Unions and many others are concerned about the development of “dependent contracting” in New Zealand. It is a form of self-employment in which the worker is virtually tied to one employer/contractor and is an employee in all but name and employment rights. This situation is ripe for exploitation and abuse of the worker. Though it is almost impossible to tell how many workers are in this vulnerable dependent contractor position, it is important to understand how self-employment has changed in New Zealand over recent years.
The biggest group of self-employed covers those who work for themselves with no employees: “own-account workers”. They rose from 9 to 10 percent of employment in the late 1980s to 12-13 percent around the turn of the century, before returning back to 9-10 percent now. They include dependent contractors.
The other big group is the self-employed who employ others (the “self-employed employers”). They rose from around 7 percent of employment in the late 1980s to around 9 percent in the mid-1990s, but then fell to the current all-time low (since 1986) of 3.0 percent.
Finally there is a very small group, “unpaid relatives assisting” who are classified as selfemployed (rather than slaves!) and hover around one percent of total employment.
We focus on the first two groups. The own-account workforce has been ageing. Between 1991 and 2011, the 45-plus age group grew markedly at the expense of the rest.
Between 1978 and 2012 in Agriculture, Forestry and Fishing the paid hours of the selfemployed fell from 59.1 percent of all paid hours in the industry to 44.0 percent. Presumably this is due to the increasing dominance of corporate farming, larger farms and wealthy farmers owning several farms. As a result, Agriculture, Forestry and Fishing fell from 30.1 percent of total hours for the self-employed in the economy in 1996 to 18.6 percent in 2012.
Its biggest single replacement was Professional, Scientific and Technical Services. Construction remains a large contributor to self-employment. But there were also very significant moves over these years from employees to self-employed – mostly own-account workers. These occurred in a number of industries, notably Information, Media, and Telecommunication, Finance and Insurance, Manufacturing, Wholesale trade and Transport.
Each industry has a story to tell. Understanding the underlying contracting and employment relationships is beyond this data, but it does give further insight into the substantial changes in employment relationships that occurred in the last 30 years.
Download the full bulletin: CTU Economic Bulletin 162