Both off-line and online ‘on demand’ work is escalating – including a 10-fold increase in zero-hours contract work since 2006. There are 4.8 million self-employed (15 per cent of the workforce). Self-employment is also a pre-condition for gig economy jobs. Not surprisingly the growth of freelancing has expanded in a decade by over 1 million and two in three new jobs in the UK are being created by the self-employed. Jobs with limited rights are becoming the new normal.

The brave new world of on-demand work operates with no guaranteed hours, workplace or rates of pay and with risks and costs shifted from capital to labour. The median income for freelance workers and those on zero-hour contracts is 40 percent below the median of those in traditional employment. 77 per cent of the self-employed are in poverty with 1.7 million earning less than the national minimum wage.

As an expanding army of labour the self-employed will surpass the number of public sector workers during 2018. Crowd-sourced labour corporations are spreading to all services sectors, including: Deliveroo, Hermes and CitySprint for deliveries; MyBuilder and Handy for repairs, cleaning and gardening; TaskRabbit for odd jobs; Clickworker for office work; TeacherIn for supply teachers; SuperCarers for social care; and UpWork for higher skilled freelancers.

The profitability of the gig economy model is intrinsic to a design that saves 30% on labour cost overheads plus further savings on equipment, debt collection and insurance. Double standards are evident. Deliveroo in Germany and the Netherlands employs its riders and provides tools of the trade while UK riders have no such protection, provide their own bikes and are charged £150 for the company kit. Legal cases by UK trade unions challenging false self-employment by Uber, Deliveroo, CitySprint and others have secured ‘worker rights’ (including the minimum wage, holiday pay and sickness benefits) but the court decisions are subject to appeal.

Disruptive technology is ‘hollowing out’ corporations by eradicating conventional jobs and substituting casualised ones. Consequently the squeeze on real wages is greater today than any time since 1850. Between 2009 and 2015 the labour share of national income fell from 57 to 53 percent with a corresponding 4 percent increase to capital.

The mutual aid pushback historically by trade unions and co-ops against the unrestrained free market in the 1840s led to social justice solutions. A similar push back is kicking off today. Key innovations profiled include:

1. Freelance co-operatives have emerged in Europe in trades where self-employment is the norm. A good example is the network of 30 local actors co-ops in England and Wales. They collectively negotiate, manage and renew work contracts. Moreover they provide services complementary to the trade union bargaining services of Equity for the same members. Similarly there are 9 local Musicians co-ops in England and Wales that work collaboratively with the Musicians Union. A new co-op for educational psychologists has been set up backed by their trade union. There is enormous scope for more joint trade union and co-op partnerships like these and especially with the current growth in new freelance co-ops in the UK for tech workers, filmmakers, translators, interpreters, bakers and in many creative industries.

2. Business and employment co-operatives developed in France and Belgium during the 1990s. They provide a wide range of services that secure ‘worker rights’. Smart in Belgium with over 70,000 members is a good example. It handles for freelance members their invoicing and debt collection in ways that smooths out cash flow through guaranteed payment within seven days. Smart secures decent work by providing workspace, ongoing vocational education, equipment rentals and by managing social security arrangements to access benefit entitlements. Indycube a co-operative provider of workspace with more than 30 locations in England and Wales has formed a partnership with Community Union to develop a Smart solution for the UK. Smart co-ops have already been developed in seven other EU countries.

3. Social co-operatives developed first in Italy from the 1970s and operate in the fields of social care, community and public health, education and in the creation of employment for disadvantaged groups. In Italy they are supported by a national trade union agreement and provide services for over 5 million people with an annual turnover of more than €9 billion. The model has been developed in Canada, Japan, France, Spain, Portugal and other EU countries. There are a growing number of social co-operatives in England and Wales including Cartrefi Cymru Co-operative, Community Lives Consortium, the Foster Care Co-operative and CASA.

