ILPC 2027

In Ireland today the cult of the entrepreneur is central to economic policy and discourse and indeed to broader national self-understandings. Self-employment has become seen as self-evidently socially desirable and understood as the result of a new individual spirit of ‘entrepreneurship’.  A somewhat different narrative focuses on the rise of gig economy and of internet-based forms of self-employment such as Deliveroo.  As this paper however shows, a crucial component of Irish self-employment has been the rise of self-employment in construction.  

Debating whether such changes are forced on workers rather than actively created by them connects to the long-standing debate over self-employment.  In a classic paper Bögenhold and Staber (1992) distinguished between the ‘logic of autonomy’ and the ‘logic of necessity’ in self-employment.  In the latter case, the self-employed set up their own business because they cannot find direct employment.  However, in the new self-employment in construction the ‘necessity’ is much more direct: workers are compelled by employers to become self-employed in order to continue in their normal work.  As has been shown for similar changes in Britain (Behling and Harvey 2015), this is actively facilitated by state policy.

The paper begins by documenting the changes.  In 2007, at the peak of the ‘Celtic Tiger’ boom, construction employment in Ireland was 274,000. By 2013 employment in the industry had fallen to less than 100,000 before rising somewhat recently.  Using QNHS data, we show that there are now nearly as many ‘self-employed with no employees’ (termed here ‘solo self-employed’) workers in the industry as at the peak of the bubble.  These are overwhelmingly craft workers.  As of 2015 about 40% of those at work in construction were self-employed, and crucially over a quarter of all at work are now solo self-employed.

Using interview data we argue that a growing proportion of this solo self-employment is in fact constrained self-employment.  At its simplest, instead of hiring individual workers, firms offer the jobs as individual contracts.  The worker has magically become an entrepreneur.  Not only does the firm immediately save PRSI contributions, but it also avoids any need to consider issues such as union rates, overtime, holiday pay, pension contributions, etc.  The worker is now a ‘subcontractor’ with no wages, limited employment rights and reduced social insurance rights. 

This change is not necessarily a straightforward change from one employment status to another.  Frequently a worker can work on one site as a sub-contractor, but even in the same day then work on another site as a direct employee.  Shifting and ambiguous employment statuses have a long history in the industry.  Furthermore, working for oneself has also often been an ambition for skilled craftworkers, so that constrained self-employment is not necessarily experienced as such..

The paper argues that these changes are part of a wider process of casualization in the industry.  During the boom product regulation in the industry was reduced but the institutions of employment regulation were largely maintained.  In the crisis however these institutions were undermined or simply abandoned (the end of Registered Employment Agreements, evisceration of NERA, etc.) and union density has fallen.  This de-institutionalisation has removed constraints on employers’ power on the building sites.  Constrained self-employment has been massively facilitated by changes in the taxation system.  The on-line Relevant Contract Tax system allows the employer to simply register potential employees as self-employed; the self-certification that ‘the contract is NOT a labour only contract’ is purely formulaic.

The paper then discusses the broader issues raised by these empirical findings.  Firstly, are these changes simply conjunctural, or do they mark a longer term structural shift?  Secondly, is the growth of self-employment related to specific features of the Irish construction industry (product mix, firm structure)?  Thirdly, what are the prospects for a re-institutionalisation which would restore the primacy of direct employment?

 References

Behling, F. and M. Harvey (2015) The evolution of false self-employment in the British construction industry: a neo-Polanyian account of labour market formation.  Work Employment and Society 29.6: 969-988.

Bögenhold, D. and U. Staber (1991) The Decline and Rise of Self-Employment. Work, Employment and Society 5.1: 223-239.