Sticking to the Union
A Kennedy School graduate organizes the "free-agent economy."
As a full-time freelance writer in New York City for 15 years, Greg Lichtenberg ’88 tolerates the cash-flow anxieties because of the clear lifestyle benefits: lots of control over his time (especially helpful for parenting), and the chance to truly employ and enjoy his craft. And unlike his cohorts in nine-to-five company jobs, he happily reports, “I’ve also probably avoided thousands of hours of meetings.”
He is not alone. His wife, a former attorney, is now a self-employed childbirth and parenting educator, and many of their friends have also joined the ranks of this labor demographic, officially classified as “contingent workers” by the federal Government Accountability Office. As of 2005 (the last time comprehensive data on this cohort were collected), the group represented about 31 percent of the labor pool: independent contractors, temporary workers, and anyone self-employed, as well as day laborers, part-timers, and those on-call.
In today’s economy, some people say the cohort is increasing, as is employer demand for such services. Labor advocate Sara Horowitz, M.P.A. ’95, saw the trend coming more than a decade ago and founded the national Freelancers Union to represent this disparate, nontraditional class of workers. The union’s headquarters sit in the DUMBO (Down Under the Manhattan Bridge) neighborhood of Brooklyn, where its open offices have the feel of a cooperative, social entrepreneurial venture--which is how Horowitz views the work of modern labor leaders. “We bring people together and solve problems around labor issues,” she says.
She is quick to rebut arguments she’s heard that this is not a real union. Freelancers Union (it officially rejects the acronym FU) does not engage in collective bargaining for wages, for example; it also lacks the conventional structure of hierarchical elected officials, and has no single company, industry, or geographic nexus as its base. All this leaves Horowitz unfazed. “This new form of unionism is implementing traditional labor strategies of using the market power of large groups to help freelancers access better benefits, and it’s organizing this decentralized group into a constituency capable of powerful collective action,” she says. “Strength in numbers is strength in markets and strength in politics. The value of grouping hasn’t changed, but the way people are grouping themselves in today’s world--workforce and otherwise--is changing.
“The new way of working is far more short-term, with people going from job to job, or doing several part-time jobs at once--especially among those over age 35,” she explains. “Most people these days will probably work as an independent contractor at least once during their careers”--whether taking on extra projects outside a salaried position, working part-time to balance family obligations or to earn more money in semi-retirement, or coping with layoffs and cutbacks through a temporary job.
Greg Lichtenberg sees the trend, especially among urbanites. “There is plenty of freelancing across a range of fields; you don’t have to explain what you are doing anymore,” he says. “Freelancing is more of an accepted way to make a living.” Dan Gerstein ’89, a former communications strategist for Senator Joseph Lieberman, now runs his own company, Gotham Ghostwriters, and relies heavily on freelancers to fill the needs of companies that don’t want to hire full-time writers. “We are cheaper,” he notes, “and we can offer access to a wide range of writers with a wide range of expertise and experience.” Gerstein sees such niche employment as the wave of the future. “Every trend--globalization, technological innovation, outsourcing--is creating demand for flexibility and specialization in our workforce. That’s why small businesses are such a fast-growing sector in the U.S. economy and the biggest engine of job growth,” he notes. “And that’s why we’re going to see more and more workers morphing into independent contractors. Some will see it as a great opportunity to maximize their marketability and compensation. Most others will see it as the only option for making a living.”
The problem, Horowitz asserts, is that the majority of these freelancers cannot obtain affordable health insurance and other traditionally employer-based benefits. Nor is this group protected by the laws and policies related to unemployment compensation, workplace disability, and discrimination, for example, that apply to salaried, full-time workers. If freelancers aren’t paid, she notes, one of their only options for recourse is small-claims court--a time-consuming exercise with a cap (in New York) of $5,000. “Companies need and like flexibility for their workforce,” she continues, “but our social safety net, which was created for the manufacturing era, is outdated in terms of this new group of workers. We need a new New Deal to protect this group, which has episodic incomes, lack of benefits, and lack of legal recourse.”
Horowitz supports the recent state and federal crackdowns on the continuing problem of misclassified workers: when companies hire individuals to do the jobs of regular employees but pay them neither benefits nor taxes. Some companies specify that freelancers will work only a certain number of months, making them ineligible for unemployment compensation. Horowitz has also seen workers who are true independent contractors take jobs through staffing agencies that treat them like employees--paying half of their Social Security, for example--but not necessarily providing benefits, which means the freelancers can’t take certain tax deductions, such as for health-insurance premiums. “It’s like the Wild West out there,” she says.