4. Union Co-op platforms are an emerging strategy aimed at advancing worker ownership and control in service industries. For example, the SEIU public services union in the USA is developing apps and a platform for community nurses and childminders. The CWA union in the USA, for example, has assisted taxi drivers in Denver to set up Union Taxi and Green Taxi co-ops and to become highly successful with their own apps. There is trade union support in the UK for developing apps with the highly successful Taxi co-ops (City Cabs and Central Taxis) in Edinburgh being a good example of partnership with Unite to negotiate rates and license conditions.

Supportive public policy and legislation is crucial for a transformative difference. The USA and the UK have weakly developed workplace co-operatives with less than 500 in each country. Italy by contrast has more than 24,000 worker co-ops and social co-ops that have created more than 827,000 jobs. This transformation was propelled both by legislation in 1985 (for worker co-ops) and 1991 (for social co-ops) and by public-co-op partnerships with local authorities. Italy has also pioneered innovations in co-operative capital funds and mutual guarantee societies that together make low-cost development equity and working capital readily accessible for workplace co-op development.

For a democratic sharing economy that is equitable for both workers and service users, a similar public policy framework is needed in the UK as well as an eco-system of local support including technical assistance, advice and co-operative finance tools. Our report shows how to connect these ways and means and highlights examples of emerging local authority strategic support for economic democracy solutions from New York to Bologna that should be pursued here.

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Roelants’ appointment is good news as he has led work to help reform laws in Europe to expand workplace economic democracy and he has also promoted efforts to develop specific social and solidarity economy laws in European countries.

The work of CICOPA internationally has been important as low paid precarious work globally has expanded since 2000, while over this period inequality has escalated. In 2013 Roelants and Claudia Sanchez Bajo co-authored the book Capital and the Debt Trap – Learning from Co-operatives in the Global Crisis. Their analysis showed that co-operatives have been effective in creating new jobs since 2008. Moreover, their impact helps reduce inequality while providing more secure and stable employment. However, they show that supportive public policy is crucial to the scope for co-operatives to be given adequate development space. For example, thanks to support legislation passed some 30 years ago, Italy has over 20,000 worker and social co-operatives and in the non-public care sector, social co-operatives are the largest provider. This contrasts with the UK where 8 in 10 jobs in care services are provided by the private sector.

Roelants has been a champion of the International Labour Organisation’s Recommendation 193, that the Co-operative College played a key role in researching and evidencing. Passed in 2002, this Recommendation promotes co-operatives as best practice and demonstrates that they are a highly effective way to move precarious workers from informal to formal employment, where they offer secure decent work, workers’ rights, legal protection and solutions to poverty.

In research and policy reports since 2002 for CECOP and for CICOPA internationally Roelants has championed the SSE which has become an integral part of the UN local development agenda since 2013. A recent Joseph Rowntree Foundation (JRF) report on inclusive growth has shown that the development of the social economy is crucial to tackling inequality, the housing crisis, climate change and the needs of marginalised groups. Employment in the social economy accounts for 6.5% of European jobs. In the UK employment level is below this average at 5.6%. Sweden, Italy, France, Belgium and the Netherlands have much higher ratios ranging from 9% to 11.2% and have benefited from supportive public policy.

The JRF findings shows that the SSE is a key provider of affordable childcare, housing and transport and enables local people to take part in economic decision-making. The social economy also builds social capital and generates community well-being. However the JRF research also show that in the UK the social economy is not being championed by influential actors, is poorly understood and inadequately supported by local government. The social economy is also wrongly perceived as primarily an answer for market failure and thus not supported well by procurement policies and other pillars for growth. Moreover as JRF shows, the expansion of the social economy is restricted in the UK by inadequate infrastructure. JRF highlights this by showing that where these weaknesses have been overcome in cities like Barcelona, Montreal, Lille and Gothenburg, the social and solidarity economy is much stronger, is growing and gaining in self-confidence and public awareness. The appointment of Roelants augurs well and should help advance co-operative development by deepening solidarity economy understanding.

Originally Published in SolidarityEconomy.coop

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Our aim in this report is to explore how trade unions and co‐operatives can work together to challenge precarity and secure decent work.

