Trade Unions and Co-ops could build a ‘solidarity economy’ for the self-employed precariat

If workers don't organise, the private sector will tighten its grip


The ‘precariat’ – self-employed and short-term contract workers who aren’t earning big money, and often find it hard to accumulate any assets, let alone get a mortgage and buy a home – are a growing part of the economy.

In the UK there are 4.6 million self-employed people, and 27 percent of those employed would like to join them. Predictions suggest that by 2018 there will be more self-employed people in the UK than public sector workers.

In our research published today, my colleagues and I have looked at the needs of the self-employed precariat – which include help with paperwork and admin, access to finance and credit control, shared workspace, legal assistance and companionship.

We then looked at examples around the world of how co-operatives, mutuals and trade unions provide these services, as well as representing the precariat to government and others, and how they might work in the UK.

We concluded that if precariat workers don’t organise themselves, then the private sector will increasingly provide such services, and get an even firmer grip on this sector than at present.

We already have employment agencies taking a commission on placing people into short-term contracts, and the likes of Airbnb and Uber dominating what they call the ‘sharing economy’. In reality though, the only sharing is done by the owners of such companies, sharing out their profits from the commissions they take.

In a mutual or trade union model this would be genuinely shared among the precariat workers using the service.

We’ve looked at examples across the globe. The CAE (Cooperatives d’Activités et d’Emploi) movement in France, not only helps the self-employed make the transition from unemployment or the informal economy, but which also supports them with back-office paperwork, smooths out their cash-flow, and provides many of the workplace rights and benefits enjoyed by the employed, such as sick-pay and pension contributions.

Having started in Lyon in 1995, CAEs were only fully incorporated into the legal system last year, but nevertheless the movement has grown, and there are now 72 CAEs across France. Many now also provide shared workspace, tolls, and other facilities, and encourage members to work together to secure larger contracts.

In India the Self Employed Women’s Association (SEWA) was established in 1972 as a trade union by Ela Bhatt. Over time it has diversified its services to meet members’ needs through developing affiliated co-operatives. Today SEWA has over 1.7 million members and operates across most of India.

One of its most successful projects is the SEWA bank, a co-operative savings and loan institution set up to tackle the usurious interest rates charged to sole traders by money lenders. In 1997, SEWA convened an international event to foster research on informal workers. This led to the establishment of WIEGO (Women in Informal Employment, Globalising and Organising) as a collaborative project. Based in Manchester, it now has groups in 40 countries, along with 32 institutional and 142 individual members.

In the US, following a failed attempt to save an Ohio steel mill through a worker buy-out in 1977, the US Steelworkers Union became increasingly interested in worker co-operatives, and set up the Ohio Employee Ownership Center. In 2012, the union worked jointly with the OEOC and the Mondragon Corporation in Spain to produce a strategy and Union Co-op model. Since then eight Union Co-ops have been created.

These include the Clean and Green Laundry in Pittsburg and seven other Union Co-ops in Cinncinnati, Ohio. Among them is a co-operative food hub, a railway manufacturer and a jewellery manufacturer.

All these examples and many more show how things could be different here in the UK if the trade union and co-operative movements worked more closely together to produce a solidarity economy.

Both movements share a common culture of worker self-help, people-based democracy, and mutual ownership that is radically different to the ‘Plc culture’ of shareholder power.

A number of the smaller trade unions in the UK already offer services tailored to their self-employed members, and some are starting to look at union co-ops as well. There is considerable knowledge of what works, and it is starting to come together to build new relationships.

This is a trend that is starting to accelerate, but still needs a little support to ensure it grows.

Alex Bird is a self-employed business adviser and researcher specializing in co-operatives, and is a member of the, a small co-op of freelance consultants.

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