To fill these gaps, Freelancers Union has its own insurance agency, retirement plan, and group discounts. It also provides networking, job listings, and informational events on legal issues, taxes, and marketing to its 138,000 members (85,000 of whom live in the New York City area). Membership is based on a “common work arrangement” (freelancing), and members choose from among 50 industries when they join. The top fields include television/film production, advertising, graphic design, computer/information technology, journalism, financial services, and healthcare/hospitals, but there are also dancers, taxicab drivers, and yoga instructors. Other unions may represent specific groups of freelancers, such as the National Writers Union, but Horowitz says no other organization represents as wide a range of freelancers, or promotes their interests as broadly.
The union offers plenty of opportunities for organizing and political advocacy--which is how Horowitz now spends most of her time. “As the free-agent economy started to take off here in New York, Sara saw far before anyone else that there were no institutions, no infrastructure, to support all those disconnected workers or fight for their interests,” says Dan Gerstein, who joined the union about five years ago when he was a political consultant and his COBRA coverage was about to run out. “FU was by far the best option in terms of cost and choice for someone in my position,” he adds. “I also liked being part of a community, and having access to a wide range of professional resources.”
Last year, the union was instrumental in the reform of New York City’s unincorporated business tax, which had double-taxed freelancers’ income as both business and personal revenue. (The tax was eliminated for those earning less than $100,000; a tax credit was enacted for those earning up to $150,000.) The union also lobbied the state legislature successfully to codify independent workers’ rights to group together for health insurance, paving the way for a push for a national, portable-benefits network. This spring, the union helped draft legislation to expand wage and hour protections enforceable by the state labor department after its own survey of 3,000 independent workers found that 40 percent had had trouble getting paid within the last year--forcing them to spend a cumulative 17,000 hours chasing overdue compensation. “Traditional employees are protected against this,” Horowitz says. “But freelancers have nowhere to go.”
Horowitz has studied labor history extensively, earning degrees from Cornell’s School of Industrial and Labor Relations and SUNY-Buffalo Law School. After a stint as a public defender, she worked as an organizer with the National Health and Human Service Employees Union.
She comes by her dedication naturally. “My grandfather was vice president of the International Ladies Garment Workers’ Union. My father was a union-side labor lawyer, as is my husband,” says the Brooklyn native. “I grew up going to the union housing apartments, where my grandma lived, on the Lower East Side of Manhattan. Labor issues are what I’ve been completely fascinated by and committed to since I was 18. Oh, and my daughter was born on Samuel Gompers’s birthday.” Labor leader Sidney Hillman, who played an important role in galvanizing workers to support the New Deal, is her hero. Not only are unions the largest contributor to any successful democracy, maintains Horowitz, “but every labor movement is the bulwark of the social legislation of its era. Unions are the architects, they make changes happen politically, and they are there to enforce laws afterward--because people are banded together.”
Horowitz went to the Kennedy School, seeking an “intellectual sabbatical,” after five years as a labor lawyer. She had the seeds of an idea centered on the shifting workforce and outdated policies, and used faculty contacts and her academic work to develop her ideas about this niche labor force that had uneven incomes and lacked collective representation and solid governmental infrastructure. They had more in common with workers in cooperative models in developing countries, she realized, than with existing American unions, where wages and benefits are the primary focus. She also believed that the number-one issue for this disparate group was providing a new system of healthcare tied to the worker, not to an employer, through an independent, revenue-producing model. “I thought that if this was successful, it would be evidence that labor movements play an incredibly constructive role in building economic development,” she says. In 1996 she won a fellowship with Echoing Green (a New York City-based nonprofit that supports social entrepreneurship; see “A Prescription for Change,” September-October 2004, page 88) that helped support her work. So did the MacArthur Foundation Fellowship she was awarded in 1999.
Labor leaders have recognized for a long time that the American and global economic base was shifting and the trend was toward shorter-term jobs and less stable environments for workers, Horowitz explains. “People were angry about that and the strategy was to fight it.” Instead, Freelancers Union has embraced those changes, “and we’ve gotten a lot of support because we’re so focused on what the real issues are, what workers and employers are doing,” and on how to update the laws and policies that affect those relationships. “In business terms, the labor movement is an undervalued asset,” she declares. “People do not always realize that there is not one democracy that exists without a labor movement, and that that’s always been the case. The labor movement will always be there. The question is: in what form?”