Innovation and Institution: A Conversation With Sara Horowitz of The Freelancers' Union by Hofstra University

INTERVIEW

Freelancers Union – Two Decades of Growth and Innovation: A Conversation With Founder Sara Horowitz by Sharryn Kasmir

or over 20 years, Sara Horowitz has advocated for the growing independent workforce and for a new safety net for U.S. workers. Horowitz founded the non-profit Working Today in 1995 and its partner 501c4 organization Freelancers Union in 2003. Freelancers Union pioneered a portable benefits model for independent contractors, and its National Benefits Platform offers health and disability insurance and retirement plans to freelancers. With roots in New York City it has grown to become a national organization with 360,000 members.

The new form of union has to emerge from a new economic mechanism, and that new mechanism has to be developed. That’s an entrepreneurial endeavor, because revenues have to exceed expenses, and then you build the social movement strategy on that economic base. But you don’t get to the social movement strategy, I don’t think, until you figure out your economic base.

SK: What do you have in mind when you think of that economic base? SH: When I started developing Working Today, I was trying to figure out what is the parallel for freelancers to the collective bargaining model where people have one job for a long time. Working Today was kind of an innovation lab, where I could experiment with different models. I experimented with three models, and finally the third one was the one that stuck.

An estimated 55 million U.S. workers—one-third of the workforce—are not legally regarded as employees. Freelancers Union offers services and supports policy and legislative change for independent contractors in a range of industries, from Uber and Airbnb to medical professions. Horowitz won a MacArthur “Genius” award in 1996 for her forward thinking and a Eugene V. Debbs prize for her contribution to the labor movement. She considers Freelancers Union an innovative model for organizing workers who do not fit the New Deal definition of employees. Regional Labor Review’s Sharryn Kasmir met with Sara Horowitz in June, 2017 to interview her about her two decades in building a new kind of labor organization that responds to the changing U.S. workforce.

First, I had to figure out what the revenues are. In the American labor movement now it’s dues, but it doesn’t have to be dues; it could be something else. I was open to whatever it was going to be, but it had to come from workers, from workers’ economic power and aggregating their purchasing or action back into their own community. This model became Freelancers Union.

SK: What did you see 20 years ago in the economy and the labor market that led you to search for a new model? SH: I was a labor lawyer, and I worked for a firm that made me and a bunch of other people independent contractors, even though we were really employees. I studied labor as an undergraduate at Cornell School of Industrial and Labor Relations, and I knew labor history, labor law and labor economics. So, when I became a contingent worker, I understood my experience through history and economics, and it gave me the insight to see that work was quickly moving to short-term, project-based contracts.

SK: Hofstra’s Regional Labor Review is celebrating its 20th anniversary; it launched around the time that you began Working Today. Would you refect on that time? SH: Maybe there’s something about 20-year anniversaries—it is a time when you can really reflect. I’m in the midst of a similar moment right now. The impetus for Working Today, which later became Freelancers Union, was to figure out the economic mechanism that could make the next form of unionism. When you look at labor history, when you look at ... We can go even back further to medieval guilds, but in modern history, there was the craft union movement in the 1880s, the industrial unions of the 1930s, and as work, capital and business have changed, so unions will have to change.

At the time, I didn’t fully understand what that meant, but I had an intuition. The New Deal had two requirements, that people be

employees and that they have full-time jobs. When I started Working Today, I understood that people weren’t going to necessarily be employees nor were they going to have traditional jobs; therefore, we have to think about what the next safety net would be in light of that reality.

sounded neoliberal to some people, but we saw it differently. Markets are just means for distribution; they can be structured and used in many different ways. That phase of experimentation was Working Today and the first years of my work. Then we started building the membership piece. That put a stake in the ground and said: "This really is unionism.” We may not get it right at first, but we’re marching toward an organization that’s financially independent, aggregating workers’ economic power, has a point of view about making the next safety net, and is able to advocate for that safety net.

SK: What were the frst years of Working Today like? What were some of the hurdles you faced early on? SH: At first I asked myself: "Which models are working?" Everyone that goes down this path starts by looking at AARP, but the trouble with AARP as a labor model is that membership is individual, not collective. Collectivity was important for a lot of reasons, but one, in particular, was that you need a great deal of money to build an organization. People may not know this, but AARP was started by the American Retired Teachers Association, and backed by Colonial Penn Insurance Company for millions of dollars in 1958. No knocking AARP; they’ve done very well to protect Social Security, but we didn’t have a Colonial Penn. That was the first model we considered, and it didn’t fit.

