The Guardian reports that Andy Haldane, Chief Economist of the Bank of England, saying that the rise in self-employment and drop in union membership mirrors weak workforces of pre-1750 era. More critically, trade union membership in the UK is expected to continue to decline, across all age groups.
This is an extremely interesting article. If you’re a socialist, perhaps you would argue that the demise of organized labour is a weakness and individuals are being exploited? On the other hand, many self-employed people regard themselves as entrepreneurs – but as Haldene highlights very few of these self-employed people employ other people.
So we should argue that the growth in self-employment makes the UK more competitive, compared to country’s like France where the labour sector is completely unreformed? Well, no, unfortunately, there are too many market intermediaries that distort the market. The employment agency sector is dominated by a number of large firms that are distorting true market competition. Ideally, we need true almost zero cost based selection of the self-employed, via the web. Many large agencies profess to having expertise but it’s questionable where they add value. For example, both central and local government engage vast numbers of self-employed contractors, using these biased channels of selection – this is part of the austerity challenge.
Another area of market imperfection is in relation to multiple experts being able to compete with large firms of consultants – the latter often charge GBP5k plus for partner level expertise and will frequently deploy inexperienced consultants, sometimes just out of university.
For greater insight, look at the following highly rated blogs:
- Four Reasons Why a Professional Interim is a Smarter Choice than a Management Consultant?
- What’s the difference between an Interim Manager and a Management Consultant?
- Utilising Professional Interims to Help Reduce the Budget Deficit – Removing Catch 22?
Let me ask an open question:
If the Tory party truly represented small businesses and free competition, surely they would reform the supply model and replace large agency contracts?