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.

Photo by DigitalMajority

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Kevin Stark: SMart is a social enterprise founded in 1998 in Belgium. The project’s aim is to simplify the careers of freelancers in cities across Europe where SMart operates. These days, there are many freelancer services — cooperatives, coworking spaces, unions — but at the time of its inception, SMart officials were focused on one subsection of this workforce: artists. “That’s how we started,” says Lieza Dessein, a project and community manager for SMart. “What we realize is that a lot of artists have the same kind of issues when they are working. For example, a band would make up a contract. The band would actually pay the musicians with that single contract. And they had very irregular revenues.”

Dessein said the original idea was to take all the bookkeeping and other administrative tasks off of the artist. “The solution that they came up with was, OK we will just make up a company,” she said. “So instead of every artist needing to develop its own legal entity to be able to work, we will just share a company with the artists.”

Today, setting-up a coworking platform is not uncommon, but at the time it was a bold idea. Over the years, SMart expanded to provide services for many other types of freelancers, and changed with the evolving nature of work. Dessein spoke with us about the evolution of the project.

Kevin Stark, Shareable: I’m a freelancer in Chicago, and to my knowledge, we don’t have an organization that is as comprehensive as SMart. If I were moving to Brussels, how would you pitch me on the program? 

Lieza Dessein, SMart EU: We are a shared company. It’s quite important for us. We have over 90,000 members here in Belgium alone. And active members on a yearly basis, we are around 20,000. Active members are members who log in between one and three times a year. All of that together in 2016, they billed to our company in Belgium 136 million euros. We’re operating in nine European countries.

The development of the project in European countries is quite different from country to country. They’re not all that far developed as Belgium. Belgium is the mother house. For 20 years, we’ve had a full range of services. Our business model is a patient one. We grow steadily and smoothly and build up the community inside each country. We make sure that everything we are doing is under a legal frame that exists in that country, and we need also to adapt it to the culture in each country and in the communities. I would say, we haven’t changed all that much but we have shifted with the realization that the work environment has changed.

I love the lifestyle associated with freelancing and the freedom to work on a wide range of projects. The only rub for me is the stability and the lack of community. What’s different about SMart?  

We have a whole range of services, and the most important one is that people who work with us to guarantee that they will be paid in seven days after the end of a contract — even if the client hasn’t paid yet. We have a mutualized salary guarantee fund, and we take care of the debt collection for the freelancers as well. We share the company with our freelancers. We become the employer of all our freelancers and take on the responsibility linked to the employer status. The reason why we decided to become the employer of the freelancers is that for the moment it’s very difficult for freelancers to access social protection and the best social protection you can get is linked to the employment contract. And, if we manage to put everybody on the employment contract they have easier access to social protection as well.

How has the project evolved over time?

Smart means Societe Mutuelle pour ARTistes (mutualized company for artists). It was a company that aimed to take over the administrative burden linked to artistic entrepreneurship. Little by little we developed a tool that could cover a wider range of professions and we opened up to all freelancers. It’s an evolution that little by little you realize that you have a tool that can serve a whole new community that you weren’t planning to serve. There was this shift to make in the mind. We were saying, “Is it actually possible?” Because it’s a little bit frightening to say. I’m focused on musician, artist people in the theater. And it’s like you can have a grasp of that reality, and suddenly you get people working in the care service — everything that’s related to massage, yoga. We have I.T. consultants, and you get all those different professions. For the advisors, it could be overwhelming. We really rationalized: What are the needs of that community as a whole? What are the needs? They are the same as the freelancers. Along with shifting our mindset, we also strengthened our team with advisors coming from a wide range of different professions to make sure we have people who have a good grasp on particular professions.

What were some of those needs?

Our members have an irregular income, multiple clients, being an employee and then becoming an employer, develop different skills and jobs. We have a very fractured job environment where they will work a lot during the year and then not always in the summer. If you really take the whole community and say what are the needs? Instead of focusing on the differences — they need this, and they need that. At one point to say, where are the similarities? If you look at not from the perspective of differences but on a perspective of similarities. We needed to open up our services. Because freelancers — and artists — are evolving in complex legal issues, are confronted to a lot of administration and the risks involved in individual entrepreneurship are high.

SMart was evolving with the changing nature of work?

The workforce is more and more scattered and individualized. And you have all those individual entrepreneurs and the old school way of doing things is to say: I’m an individual entrepreneur,so I will set up my own legal entity. I will go for my own little office somewhere lost in city.

If you scale that model you can see that you are facing very isolated society where every individual is on their own and facing the same kind of difficulties. How do I set-up a company? How do I make myself known? How do I meet fellow people that are working in the same field? How do I find clients? Suddenly if we say, let us take over the administration, and then if you need training we have training sessions. And for the moment we are also investing in work spaces. We are really looking into different ways of bringing back [collectivism] among that scattered workforce. How do you reinvent solidarity amongst individual entrepreneurs? How do you make people create a community that eases their entrepreneurship? How do we reinvent the social protection for all workers?

Images: SMart’s website

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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.

Cross-posted from Bollier.org

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Self employment levels used to be a measure of how underdeveloped an economy was. Now, in the form of the ‘gig economy’, it has become something that is celebrated across developed countries.

In the US, new figures suggest that all net employment growth since 2005 is down to alternative work arrangements such as self employment. The reality is that we are seeing a new system of work evolve, enabled in part by new technology platforms, with its own political economy of risk and reward and just as previous eras saw the emergence of trade unions and co-operatives as a self-organising response, so the same is needed again today.

