All accounted for: The case for an ‘all-worker’ earnings measure

Published on Wages & Income

The measures that we use to track earnings miss out the one in seven workers who is self-employed. Given continually rising self-employment and our knowledge that their earnings have taken a big hit in recent years, this briefing estimates what our most regular measure of earnings would look like with the self-employed included.

Our more concrete estimates are dated and our figures for the most recent years are very speculative, but what we have shown here is as clear-a picture as we can get of the earnings of all workers given the absence of proper data. As such, this estimate shouldn’t be taken as a ‘true’ reflection of earnings across the workforce – it isn’t. Rather, it is an informed provocation to think about what we measure and how we use the results.

  • At points, average earnings would have been higher had the data captured the self-employed as well as employees, but since the downturn they would have been consistently lower.
  • Including the self-employed in our most timely earnings barometer would have worsened our view of the fall in earnings since the pre-recession peak by between 20 and 30 per cent.
  • An improved official measure of earnings that captures all workers, not just employees.
  • The collection of better data on the earnings of employees, better data on the earnings of the self-employed and all workers combined, and more regular accurate data on household income.