The world of work in the 21st century has a markedly different pattern from that of the 20th century. The two‐tiered structure that has emerged since 2007 out of austerity and automation has been well described as an hour‐glass.

In the top half there is a shrinking traditional workforce with standard 40 hour contracts, residual pensions and full employment rights and below, lies what Martin Smith of the GMB described as:

….a second growing group where technology creates an on demand working culture dominated by their smart phone of precarious work, low paid, zero hours, tiny hours, agency, self‐employed jobs.

The aim of this report is to describe more clearly the plight of the growing precariat and to identify and capture examples of best practice where unions and co‐ operatives are working together to challenge the erosion of political, social, economic and cultural rights.

Guy Standing and his work on A Precariat Charter describes why a loss of ‘social income’ won by trade union struggles over decades characterises most clearly the plight of the precariat in the 21st century: their conversion from full citizens into denizens with curtailed rights.

The precariat lacks access to non‐wage perks such as paid vacations, medical leave, company pensions and so on. It also lacks rights‐based state benefits, linked to legal entitlements, leaving it dependent on discretionary insecure benefits, if any. And it lacks access to community benefits, in the form of a strong commons (public services and amenities).

GMB commissioned research that interviewed precarious workers and found:

 Unions remain deeply supported and identified as being on their side.

 Traditional forms of collective bargaining are largely seen as inaccessible within a realistic timeframe of an organising campaign.

 Union approaches are best focused around meeting their needs.

 Union messaging that works best include: ‘Britain needs a pay rise’, ’Work you can build a life on’, and ‘Fair treatment at work.’

For this report we have surveyed and interviewed numerous officers and members of UK and other trade unions abroad as well as those working in co‐operatives. A consultation day was held in Manchester and four case studies have been put together in the next four sections to highlight innovative practices.  Though it is early days, these organising strategies are either emerging in the UK or, with focused support from the trade union or co‐operative movements, could emerge and be embedded.

The report illustrates each organising strategy and draws together broader and crosscutting findings and recommendations.

Read the report here

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About the event

The 2017 Albert Medal is awarded posthumously to Robin Murray for pioneering work in social innovation.

As an industrial and environmental economist, Murray was active and influential across several fields, from cooperatives to energy system innovation. He was deeply committed to a democratic, creative and collaborative response to economic and technological change and developed pioneering economic programmes in local, regional and national governments.

In this Albert Medal event, we will hear from close collaborators Geoff Mulgan, Hilary Cottam and Ed Mayo who will offer insights into Murray’s work, and explore how it has inspired and informed a wide range of policy debate and development around the social innovation movement.

The Albert Medal is awarded for innovation in the fields of creativity, commerce and social improvement. This year’s event is organised with Nesta.

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Unlike conventional approaches to local economic development, which centre on economic growth and are led from the top down, community economic development (CED) is a process that is led by local residents and focuses on generating wealth and jobs that stay local.

This two year programme, led by Co-operatives UK, supported 71 communities across England to develop and implement plans to shape their local economy.

The report finds that CED is a way to give people real power in the local area and interest in the approach is growing in the context of calls for more ‘control’ in local areas and the reduction in inequality. It also highlights that the most effective approaches to CED focus the community’s energies on taking control of a particular asset or building on existing local plans to transform processes not previously working for the local community.

However, it also concludes with three challenges that need to be addressed to make CED more effective on implementation.

• CED plans do not always align with conventional measures of economic development.  For them to cut- through a shift is needed in what is measured, from single growth measures to wider well-being and local wealth.
• CED plans can be overlooked. They should be embedded within wider policy processes like Neighbourhood Planning and LEP planning, and could be given a statutory footing, to ensure it has legitimacy with stakeholders who held power or mandate.
• CED plans take time. It is important that there is sufficient time and resources in place to develop and implement CED plans

The community economic development programme was funded by the Department for Communities and Local Government, and delivered in partnership with Locality, New Economics Foundation, CLES and Responsible Finance.

Reposted from Co-operatives’s UK website.

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For more on money creation we recommend the Commons Strategies Group report on Democratic Money and Capital for the Commons.