SK: Did you get pushback from traditional labor unions. SH: Actually, the head of the Communication Workers of America came on Working Today’s board immediately. The Teacher’s Union, Sandra Feldman and, later, Randi Weingarten, were also protective and supportive, and Hector Figueroa at 32BJ. For those in the labor movement who didn’t and don’t like us, the attitude is live-and-let-live. The most difficult group has been those who are convinced that the liberal government model, where government funds and provides services, is the only game in town. I don’t share that view. I believe in non-governmental organizations like unions and cooperatives; that sector needs to be robust. There’s a definite role for government, but we need non-governmental organizations that mobilize people in social organizations to mediate democracy.

I started thinking about other models, and I have a vivid memory about the second model I was considering. I was walking down the street in Brooklyn, on uneven sidewalk paving stones, and each time I took a step, as if I were humming a tune, I said, “This-isnever-going-to-work.”

Every time you try something that Sara Horowitz (dark hair, fst raised) and doesn’t work, it’s a scary moment, Freelancers Union staff. because no one’s told you what will work. You keep going and trying. By the time I figured out the third model, it did work—to generate revenue by providing services and other things. SK: How did you build membership in Freelancers

Union? How many members do you currently have? SH: We have 360,000 members, 2 million people who read our blog, and about 125,000 Facebook followers. Talk about not following the traditional playbook. Two of our original funders were the social innovation fund Echoing Green and the nonprofit venture philanthropy New Profit. They matched me with the management consulting firm Monitor where I got a coach.

SK: Was that the origin of Freelancers Union from Working Today? SH: Working Today was a good name 20 years ago, because it didn’t signal anything that had triggers for people; in that way, it allowed maximum creativity and freedom. I’ve always thought of this a creative process, and I think a lot of political people don’t fully understand why that’s so very critical. You constantly need to experiment and be intuitive and see what works and what doesn’t. Working Today was able to fly under the radar and experiment and be open to ideas, any ideas that could work.

I learned about marketing from Monitor, and it turned out to be incredibly helpful. Now, 15 years later, we see what social media marketing looks like, but then we didn’t have social media, so I had to understand intuitively that there were ways to attract workers, to get them interested and to tell their friends. We were sort of doing social media before there was social media, and we were 100% focused on what freelancers needed, so it felt like an authentic voice.

It was a good exercise, a painful one, because it put me at odds with people with whom I had shared views. For example, we caught some flack for our recognition of the importance of markets. It 26

SK: And you started to offer benefts? SH: Yes, we focused on services and benefits. Those were the fundamental core of guilds and other labor organizations, and we recognized how critically important they were.

SK: How has your model shifted in the wake of the Affordable Care Act and all the challenges it faces? SH: We’re in a time of great change that is still in the making. A lot of the insurance start-ups focus on freelancers, and we curate their products and help figure out which ones are most helpful. We have the easiest way for people to sign up for benefits, because we analyze what they need so they don’t have a million choices, and we help make it much more manageable. Then we work with the insurance companies that tend to be more technology-focused, so it becomes a very easy process from beginning to end. As the insurance companies get better at that, we can make the system much easier to navigate.

Our commitment to excellence in those services built our reputation and persuaded people that this was a serious effort. If we could provide benefits effectively, then we must be a real organization. It also showed our advocacy around the next safety net; it gave people space to believe that the safety net could be delivered in a different way.

SK: What were the frst benefts you offered? SH: Health insurance. This is the funny thing. I had been a union organizer with 1199, now SEIU, and when I started organizing freelancers, I would meet with them, you know, build leaders and have committees, like I did in the union. The number-one issue for people was health insurance.

The problem still is insurance in America. I am coming to the conclusion that we need a basic universal system, with a supplemental system, just as in Canada, England, and, particularly, Scandinavia. But we have to stop individualizing people; it has to be delivered through non-governmental groups, like unions, community groups, credit unions, and cooperatives. If we get that piece wrong, we will be living that nightmare for the next 20 years.

I thought, “How hard could that be? We’ll just figure it out.” That was the string that made the New Deal unravel for them, and it showed that we don’t have the organizing principles for a third of the workforce. It’s funny, because at first I thought, “Oh, how boring, health insurance.” But it’s turned out to be completely fascinating, and it goes right to the core of people’s anxiety about what’s happening to them in the economy.

SK: You want to see non-governmental groups deliver the supplemental system. SH: Right. Think about it; the trade union movement has union benefit plans, and they have experts who make sure the plans are good. Individuals can’t possibly know that. One of the challenges for freelancers, not only do you have to freelance, but you also have to be an HR expert.