Here in the UK we are starting a new tax year. Fresh evidence shows that more than a quarter of the UK workforce is self-employed, and this figure is set to increase. This ongoing rise in the number of freelancers signals a fundamental shift in the nature of work.

Some, driven by the lure of freedom, are choosing to go self-employed; many others are going freelance out of necessity. Changes to the labour market mean that zero hours contracts, part time work and ‘portfolio’ careers are becoming more and more the norm.

Our new report, Not Alone, looks at recent trends in self-employment, both here in the UK and across the world. What we are seeing is more and more freelancers coming together and forming co-operatives in order to create security and cut costs for themselves. The co-ops are allowing people to work for themselves whilst sharing costs with others – whether that’s the cost of marketing products, workspace or back office services.

Take RICOL, a new interpreters’ co-op in London. The service for interpreters in London was shaken up in 2011 when the government moved from a national register of public service interpreters to a contract for all of England and Wales from a single provider, won by Applied Language Solutions, owned by Capita. To deliver on the contract, the firm then offered court interpreters work at what was in effect between 25% and 40% of the established rate.

There was a mass refusal to sign up and a protest group was launched, Interpreters for Justice. Many new interpreters hired by ALS were poorly qualified. Severe delays and chaos in the courts were widely reported in the press.

With help from Co-operatives UK, RICOL was established in November 2012 as a London-based interpreters and translators co-operative. They are now generating new work and contracts with law firms, commercial companies, human rights organisations and media companies.

It is early days for co-ops like these in the UK, but there are inspiring examples from overseas to learn from, such as the Self Employed Women’s Association in India, a trade union and co-operative network giving voice and opportunity to 1.7 million members.

As freelancing grows, we need a more systematic approach to supporting them. Not alone concludes with four recommendations centred on, on the one hand, trade unions and co-ops making a radical shift and working together to support self-employed people and, on the other, developing representation and legislation for self-employed people in government.

Ed Mayo is Secretary General of Co-operatives UK, the network for Britain’s thousands of co-operative businesses. The report can be downloaded from www.uk.coop/notalone.

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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.

Photo by blakespot

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“Working alone can be aspirational, but it can also be lonely and anxious. There is an extraordinary opportunity for new co-operative solutions for self-employed people, giving them the freedom of freelancing with the muscle of mutuality.”

Cooperatives UK have just released an in depth report full of examples of best practices for co-operatives collaborating to meet the needs of a growing class of dispossessed workers – over 70% of whom in the UK are in poverty. We will cover various aspects of the report in the following days and you can also read the full report here.

The new tax year, starting on 6 April (2016) will see record numbers of self?employed workers, according to new data published by Co-operatives UK.

The Not Alone report tracks current levels of self-employment and the ways in which co-ops can help freelancers meet shared needs. Key findings are:

• At 15% of the workforce, government statistics show that 4.6 million people are now self-employed – the highest numbers in the UK since records began
• One in four people (27%) of employees in medium-sized firms in the UK would like to work in self-employment (22% in small firms, 14% in the public sector)
• The number of freelancers is likely to grow further over the next year, reflecting a significant change in the pattern of work in the economy

Ed Mayo, Secretary General of Co-operatives UK, said: “More and more people are turning to self-employment, whether out of choice or necessity. Our data shows this is likely to grow, with a significant number of people who are currently in employment interested in going freelance.

“Self-employment offers freedom and, by coming together in co-ops, freelancers can share the risks and responsibility.”

In line with this growth in self-employment, the report identifies examples of freelancers coming together to form co-operatives for shared services, from back-office support, debt management and contract advice to access to finance and sickness insurance and the shared use of equipment and access to workspace.

There are a number of examples across the UK of co-ops of self-employed workers, from 50 music teachers forming a co-operative to market their services to schools, to interpreters laid off by Capita providing interpretation services in judicial courts through a co-op.

“Working as a private peripatetic music teacher can be a very isolating experience. The Music Co-operative enables our members to feel part of something, and to feel connected to other like-minded professionals.” Janet Hodgson, Swindon Music Co-operative 

But the report also identifies considerable scope for the growth of services in the UK, pointing to well-developed approaches overseas. In the USA, the Freelancers Union provides its 280,000 members with advice and insurance. In Belgium, SMart is a co-op offering invoicing and payments for 60,000 freelancer members. In France, new legislation allows self-employed workers to access the sickness pay and benefits of conventional employees through co-operatives.

TUC General Secretary Frances O’Grady said: “This research shows how the world of work is rapidly changing and becoming more precarious.

“While some choose to be self-employed, many people are forced into it.  The lack of stable income and poor job security often associated with self-employment can make it hard for workers to pay their bills and spend quality time with their families.

“That’s why 300,000 self-employed people have joined trade unions in the UK to get better rights at work. Many more could benefit from being part of co-ops and unions, and as a movement we need to reach out to them.”

Pat Conaty, co-author of the report and a freelancer himself, said: “Self?employment is at a record level, but it is not yet at the high water mark. The pressure and the promise that lead people to go freelance will continue to swell the ranks of the self-employed over the coming year.

“Working alone can be aspirational, but it can also be lonely and anxious. There is an extraordinary opportunity for new co-operative solutions for self-employed people, giving them the freedom of freelancing with the muscle of mutuality.”

The Not Alone report has been produced in partnership with Wales Co-operative Centre and Unity Trust Bank. The full report and a summary can be downloaded here.

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