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The gig economy

The ‘gig economy’ has become ubiquitous. Casual work, temping, zero-hour contracts and diverse forms of self-employment are characteristic of an expanding marketplace of atypical, precarious and increasingly unprotected work.

Under EU regulations temporary and agency staff are entitled as ‘workers’ to sickness and holiday pay, but this is not the case for self-employed freelancers. In the UK today, 4.6 million people are self-employed (15% of the workforce) and they have generated two-thirds of new jobs since 2008.

While a proportion of the self-employed do well financially, they are today the exception. Indeed the stereotype of the self-employed as small businesses is less true than ever before. 83% of the UK self-employed work alone and 70% are living in poverty. Their median annual income has plummeted by a third from £15,000 in 2008 to about £10,000 today (or €12,000). This is below the level when income tax is payable. Low pay however is only part of the picture — an absence of worker rights, as GMB’s recent case against Uber showed, and a lack of support services aggravates hardship and makes matters far worse. Without a regular salary, housing access is limited and rents are often extortionate.

By 2018 more people in the UK will be in self-employment than in public sector jobs. Labour market expert Ursula Huws estimates that up to 5 million people in the UK are currently being paid for work through online platforms. This is rapidly transforming the future of work.

Digital corporations operate to extract value at commission rates of 20% or more via a ‘black box’ system that blocks any direct relationships between producers and consumers. Decision making in respect to pricing and policies are not co-determined and profits are exclusively generated for the platform owners. Command and control is the old name of this new money making game.

The trades impacted are online and off. Alongside Uber, there is a plethora of online labour-sourcing corporations: Deliveroo for takeaway food delivery, Taskrabbit for small jobs, Handy for residential cleaning, Clickworker for “surveys, data management, etc”, MyBuilder for household repairs and improvements, Helpling for domestic help on demand, Axiom for tech-assisted legal services, SuperCarer for social care and Upwork for higher skilled freelancers.

So how can self-employed workers collectively overcome lop-sided risks, heavy overhead costs and secure fair trade terms and protective conditions? This is the question I have been investigating in Not Alone, a piece of research I have co-led for Co-operatives UK and the Wales Co-operative Centre.

A democratic economy

Trade union services for self-employed workers in Europe are both limited and patchy. Organising has been most successful in areas of the digital economy and particularly in the media, the arts and creative industries. This is the case in the UK, Denmark, the Netherlands and Germany. A typical package of trade union services for freelancer workers includes advice, advocacy, legal guidance on contracts, insurance provision, help with debt collection and training.

The Federation of Entertainment Unions is the UK network of trade unions in media and covering journalists, film technicians, actors, musicians, writers, etc. A common union strategy is to secure ‘worker status’ for freelance members and then to negotiate worker rights.

If backed by a trade union, co-operatively owned employment agencies can provide the operational means to achieve this. One example is music supply teachers who, facing rising agency fees in England, formed worker co-ops to market to schools, to handle negotiations and to provide other collective services. The Musicians Union and Co-operatives UK jointly promoted this successful strategy through an organisers’ handbook and more worker co-ops are forming.

Swindon Music Co-operative: a co-op of 50 self-employed teachers creating security for themselves by working together. Image courtesy of Co-operatives UK.

Union co-ops

Crucially, we are seeing union co-ops beating the opposition at its own game. Green Taxis co-op in Denver has expanded its membership in partnership with the Communication Workers of America. This union co-op strategy has led to the development of a highly efficient mobile app. Through the partnership Green Taxis has grown to 800 members, secured 37% of the market in Denver and has rapidly become the largest taxi co-op in the US.

Before Green Taxis was founded as a worker co-op in 2012, most drivers were working for private taxi corporations and paying leasing and other fees to the company of $800 to $1,200 a week. With the help of the trade union, Green Taxi members have co-financed their mobile app and now pay just $80 a week for back office and dispatch services. This represents a 90% plus savings of economic rent otherwise payable to a private corporation.

