Work Life: Employee association, traditional union or new social order?

March 27, 2013

More and more we’re starting to hear how groups of precariously-employed workers are responding to the vagaries of the “new normal” labour market. From lower-skilled workers to professionals of all stripes, an increasing number of workers are classified as independent contractors, temporary workers, contract employees, part-time and freelancers. The Bureau of Labor Statistics claims that there are more than 20 million “independent” workers in the US.

I wasn’t able to find out how many free lancers there are in Canada, but it is considerable.  But we’re not talking just about voluntary free lancers; we’re also talking about people who would like to work fulltime, but can only find contract work, whether it be with the government or in the private sector. Today all types of workers, from lawyers to graphic artists, accountants, writers and UPS delivery people find they have no option but to offer themselves as independent contract workers in order to collect a pay cheque.

And if any of us have doubts that this trend will continue, the Conference Board of Canada’s report Industrial Relations Outlook 2013: Embracing the “New Normal”paints a fairly gloomy picture of the state of economic affairs in Canada:

"What are the characteristics of the “new normal”? The underlying fundamentals—low GDP growth, low inflation, and low interest rates—will allow for modest employment and real wage growth."  

The report doesn’t describe the financial crisis that led to this new normal, but it is full of advice for unionized workers:

  • They need to concentrate on improving working conditions rather than wages;
  • The government will be increasing its scrutiny of public-sector compensation and will consider major changes (this prediction was certainly borne out in the 2013 federal budget);
  • Recent bargaining outcomes in the auto industry will put downward pressure on manufacturing wages.

If things are this bad for those workers lucky enough to be in a union, what can possibly be in store for non-unionized workers – such as freelancers  - who are difficult to organize at the best of times, let alone in this sluggish period?

Three stories have caught my attention:  one in the US, one in Canada and one from Europe. The New York Times report Tackling Concerns of Independent Workers  explains how a New York City lawyer, Sara Horowitz, was dismayed to discover that her employer “planned to treat her not as an employee, but as an independent contractor.” And, from the employer’s perspective, why not? As a contractor, she had no right to healthcare coverage, a pension or paid vacation. So she started The Freelancers Union and now heads one of the most rapidly-growing labour groups in the US with more than 200,000 members.

In spite of all the challenges facing the labour movement these days, one has to take hope in the natural tendency for workers to organize, unions or not. Capital has a self-destructive logic to which workers must respond. They follow their own logic (or is it pure instinct?) and come together to face adversity.

In this American example, the greatest challenge these “freelance” workers faced was lack of access to health insurance. The Freelancers Union provides its members with affordable health insurance. To date 23,000 workers in New York State are covered and the Obama administration has awarded the group with $340 million in low-interest loans so they can set up cooperatives to deliver health care to tens of thousands of workers. So it was their precarious status vis-à-vis healthcare, a uniquely American condition, which provided the impetus for so many members to join the new union.

Both the Freelancers Union and the cooperative healthcare delivery initiatives are bold, innovative moves to help workers cope in an increasingly hostile environment, but it is concerning that the union does not negotiate with employers. Is this a union per se? Critics point out that it is more like an employee association that can help with some issues, but is powerless to mediate low pay or job insecurity. In Canada, the CEP is trying a more comprehensive approach to helping these workers.

In contrast to the US experience, the CEP campaign to organize freelance workers concentrates on bargaining power. Explaining the benefits of increased bargaining power is not as easy as selling the appeal of healthcare coverage to the uninsured: our health, or our family’s health, is fundamental to all aspects of our lives and the consequences of not being covered by health insurance can be catastrophic. We are lucky in Canada not to have to worry about basic healthcare: our battle lines are drawn around less primary (but just as important) issues like the right to bargain with our employers. And that is an increasingly difficult row to hoe, especially with the powerful attacks on labour we’re experiencing on both sides of the border.

Both these labour stories are interesting enough in themselves, but comparing them raises interesting questions. Do unions such as the Freelancers Union end up weakening the labour movement, or are they a necessary first step in organizing a group that has proven so difficult to reach? Is there an issue, like the lack of healthcare insurance in the US, in Canada that can rally workers so effectively? As the assault on Canadian workers intensifies, the CEP may find that there is.

Finally, to stir the pot some more, this piece from the Socialist Project The Crisis of the European Welfare State pits some really challenging ideas for the labour movement and the Left in general.  Asbjørn Wahl argues that “Neoliberalism and austerity policies are more or less constitutionalized in the EU today, and Keynesianism […] is banned by law.” He notes the degree to which trade unions are under attack and how they are fighting from a weakened, defensive position.  He too points to the huge effort needed (by a coalition of left organizations) to organize the growing numbers of precariously-employed and youth. Most challenging of all, he calls for trade unions to break with its social compromise mentality which “represents an un-workable reminiscent of a class compromise which is already history.”  A new social order, he says, is required, one that brings the struggle back to the fundamentals of social ownership of banks, financial institutions and the means of production.


Lynne Fernandez is the Errol Black Chair in Labour Issues.