The third report on solutions for the precariat, launched in Cardiff, March 2018
This report calls for the ‘cousins of the labour movement’ – co-operatives, trade unions and mutual organisations – to come together and help to form cohesive institutions to unite the self-employed precariat, as illustrated in the model of a ‘solidarity economy’ partnership. Points made in the summary (with added links) include:
The assumption of a 9 to 5 job has long gone, but as new forms of work create new forms of risk and with no employer necessarily to turn to, there are a range of initiatives emerging which look to technology and self-organisation by workers to get by. Additionally, a diversity of mutual aid solutions is showing the scope to advance worker control.
Many of the self-employed are among the lowest-paid workers in the country; their potential income is eroded by other costs such as agency fees and additional challenges relate to difficulties in not being paid on time and not having the right to a contract.
Historic data suggests that the last decade has seen a greater squeeze on real wages than at any time over the last one hundred and fifty years. The pay of younger workers has fallen at twice the rate of older workers. The share of national income paid to labour has declined. As workplaces change, so trade union membership has declined, weakening an important counterweight to the voice of investors in public life.
Zero-hour contract work over the past decade has increased ten-fold to over 800,000 in the UK. Self-employed forms of work have increased by 1 million to over 4.8 million and at 15% of the workforce is at the highest level in forty years.
With the erosion of the archetype of a five-day week agreed hours job, goes the loss of a wide range of benefits in favour of precarious work with limited rights and imposed flexibility. Not all self-employment is of this form, but what tends to be characteristic of newer self-employed workers and those on zero-hour contracts is low pay, limited legal protection, high insecurity, limited social security access, limited pension entitlement and limited collective representation. Surveys show that casual agency staff and self-employed workers are earning 40% less than an average employee.
Such workers also commonly live in precarious housing with a lack of security of tenure and limited access to personal loans and mortgages. With lack of access to maternity or paternity leave or pay for a growing number of precarious workers, family life and family planning becomes more difficult.
This shift in labour patterns is forecast to expand and be driven by disruptive digital corporations and the wider expansion of the gig economy. Nobody has a precise figure on the size of the UK gig economy but estimates point to at least 4% of the workforce engaged in online platform work and with the numbers of workers ranging from estimates of 1.3 million to 2.5 million. Research has shown that 63% of this workforce want basic employment rights and holiday pay.
These trends in working patterns follow, to an extent, decisions made at a national level by governments on matters such as taxation and employment status. There is a welcome dialogue now open in the UK following the Taylor Review, while the EU has launched a consultation with social partners (governments, employers and trade unions) on rights for self-employed workers.
International research by the International Labour Organisation (ILO) has shown that partnerships between mutual aid groups, co-operatives and trade unions are proven ways to organise self-employed workers and to secure both rights and access to a wide diversity of needed services. ILO recommendations 193 and 204 signed by the UK government support such good practice. Guy Standing, an academic at SOAS, University of London, has called for a Precariat Charter. A universal approach to labour law has also been recommended by many trade unionists and policy experts whereby core labour rights would be an entitlement of all workers regardless of job status. This fundamental reform builds on the Supiot report for the European Commission.
This report is the follow-up to a landmark report on freelancer cooperatives in 2016. The report Not Alone mapped the emergence of self-help and mutual aid across self-employed workers in a wide range of countries, from Belgium to India. In turn, this helped to inspire new co-operatives here, with a key milestone reached with an investment by the trade union community in the cooperative social enterprise, IndyCube.
Eight positive innovations in terms of technology, co-operation and self-organisation by workers in the U.
Drawing on new research and including a close partnership with trade unions in the UK and liaison with practitioners abroad through the international cooperative network CICOPA, this report identifies the eight most positive innovations in terms of technology, co-operation and self-organisation by workers in the UK.
- Freelance co-operatives: There are good models in creative industries that have been pioneered in the UK by actors and musicians. They are supported by the Federation of Entertainment Unions and supported by trade unionists in Equity and the Musicians’ Union. There is untapped potential for a co-operative and trade union movement partnership to spread this best practice to other service sectors and as a means for enabling wider scope for negotiating collective bargaining agreements to secure worker rights.
- Business and employment co-operatives: This is an effective model for supporting freelance workers through an umbrella cooperative that has been developed in France since the 1990s and has spread to a number of EU countries. In Belgium, for example, SMart has shown how digital tools can provide for its freelance co-operative members’ educational and information services. Additionally the means to access a number of worker rights are facilitated by SMart for its members through the handling of social security arrangements, the collection of debts, guaranteed monthly income payments, the provision of insurance, workspace and other services. SMart has developed these multi-stakeholder co-operative solutions beyond Belgium in seven other EU countries and, across Europe, has almost 90,000 members.