The success of Green Taxis highlights how worker-owned platforms can be replicated in other cities and for other trades. It is early days but similar union co-op apps for childcare are being jointly developed in Chicago by the ICA Group and Service Employees International Union. A new union co-op app for NursesCan, a home health care service, was launched in south Los Angeles this year.

There is a strategic opportunity to advance the potential for a breakaway play by co-developing union co-op solutions. The ‘cousins’ of the labour movement — trade unions and co-operatives — need to unite their efforts across Europe to unleash economic democracy innovation.

Originally published at Open Democracy.

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Self-employment has become the new yeast in the UK economy dough. 4.6 million today are self-employed (15% of the workforce) and since 2008 they have created two-thirds of new jobs. The record rise of self-employment is unprecedented. By 2018 it is expected that more people will be in self-employment than in public sector jobs.

While a proportion of the self-employed do well financially, they are today the exception. Indeed the stereotype of the self-employed as small businesses is less true than ever before. 83% of the UK self-employed work alone. Average earnings are far too low to employ anyone else. The median annual income of the self-employed plummeted from £15,000 in 2008 to £10,400 in 2013. Low pay however is only part of the picture. An absence of worker rights and support services aggravates hardship and makes matters worse.

Under European Union regulations temporary and agency staff are entitled as ‘workers’ to sickness and holiday pay. This is not the case for self-employed as the Not Alone report highlights. They also have to put in days of work unpaid for bidding, negotiating contracts, tax and national insurance administration, billing, accounts management and debt collection.

How can self-employed workers overcome lop-sided risks, over-bearing costs and additionally secure fair trade terms and conditions? To avoid ‘walking alone’, some freelancers are rediscovering solidarity, co-operation and the logic of mutual aid. Trade unions in the media sector in Germany, Scandinavia and the UK have been demonstrating ways to do this.

The Federation of Entertainment Unions (FEU) is the UK network of trade unions in media. Members include the National Union of Journalists (NUJ), BECTU, Equity and the Musicians Union; all have a high proportion of self-employed members. A common FEU strategy is to secure ‘worker status’ for their freelance members and then to negotiate worker rights.

Co-operatively owned employment agencies can provide the operational means to achieve this outcome and especially if backed by a trade union. For example, faced by rising agency fees, 50 music teachers in Swindon formed a co-op to market their services to schools, to assist with negotiations and to provide other collective services. The Musicians Union and Co-operatives UK  have jointly promoted this strategy and music supply teachers in many other regions have done the same. Likewise Actors Co-ops have steadily expanded to 30 in England and Wales. The co-ops work closely as a network with Equity, the actor’s union.

Co-operatives UK supported RICOL, a co-operative agency for interpreters and translators, that was set up in 2012 after the interpreting service for the law courts was contracted out to Capita who reduced the terms and conditions on offer.

Co-operative innovators in France and Belgium have developed integrated services for self-employed workers in relation to affordable workspace, back office services, debt collection, low-cost insurance and for securing sickness and benefit payments from the state. These Business and Employment Co-operatives (BECs) pioneers include the CAE network in France with 72 local co-operatives and Smart in Belgium – a co-operative with over 60,000 members.

In the USA, new Union Co-ops are emerging. Under a joint agreement, the US Steelworkers, the largest union in the USA, and the successful Mondragon Co-operatives from Spain are co-developing the model. Union Co-ops are being set up in a range of industries and cities from Pittsburg to Los Angeles. In Cincinnati, Ohio, there are seven Union Co-ops including a food hub, a railway manufacturer, a ‘green laundry’ and a jewellery manufacturer.

The Freelancers Union in the USA has developed as a mutual to provide insurance and other legal and advocacy services for more than 280,000 members. In the Netherlands and in Spain, general unions for the self-employed have emerged and developed since the 1990s.

To help secure rights for self-employed workers, the International Confederation of Free Trade Unions, the ILO and the International Co-operative Alliance have developed an organisers’ handbook. Solidarity economy strategies are growing but are still fragmented. Bringing together best practice internationally could trigger a new game plan that might snowball by bringing together solidarity solutions. The trade union and co-operative movements need to unite to make this happen.

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