Freelancers of the World, Unite!

Sara Horowitz is trying to reinvent trade unionism for today’s mobile workforce

THE conventional wisdom is that, for better or worse, trade unionism is in
irreversible long-term decline, at least in the world’s leading economies. In
America, for example, only 12.5% of the workforce now belongs to a union and a
mere 7.8% of private-sector workers, down from one-third in 1960. Most forecasts
predict that this trend will continue, perhaps until unionism is confined to
museums and history books. But Sara Horowitz is determined to prove them wrong.
Ms Horowitz is trying to reinvent the trade union to meet the needs of today’s
workers—specifically , the fast-growing army of freelancers who flit from one
employer to another. These workers have largely been ignored by the traditional
trade unions, which are wedded to the shrinking band of workers who expect to
spend the bulk of their careers with one employer, particularly in the public
sector, where over one-third of workers are still unionised. In 2001 Ms Horowitz
launched what is now called the Freelancers Union. Today, with 37,000 members,
it has already become the seventh-largest union in New York state, and could
soon be far bigger. In the next few weeks it will open a branch in Connecticut,
with three more states to follow by next spring. After that it has plans to
expand into the rest of the country, and perhaps even beyond.

The Freelancers Union—with a markedly different business model from traditional
trade unions which does not involve striking—has its roots in a year that Ms
Horowitz spent at Harvard University, a world away from the mines and factory
gates where most earlier advances by the trade-union movement took place. Her
grandfather was vice-president of the International Ladies Garment Workers Union
in New York and her father was a union lawyer, so Ms Horowitz has unionism in
her blood. She took her first job with a union at the age of 18. After attending
law school, she represented union members in a number of lawsuits until a
bizarre dispute over the classification of sous-chefs working in the
rich-patients wing of a hospital convinced her that a radical new approach was
needed.

“I had an epiphany that existing labour laws and regulations didn’t fit the way
people were working,?she says. At Harvard’s Kennedy School, she set about
rethinking unionism from first principles. What do modern workers need? What
gives a union power? She concluded that a union is a means for workers to join
together to solve problems. To be effective it needs an economic model that
makes it independent of government, employers and other institutions. And the
biggest problem for freelancers? The lack of health insurance, which in America
is mostly provided by employers, and only to permanent staff.

Not for nothing has Ms Horowitz been described as the “quintessential example?
of a social entrepreneur— someone who applies the innovative spirit and business
discipline of a Silicon Valley start-up to try to solve society’s thorniest
problems. After Harvard, with seed capital from some charitable foundations, she
started a non-profit organisation in 1995 called Working Today to address the
needs of freelancers, such as affordable health insurance. She quickly rejected
the traditional union model of confrontation and charging membership dues
unrelated to benefits received. Instead, with an un-unionlike enthusiasm for the
discipline of the marketplace, she adopted a customer-centric approach. She
would provide members with a menu of services that they could choose to pay for,
thus generating the funds to spend on the union’s advocacy of
freelance-friendlie r labour laws. (Freelancers in America are generally not
entitled to unemployment insurance, for example, even if a job they have done
for, say, 18 months comes to an end.)

After a couple of false starts, she found a way to use the bulk purchasing power
of her members to drive down health-insurance premiums, ultimately by around
40%. In 2001, Working Today launched the Portable Benefits Network (renamed the
Freelancers Union in 2003) to provide benefits including education and advocacy,
as well as health care, to independent workers in New York’s Silicon Alley
technology district. Now the union’s members—some 13,000 of whom buy its health
care, some of them complaining that it is too basic even as they do so—come from
industries ranging from finance and alternative health to technology and
non-profit organisations. The union has annual revenues of $38m, of which $4m
funds advocacy.

Working today, and tomorrow too
There are more ideas where that came from. Next, Ms Horowitz is exploring how to
provide something like a 401(k) defined-contributio n retirement-savings account
to freelancers. In the summer she launched a website with social-networking
features that works as a sort of MySpace for freelancers. It boasts a directory
that makes it easier for potential employers to find “an acupuncturist, closet
organiser, dog walker or whoever.?

Ms Horowitz’s most ambitious goal is to raise capital to start a new permanent
institution that would provide services such as health care to members. She is
seeking investors who want to make money, but will accept a below-market rate of
return. “I want to create an institution that is around long enough and is
nimble enough to meet the needs of my members in 2020, not just 2006,?she says.
Ironically this progressive idea is inspired, she says, by some past giants of
American trade unionism, above all Sidney Hillman, president of the Amalgamated
Clothing Workers of America, who created lasting institutions such as the
Amalgamated Bank, Amalgamated Life Insurance and Amalgamated Housing. “Compared
with the bosses of the firms they were going up against, the early labour
leaders were the geniuses,?says Ms Horowitz. That is not something anyone would
say of today’s union leaders—with the notable exception, perhaps, of Ms Horowitz
herself.

Taken from Economist Magazine, November 11, 2006 Edition

One response to “Freelancers of the World, Unite!

  1. Pingback: Sektor Media, Anak Bungsu Gerakan Buruh « My Thought, My Activism, My Life, Myself

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