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Freelancers Union reflects new reality for 42M US workers

Wed, May 8, 2013

Inspired by the Haymarket Riot in Chicago in early May 1886, the first officially commemorated International Workers’ Day, celebrated on May 1, 1891, found the United States experiencing tremendous economic growth on its way to becoming an industrial giant. At the time, craft unions represented the predominant form of US trade unionism with primarily skilled workers engaged in collective bargaining. By May 1, 1940, industrial unions had brought representation to unskilled and semiskilled workers in the US mass production industries with more than one million members affiliated to these newly-created organizations.

Things are dramatically different on International Workers’ Day 2013. Union density has drastically declined since its 1955 peak with the nation’s labor force having undergone major structural changes during the past few decades. Combined with a massive shift from manufacturing to service industries by the early 21st century, there also has been a concomitant shift from full-time employees to independent workers. Defined as temporary workers, independent contractors, consultants, part-timers and self-employed entrepreneurs, these 42 million independent workers comprise approximately one-third of the US work force. Such work arrangements have become increasingly common in a global, mobile economy geared towards employers retaining their competitiveness. Lacking the legal protections and benefits guaranteed to full-time employees, the Freelancers Union (FU), a rapidly growing labor organization with a membership exceeding 200,000, seeks to provide independent workers with things that many full-time employees often take for granted.

While some believe that millennial generation employees desire independent work because they want to be their own bosses and have flexible work schedules, independent workers, nevertheless, face many problems. Based on a survey of 3,000 independent workers conducted by the FU in 2009, the union discovered that 81 percent of independent workers lacked enough work that year, 49 percent did not have work over extended periods and 32 percent had times where they desired more work. Additionally, 40 percent experienced trouble in obtaining wages owed them in 2009 with the average independent worker being unable to recoup $6,000. Finally, 47 percent reported that their major concern was the inability to afford health insurance with 18 percent having to give up this insurance in 2009.

Sara Horowitz, a former labor lawyer whose father also was a labor law attorney and whose grandfather had been an International Ladies’ Garment Workers’ Union vice-president, established the FU in 2003. The labor organization restricts its membership to mostly white-collar professions covering “knowledge” workers in industries including media, publishing, design, technology and health care. Men and women are equally likely to join the FU although approximately 55 percent of the organization’s membership is less than 40 years of age.

The FU is dedicated to obtaining unemployment protection for independent workers, to modifying state labor laws so that independent contractors are covered by wage and hour claims systems and to increasing independent workers’ opportunities to obtain affordable and portable benefits. Hoping to achieve these gains through federal and state political action committees, the FU already has been successful in New York City in removing double-taxation for freelancers who are paid less than $100,000 while providing a tax credit for those who make up to $150,000. The organization also has lobbied for independent workers to be able to unite together to purchase health insurance while the group helped write legislation providing temporary workers with wage and hour protections.

One of the FU’s greatest successes has been providing its membership with affordable health insurance. While membership in the organization is free, the FU charges for health insurance which it purchased at group rates from Blue Cross Blue Shield providers until 2009 when it established its own insurance company, the Freelancers Insurance Company, a for-profit subsidiary of the FU which is also entirely owned by the union. Premiums cost from $225 to $603 a month, which according to the union, is 40 percent cheaper than individual plans offered in New York.

But does the FU represent a new model of unionism for knowledge workers in a postindustrial economy? According to Ms. Horowitz, collective bargaining is not a labor union universal but only characterizes a “moment in history.” But since the FU neither has the power to negotiate contracts with employers nor the ability to process grievances, how effective can the union be in defending independent workers’ interests? Since freelancers lack collective bargaining rights guaranteed to other private-sector employees under the National Labor Relations Act, how will the FU be able to influence freelancers’ wages and working conditions? Moreover without the power and the inclination to engage in strikes and employer boycotts, solidarity will never be forged among these independent workers who will continue to deal with their employers only as individuals. This willingness to participate in collective actions is absolutely necessary if the FU hopes to promote a viable postindustrial unionism rather than remaining little more than a mutual aid society geared towards early 21st century independent workers.

By Victor Devinatz
StreetWise Contributor

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