Blog article

Working Together – the push back from co-ops and trade unions starts here

Today, over 7.1 million workers are in precarious employment, on short term contracts or self-employed, writes Alex Bird, co-author of Working Together: Trade Union and Co-operative Innovations for Precarious Work.

That’s around a third of the total workforce. Not only do they have almost no security, but while the average employed worker is losing out year by year in real terms, the self-employed are doing even worse, earning less each year in cash terms. 1.7 million people in precarious employment are earning less than the national minimum wage, with no real enforcement of the law, and the self-employed are not even covered by the existing legislation. The median income for freelance workers and those on zero-hour contracts is 40% below the median of those in traditional employment, and 77% of the self-employed are living in poverty.

As a result, Britain is more unequal in income than at any time since 1939. Out of the 30 OECD countries in the Luxembourg Income Study (LIS) data set, the UK is now the seventh most unequal, and the fourth most unequal in Europe, just ahead of Greece, Spain and Estonia. Both off-line and on the web, ‘on demand’ work is escalating – there’s been a 10-fold increase in zero-hours contract work since 2006. There were 4.8 million self-employed (15% of the workforce) at the last count, and that’s estimated to be over 5 million by now. Very shortly there will be more self-employed workers than public-sector workers in the UK. Freelancing has expanded by over 1 million in the last decade, and two thirds of new jobs in the UK are being created by people becoming self-employed.

Self-employment is also a pre-condition for most gig economy jobs, even when its driving a van and wearing a uniform supplied by the employer. Jobs with almost no rights are becoming the new normal. In a major new report commissioned by Co-operatives UK and the Co-operative College, the authors spell out innovative solutions to the problems of the precariat, the self-employed precariat especially. They have looked at examples from around the world, as well as in the UK, where innovative solutions developed by co-ops and through a coming together of co-ops and trade unions, have been able to overcome some of the difficulties the precariat have.

These co-operative and trade union initiatives enable individuals to gain some power in the employment marketplace by working together. These include union co-ops in the USA, where co-ops of the self-employed, such as taxi drivers, have come together with the support of union 'locals' or branches, to set up their own radio networks and smart phone apps, and in many towns and cities have come to be major players in the taxi market. Similar taxi co-ops also exist in the UK, including Edinburgh, where two co-ops have dominated the trade for decades, bringing increased benefits to drivers because all the profits are shared amongst them.

"Britain is more unequal in income than at any time since 1939. Out of the 30 OECD countries in the Luxembourg Income Study (LIS) data set, the UK is now the seventh most unequal, and the fourth most unequal in Europe, just ahead of Greece, Spain and Estonia." Alex Bird

The report also looks at large scale networks of the self-employed, which provide a complete back office solution for the self-employed; invoicing, chasing payment, organising the payment of taxes, and enabling them to work in collective teams on larger contracts. The largest of these is SMart in Belgium, which has over 25,000 active users and a further 55,000 registered on the system who use it from time to time. SMart is now officially recognised by the Belgian government as a large employer, and so is able to influence and lobby government on issues for the self-employed. SMart is now expanding across the European Union with franchises in seven other countries and is building a partnership in the UK with both Indycube, a shared workspace co-op and the Community trade union, to roll out a similar system here. Indycube now has 36 co-working premises across the UK.

The Working Together report not only looks at these and other initiatives and outlines a way forward for trade unions and co-ops to work together, it also points out the need for legislation and public policy changes to support this. For instance, the UK has relatively few worker owned co-operatives, only around 500. Italy by contrast has more than 24,000 worker and social co-ops (employing 827,000), Spain has about 17,000 (employing 210,000 people), and France has 2,600 (employing 51,000 people). This transformation was propelled both by legislation in Italy in 1985, and in France, new legal structures designed especially for worker owned co-ops, as well as legislation that ensures a co-operative transition is always considered when businesses are sold or closed. 

We also need a more supportive business development structure in the UK, with the co operative option fully supported (whereas in most business creation programmes, the co operative possibility is usually ignored) as well as a closer understanding between the co operative and labour movements.

Written by Alex Bird
Updated: 20/03/2018