- Platform co-operatives: This is a new innovation with huge potential. Support by the CWA union in the USA for taxi drivers in Denver, Colorado has developed mobile apps that have supported the emergence of Green Taxis and Union Taxis as co-operatives and whose members can access trade union services. Taxi co-operatives in Edinburgh provide the majority of citywide services with their apps and TaxiApp in London is a new co-operative of black cab drivers. The SEIU public services union in the USA is developing mobile apps and potential platform co-operative solutions for community nurses and registered child minders. Stocksy United in Canada is a successful platform co-operative for professional photographers.
- Social co-operatives: These co-operatives provide social care, community health and education services widely in Italy and are the leading provider of social care. The innovation has been successfully developed in Quebec, Japan and France and has more recently developed in Spain, Portugal and Greece. In Italy there is a national trade union agreement and collective bargaining agreements are negotiated. In the UK social co-operative development forums have been established in Wales and England and new social co-operatives are emerging. There is wide scope to work with public sector trade unions to develop a partnership model like in Italy.
- Union co-operatives: This is a US model for developing worker and multi-stakeholder co-operatives that are unionised from the outset. The innovation was co-developed by the United Steelworkers and the Mondragon Corporation, based in the Basque region of Spain. The model uniquely brings together worker ownership and worker control with collective bargaining. It is supported by a growing number of trade unions and there are union co-operative initiatives underway in 10 American cities.
- Innovative local authority regulation: Local authorities are impacted adversely by poverty and a lack of social protection faced by precarious workers. They also face difficulties in securing taxes from offshore digital corporations operating out of tax havens. A number of cities are introducing legislation to tackle abuses. Seattle has passed a byelaw to give Uber and Lyft drivers collective bargaining rights. New York City has passed a byelaw entitled Freelancing is Not Free to assist self-employed workers to collect unpaid debts and late payments. Employment tribunals in London have awarded worker rights to Uber and CitySprint workers.
- Municipal ‘commons platforms’ and co-operative capital funds: There is wider scope for local government action. The Sustainable Economies Law Center in the USA and the P2P Foundation in Europe have proposed the development of MuniRide and MuniBnB as ‘commons platforms’ to be co-developed by an alliance of municipalities to better regulate, collect taxes and ensure fair trade practices for workers and service users in the gig economy. In ten US cities, new policies to support the development of worker cooperatives have been adopted and, in some cities, revolving funds have been established to provide co-operative development capital.
- Mutual guarantee societies, public banks and a ‘workers right to buy’: Italy and Spain have supported the development of more than 15,000 worker and social co-operatives in each country compared to only 474 in the UK. Public policy ecosystems of support account for the difference. The Marcora law in Italy in 1985 has established a public policy framework to support the development of worker co-operatives and a right to buy when private firms come up for sale. Additionally specialist public sector supported co-operative financing arrangements have been established. France has established a similar ecosystem of support. This has led to the significant growth in worker and social cooperatives in both countries. Italy has pioneered the Mutual Guarantee Society to assist co-operatives to secure very low cost capital from banks for development. This innovation is now well established in 19 EU countries. There is a need for a Mutual Guarantee Society system in the UK as well as specialist co-operative capital funds. The growing interest in Wales, Scotland and UK regions to establish public banks offers a strategic opportunity to set up enabling ecosystems like in Italy and France.
In policy terms, our research stresses the need for continuity and transparency in the benefits system. The treatment of housing is a challenging matter and poor access to secure housing is a major issue for precarious workers.
At the same time, it appears likely that Universal Credit will make access to welfare benefits harder for self-employed workers while the treatment of housing costs and the initial waiting period to receive payments is also a concern.
This context adds weight and relevance to long-standing arguments in favour of a Universal Basic Income. Citizens’ Income Trust research suggests that a Universal Basic Income even at a tax neutral level would increase social and economic security for the lowest income workers. In the context of a rapidly changing environment for work, proposals such as these are welcome as, beyond the efforts of self-employed workers themselves, new policy solutions are also likely to be needed.
Link to the full report here, Working Together: Trade Union and Co-operative Innovations for Precarious Work
Pat Conaty, Alex Bird and Philip Ross produced the first report, Not Alone, (Co-operatives UK, Wales Co-operative Centre & Unity Trust Bank) which focusses on the needs of people in self-employment who face low income.
Their second report Organising Precarious Workers: Trade Union and Co-operative Strategies, from Co-operatives UK and the Co-operative College, was commissioned by the TUC.