The Future of the American Worker

With the U.S. economy continuing to shed jobs—532,000 were lost in May, according to the Bureau of Labor Statistics, which on Friday is expected to release similar numbers for May—unions are getting hammered. In Detroit, the UAW agreed to steep concessions as part of the GM's bankruptcy negotiations with the federal government. They include cutting benefits, cost-of-living increases, holidays and some health coverage, and agreeing not to strike before 2015, in exchange for 17.5 percent of the restructured GM and $6.5 billion in preferred stock. Some 20,000 employees will lose their jobs almost immediately, with hundreds of thousands, or even more, layoffs to come.

Those fortunate enough to land other gigs may find themselves floating from one company to another and working on a contract-by-contract or project-to-project basis. What about health insurance and other benefits? That's where the New York-based Freelancers Union steps in. Since its inception more than two decades ago, the group has grown to 110,000 members spread throughout the country and across a variety of industries. The union evolved from Working Today, an organization founded in 1985 by attorney and labor organizer Sara Horowitz, who in 1999 received a $275,000 MacArthur Foundation "genius" grant for her efforts. Horowitz, 46, spoke to NEWSWEEK's Nick Summers about the atomizing workforce, the future of organized labor and what jobs will look like in the not-too-distant future. Excerpts:

SUMMERS: How have the Freelancers Union and its members been affected by the recession?
Horowitz: Our membership has really been growing—we have over 110,000 members nationally. I think that shows that the rate at which people are freelancing is increasing. Freelancing has been a third of the workforce, and now you could say that it's gone mainstream. Seasoned freelancers are doing OK. That's not to say they're doing great, or better; but after a layoff, there's still work that needs to be done, and the seasoned people are nimble, have a network put together, and know how to deal.

Then, there's a big set of struggling freelancers. Back in the olden days of two or three years ago, they were paying for their health insurance, their retirement, and it was a pain, but they were doing OK. Now, for the first time, this group is living off savings, and they're not OK. They're starting to use food stamps, or going on welfare. It's definitely a minority of what I'm hearing, but I'm hearing it, and it's really shocking.

What's the latest on the health-insurance company the union has formed?
We just finished our first quarter, and 98 percent of the people re-enrolled. We're showing that there really can be another model. One thing I think is fascinating—the Obama administration has been recognizing the importance of cost containment and technology as the two prime issues. For us, all our systems are open-source. We're already paperless. We are the future in terms of technology. And we're completely monitoring our own costs, to make sure our group stays sustainable. We're not looking at cutting costs to generate a profit; we're looking to make sure our members are getting the best care in the best ways.

Do you see the Freelancers Union ultimately as a safety net, rather than a group that can advocate for certain things, like better wages, hours, benefits? You don't engage in collective bargaining, right?
We are definitely a third wave of unionism, after craft and industrial, although the goals are the same. As we say, our goal is to have power in markets and in politics. Because our members are moving from job to job and gig to gig, there's no practical way to engage in collective bargaining. Instead we bring people together to group-purchase, and to influence policy. For instance, in New York City, one of our biggest goals is to get rid of the unincorporated business tax, which double-taxes the income of freelancers. It's now in the state legislature. We can't say we're victorious until the vote is cast, but for the first time in this country, freelancers are moving their policy agenda.

People are viewing unions more positively right now, because of the recession. But to what extent has a new generation come that takes for granted labor's gains over the years, and just doesn't value unions as much as their parents or grandparents?
It would be wonderful if we existed in a culture where people understood that but for unions, children would be working in factories, and people would be working for much longer every day, there would be no weekends, all these important facts. But I think what people are recognizing is that if you don't have unions, and you don't have a good educational system, you don't have a middle class. Those are the two components that make a middle class, and keep a middle class. What we're seeing now is with union membership lower than 8 percent in the private sector, we're seeing the middle class get decimated.

Let's talk about GM. What do you see as the best- and worst-case scenarios for the UAW?
Let me just say this about that. If these auto workers hadn't been unionized, instead of looking at 30 cents on the dollar, they'd be looking at zero cents on the dollar. Second, what is really heartbreaking is when you look at unions in America, the UAW is to me like the Yale of unions. The Reuther brothers—the founders—they towered over industry leaders at the time. They were so brilliant in their strategies, and they really built a middle class and showed how America could build something, and have industries like steel and rubber. [They insisted] that workers could get a share and made democracy fairer. When I look at that, it's not only a loss—that we don't make things here—but it's realizing that we are not creating those kinds of jobs that built the middle class … the kind of people who had money to buy a home, who could send their kids to college.

As we're creating these minimum-wage service jobs, we're not giving people opportunities to express their dreams. It just makes me sad. But I'm optimistic. This economy is really going to change, and I think that we are going to go back to being more real in our perceptions of what we need. A lot of good things are going to come out of this. Educating generations of people to graduate from college [with a focus on] what they'll earn is not noble. An appreciation for what you contribute to society is better.

What advice would you give President Obama on labor?
There has to be recognition that the next workforce is working more independently. That recognition would mean, one, that there's some count as to how many are doing that. Currently, the Department of Labor doesn't collect that data. Two, look at the tax code, make sure that we're giving freelancers the same tax treatment as traditional workers. And, three, for the most part, elected officials and policymakers really aren't as educated as they need to be to the fact that people are now going on a project- and gig-based way, as a workforce. That has to change.