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Tackling Concerns of Independent Workers

REPOST ARTICLE SOURCE:

http://www.nytimes.com/2013/03/24/business/freelancers-union-tackles-concerns-of-independent-workers.html?_r=1&

24-FREELANCE-articleLarge-v2SOON after landing a job at a Manhattan law firm nearly 20 years ago, Sara Horowitz was shocked to discover that it planned to treat her not as an employee, but as an independent contractor.

“I saw right away that something wasn’t kosher,” Ms. Horowitz recalls. Her status meant no health coverage, no pension plan, no paid vacation — nothing but a paycheck. She realized that she was part of a trend in whichAmerican employers relied increasingly on independent contractors, temporary workers, contract employees and freelancers to cut costs. Somewhat bewildered, somewhat angry, she and two other young lawyers who were also hired as independent contractors jokingly formed what they called the “Transient Workers Union,” with the facetious motto, “The union makes us not so weak.”

Ms. Horowitz’s grandfather was a vice president of the International Ladies’ Garment Workers’ Union, and her father was a labor lawyer. So it was perhaps not surprising that she responded to her rising outrage by deciding to organize a union. What she organized, however, was a newfangled version. The Freelancers Union, with its oxymoronic name, is a motley collection of workers in the fast-evolving freelance economy — whether lawyers, software developers, graphic artists, accountants, consultants, nannies, writers, editors, Web site designers or sellers on Etsy.

Today, the Freelancers Union is one of the nation’s fastest-growing labor organizations, with more than 200,000 members, over half of them in New York State. Ms. Horowitz, who has never lacked audacity, says she expects to expand the organization to one million members within three years. For some perspective, the United Automobile Workers union currently has 380,000 members. Of course, while hundreds of thousands of auto jobs have disappeared, the country is awash in freelancers and other independent workers. Studies by the Bureau of Labor Statistics and the Government Accountability Office show that there are more than 20 million of them. Many companies, including The New York Times, employ these workers.

The Freelancers Union, which is based in Brooklyn, doesn’t bargain with employers, but it does address what is by far these workers’ No. 1 concern, by providing them with affordable health insurance. Its health insurance company covers 23,000 workers in New York State and has $105 million in annual revenue. Impressed by that success, the Obama administration recently awarded Ms. Horowitz’s group $340 million in low-interest loans to establish cooperatives in New York, New Jersey and Oregon that will provide health coverage to freelancers and tens of thousands of other workers.

Having health insurance makes it far easier to be a part of what Ms. Horowitz calls the “gig economy.” But many freelancers would prefer not to participate in that economy at all. They would rather have regular jobs, but companies will often hire them only as independent contractors. Companies find these workers less painful to dismiss and generally less costly because they rarely receive severance pay or benefits like health insurance or paid vacations.

“There are some freelancers for whom this is great — they love the flexibility,” Ms. Horowitz said. “And there are some freelancers for whom this is the worst thing in the world.”

While being an independent worker allows certain advantages — you can go to yoga class or on vacation whenever you want — it also means economic vulnerability. An internal Freelancers Union survey found that 58 percent of the group’s members earn less than $50,000 a year from freelancing and that 29 percent earn less than $25,000. The surveyalso found that 12 percent of members, many of them college graduates in their 30s and 40s, received food stamps during the recession.

“In today’s economy, there’s a huge chunk of the middle class that’s being pushed down into the working class and working poor,” Ms. Horowitz says, “and freelancers are the first group that’s happening to.”

Historically, through the power of collective bargaining, labor unions helped reverse that equation, enabling many unskilled workers to earn middle-class incomes. But astraditional labor unions have steadily declined in size and power, groups like the Freelancers Union, the New York Taxi Workers Alliance and Domestic Workers United have stepped up, trying to give collective voice and power to often-marginalized workers.

Some union old-timers argue that the Freelancers Union is more like an association than a union and will not be able to achieve truly significant gains for workers. Its members don’t pay union dues, which means that joining requires no sacrifice, and the Freelancers Union doesn’t negotiate contracts with employers or represent freelancers when they have grievances. (Under the National Labor Relations Act, freelancers are considered independent contractors, not employees, and employers thus have no obligation to bargain with them, even when they form a union.)

Ms. Horowitz, 50 and a Brooklyn native, insists that her organization is indeed a labor union because, like other unions, it is a large, influential, self-supporting organization of workers that pushes to advance their interests, although its members work for numerous employers in many industries.

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