Large companies have long sought to boost profits by converting their employees into “independent contractors,” allowing them to avoid paying benefits. The rise of the “gig economy” – exemplified by digital platforms such as Uber and Airbnb – has only accelerated this trend. Business leaders like to celebrate the free agent, free market economy as liberating -- the apex of American individualism and entrepreneurialism. But the self-employed are more likely to experience a big loss of income, security and collegiality. There is a reason that this cohort is called “the precariat.”
A new report by Co-operatives UK called “Not Alone: Trade Union and Co-operative Solutions for Self-Employed Workers” offers a thoughtful, rigorous overview of this neglected sector of the economy. Although it focuses on the UK, its findings easily apply internationally, particularly for co-operative and union-based solutions.
The author of the report, Pat Conaty, notes that “self-employment is at a record level” in the UK – some 15% of the workforce – and rising. While some self-employed workers choose this status, a huge number are forced into through layoffs and job restructuring, with all the downward mobility and loss of security implied by them.
Few politicians or economists are honestly addressing the implications. They assume that technological innovation will simply create a new wave of jobs to replace the ones being eliminated, same as it ever was.
The sad truth is that investors and companies benefit greatly from degrading full-time jobs into piecemeal, task-based projects tackled by a growing pool of precarious workers. This situation is only going to become more desperate as artificial intelligence, automation, driverless vehicles and platform economics offshore and de-skill conventional jobs if they don't permanently destroy them.
The “Not Alone” report does not tackle this larger mega-challenge, but it does fill an enormous void by addressing how the precariat might begin to fight back. In many respects, the challenge is about basic survival for the Uber drivers and temp workers, agency staff and solo creatives, who are now forced to fend for themselves. Conaty describes the basic problem:
The self-employed precariat do not enjoy employment rights and protections at work, or any of the implicit services associated with being an employee, such as payroll or workplace insurance – let alone pension or sick pay. In addition, their potential income is indirectly eroded by other costs such as agency fees. They face additional challenges related to being paid on time and the right to a contract. To compound all of this, many self-employed are among the lowest paid workers in the UK.
Not only are many self-employed workers among the lowest paid, they often have careers based on “zero hours contracts” (no guaranteed work or income), part-time work and “portfolios” (multiple temporary or part-time jobs drawing on the same set of skills). All of these developments may serve the interests of capital and companies, but do they really represent “progress” for most solo practitioners?
The report calls for the “cousins of the labor movement” – co-operatives, trade unions and mutual organizations – to come together, as they did in another era of history, to help form new institutions to help the precariat.
In the US, one such advocate for the self-employed is the Freelancers Union, which seeks to “connect freelancers to group-rate benefits, resources, community, and political action to improve their lives – and their bottom lines.” The Freelancers Union is not a trade union or co-operative, but it does provide health, dental and other benefits to its 280,000 members.
In Belgium, a co-operative known as SMart provides invoicing and debt collection services for its 60,000 members who work in commercial art and design. SMart functions as a kind of modern-day guild, helping members avoid the burden of setting up a company and providing small loans, training services, legal advice and shared workspaces.
General trade unions in the Netherlands and Spain represent self-employed workers and provide services. In India, there is a Self-Employed Women’s Association that acts as a service co-operative for its 1.7 million members, providing “micro-insurance” and advocating for workers’ rights.
One of the more innovative mutual aid models is the “bread fund.” It’s a new type of organization first developed in the Netherlands that provides sick pay to the self-employed. Each bread fund has between 20 and 50 self-employed members who put aside money every month into their individual bread fund account. The money remains theirs, but is used to support them and other members if they become sick. No bread fund may have more than 50 members. In the Netherlands, there are currently 170 bread funds in 88 towns and cities, with more than 7,000 participating members.
The report describes a large array of other self-help, co-operative solutions. They include mutual guarantee societies (co-operative societies of small businesses that guarantee each other’s loans), credit unions for the self-employed, and co-operative money and credit.
The report also discusses ways in which the government can help legally protect marginal survival activities – often known as the “informal economy” – and integrate them into the mainstream economy. An entire section of the report deals with co-operatives in digital sectors, “social care” and the “solidarity economy.”
As far as general strategies for helping the self-employed, Conaty recommends four priority goals (my paraphrasing here):
1) Recognize this growing workforce by developing organizing strategies for them;
2) Focus on providing mutualized services to workers in creative industries, care services and the green economy;
3) Represent the interests of self-employed workers in national policymaking; and
4) Help develop regulatory solutions to enable collaboration among self-employed workers with respect to mutual guarantee societies and worker benefits.
There is much to digest in “Not Alone,” and many creative challenges to be met. This report illuminates this poorly understood landscape with insightful analyses, useful detail and lessons from the history of co-operatives and mutual aid.
Recent comments