
basically agencies. All that is new is the application of state-of-the-art information and commu-
nication technologies to them, almost totally doing away with the human interface. If you adopt
this view of an online platform as an automated agency, it loses much of its negativity. Such
platforms only become negative when they openly exploit workers in desperate straits – as is
unfortunately sometimes the case.
Let’s now look at the financial side. Self-employed, you don’t get a steady wage, instead being
paid by what has now become known as ‘gigs’ (all self-employed people work in the ‘gig’
economy). A gig is a piece of work you are commissioned to do, either directly by a customer
or indirectly by an agency. In my field of translation, you might find yourself doing 20 small gigs a
day, or one large gig that lasts several days. You are not paid by the hour, but by gig. If you have
1000 lines to translate, you charge €n per line. Whether that translation takes you 10, 20 or 50 hours
is totally irrelevant for your invoicing. There is no such thing as a minimum wage. If it takes you
under 10 hours, you are theoretically well above the minimum wage, if you take 50 hours, you are
below it. But no law in the world can determine your wage rate, because you don’t receive a wage.
The same applies to working hours. One of the reasons for becoming self-employed – and
increasing numbers of well-educated young people aspire to such – is that you can determine your
working hours. Working time regulations do not apply to you. There’s nobody and nothing to stop
you working 24 hours non-stop, or for taking the day off when the sun shines. It’s your free
decision. Volumes of work may vary dependent on the season. In my case, work is thin on the
ground in the summer holidays. As the farmer’s adage goes, ‘make hay when the sun shines’. You
have good months and bad months. But it is up to you to earn enough on average to provide for
your daily needs – and for your social protection.
As an employee, you have automatic access to social protection, financed by you and your
employer. Working in a self-employed capacity means you are both employer and employee, i.e.
required to pick up the whole social protection tab. I work in Germany, and here you have no such
automatic access. To gain the protection afforded by the social security system, you have to take
out private insurance1, whether for health care, disability or retirement. Health insurance is com-
pulsory and expensive, whereas there is no obligation to pay into any pension fund. If you are on
the bottom rung of the self-employed ladder and on the breadline, there is little you can do to build
up any pension rights.
In my view, the problems raised in the articles with regard to social protection have little to do
with digitalisation, online platforms or crowdworking. They have everything to do with the
increasing shift away from regular employment towards self-employment, in some cases (but
by no means all) driven by unscrupulous employers wanting to reduce their ‘fixed’ labour costs
by making their employees self-employed and thus avoiding all social costs.

1 There is also an opt-in possibility for the statutory health insurance system.
Lomax 369

In my view, we have got to stop thinking about social protection in its Bismarckian form. A
system based on social security contributions, with employers and employees sharing the burden,
belongs to the old economy. It just does not match the new economy where increasing numbers of
workers – and not just the high-earning ‘liberal professions’ – are self-employed, needing
protection against being unable to work through sickness or disability, and – at least in Germany –
needing protection against not having enough income to pay for private insurance. The only viable
path is to provide everyone with a basic income, with health care, a basic pension, etc. paid for out
of tax. With such an income, the capacity in which you work – whether employed by a company or
self-employed – becomes totally irrelevant.
At first sight, this may seem like a major paradigm shift. But social security contributions are in
many ways a form of taxation, levied on personal and corporate income. Incorporating them into
general taxation not only removes a lot of red tape for companies and a lot of government bureau-
cracy, but also eliminates an aspect referred to by one author: the fact that companies resorting to
freelancers instead of paid staff (inter alia the online platforms) do not have to pay social security
contributions for their workers, enabling them to undercut companies using employed staff.
With its tax-funded National Health System, the UK goes a first step in the direction of a basic
income, shifting the funding of health care from insurance to tax, and thus substantially easing the
social insurance burden on the self-employed. This is possibly one of the reasons why the inci-
dence of self-employment in the UK is the highest among EU Member States.
Another aspect of social protection concerns the role of trade unions. Do the self-employed need
representation? Like social security, trade union membership is generally for employees, not for
the self-employed. For the exploited (bogus) self-employed on the bottom rungs of the self-
employment ladder, union representation is very much needed, though organising them can be
very difficult. The higher up the ladder you go, the less attractive unions are, as people on these
upper rungs tend to be entrepreneurs, i.e. much more ‘employers’ than ‘employees’.
As a concluding remark, let me underline the need for differentiation when writing about the
self-employed. In an unexploited form, self-employment can be very fulfilling, although more
needs to be done to improve its accessibility, e.g. through the provision of a basic income. In an
exploited form, self-employment is a curse, needing a whole broadside of statutory and judicial
instruments to prevent its spread.

Funding
This research received no specific grant from any funding agency in the public, commercial, or
not-for-profit sectors.

Richard Lomax
Self-employed translator and copy editor, Holzkirchen, Germany