Self-employed trades' wages fall below employees
Wage rates among freelance trades people have dropped to the extent that some are paid less than equivalent company employees, according to new research from freelance contract and payroll provider Hudson Contract, reports Construction News.
The study, which compared the weekly wages of 13,670 subcontractors in October 2010, found that increased competition for work brought on by the recession had forced some self-employed subcontractors to work for up to 50% less than in 2008.
Worst hit were freelance demolition workers in the Midlands, who earned an average of £269.50 a week, while joiners in the South-west earned an average of £359.54 per week.
Both rates are well below the £401.70 minimum weekly rate for skilled employed workers set by the Construction Industry Joint Council Working Rule Agreement, which agrees rates of pay for roughly 600,000 construction workers on major building and infrastructure sites.
Freelance rates are likely to fall further in the wake of forthcoming public spending cuts, said according to David Jackson of Hudson Contract. “Everybody wants more for their buck ...winning work comes at the price of lower tender values. All subcontractor businesses are being squeezed to offer their services at lower rates, and where they have a freelance workforce then that freelance workforce also takes the work at lower rates.”
He added: “In some instances you can see a 20% to 25% drop from two years ago. In some extreme instances that I know of first-hand it is 50%. Freelance operatives’ pay used to outstrip direct wages by as much as 50%, but you won’t find that anywhere these days.”
However, the study found that in several areas of the country self-employed workers earned similar wages to their employed equivalent, but without the associated benefits.
For example, the weekly pay for self-employed bricklayers in the Midlands is now approximately £435.40 per week, roughly equivalent to the £434.40 per week taken home by employed bricklayers in the region, according to figures published in The Office for National Statistics 2009 Annual Survey of Hours and Earnings.