SK: They couldn’t purchase health insurance as individuals so you aggregated them. SH: Yes. It’s fascinating, because progressives working on health insurance reform were focused on universal solutions for the individual, for example, mandating what should be in a plan. But the progressive movement has to recognize that people do better in groups, and they do better in groups that they choose. A lot of people would love to get benefits from their credit union or from a cooperative. We need that kind of imagination. I think that’s critical. I think progressives have inadvertently internalized Ronald Reagan and think only of the relationship of the individual to government. The political right thinks of the individual to business, and the left of the individual to government. What is missing from both is the collectivity.

I think we’re in the beginning of the next great political realignment, and it’s not clear who’s going to get the workers. But I would like to think that it will be premised on the universality of work from low-wage to high-skilled, recognizing the ways we are different, but also the universals. That’s the winning coalition, and that has to be the next politics. Bernie Sanders sometimes gets to that, and I think that’s helpful. There are very few people who are not workers because they are so wealthy. Once you get to that frame, it can be much more helpful than where we are now, which is a bit anti-worker, or we select out specific groups of workers who we deem worthy of our concern.

We have no civic infrastructure anymore. Look at what’s happening to Planned Parenthood, and look at what’s happening to the union movement. As Thomas Frank writes so beautifully in =, the Democratic Party, shame on them, dropped the ball and let these institutions die. Freelancers Union brought people together in a group, we created an institution, and then we worked politically to be able to get insurance that way.

Our members are in technology, finance, services, lots of different sectors. We have freelance anesthesiologists, nurse practitioners, teachers, health care – a lot of alternative health care providers – dog walkers, coaches, Uber drivers. It’s interesting, because members who do Uber and Lyft or Etsy and Airbnb, it’s a supplement to their income. Very few are doing those jobs 40 hours a week. It’s supplemental, and because freelancers are not eligible for unemployment insurance. If you don’t have work, you’re not paying the rent.

New York State pioneered portable benefits, and we were the first portable benefits model of the gig era. People could join Freelancers Union and go from project to project and gig to gig and keep their benefits. Later, we added retirement, life, disability, dental. 27

SK: They’re freelancers in one sector and Uber drivers or have Etsy stores to supplement their other freelance work? SH: Yes. If went back to early 20th century European immigrant populations, you would see piecework and different livelihood strategies. Now, what we think of as middle class people are turning to those additional income strategies. And people have so much anxiety about the short term that they aren’t thinking about retirement, and that is going to hit us hard.

People tend to think about labor in traditional ways. But Brooklyn Chamber of Commerce, Kickstarter, We Work and other companies supported the bill. Imagine being a company that pays your workers? You don’t want to compete with companies that don’t pay. It’s a very smart way of running our market in New York City.

SK: Do you see taking this legislation to other cities or national? SH: We are building the Guild in New York first and then going to other cities. And to your first question, about reflecting on 20 years, we are starting the next layer. We are now in 23 cities, and we have something called Spark, where freelance leaders in 23 cities run programs the same day of the calendar on the same topic. They run a program in each city, and then in between those events, there’s peer-to-peer education.

We’re also seeing troubling economic trends where our consumption numbers are down. If you don’t have a middle class and you don’t have some moderate-income earners, they’re not buying. If you are worried about being unemployed after one gig dries up, you’re saving too much for a rainy day, because you’re not collectivizing risk through any kind of insurance.

We’re starting to build leadership from the ground up so Spark freelancers run their own programs or their own organization. They have the most insight into what they need. It shows you can take a virtual network and keep enabling people to find each other and meet locally. At the same time, they get the power of a larger, virtual group.

SK: What policy initiatives or legislation do you currently support for independent workers? SH: Senator Warner in Virginia just put in a proposal for an innovation fund from the Department of Labor to experiment with portable benefit systems. I think he understands the gig economy. And we just won a big victory in New York City. The Freelance Isn’t Free Act is the first wage-theft legislation in the country. It says that if you hire a freelancer in New York City, you must have a contract and pay within 30 days. If you don’t, the freelancer is eligible for double damages and attorneys’ fees. The law went into effect in May, 2017.

SK: People talk about “platform capitalism” to describe what Uber and other platform-based corporations do. It sounds like you are creating “platform non-proftism.” SH: That’s interesting. We’ve been doing it for so long that we don’t call ourselves that. In fact, we are a platform and a marketplace, but it’s about the resources of the community going back to the community.

What is so great is that it illustrates this next era’s structure. What is the role of government? If a freelancer complains, the Department of Consumer Affairs and the de Blasio administration sends a letter to the employer stating that a complaint was filed. That is significant because a lot of employers will take notice. If the employer still doesn’t negotiate or pay, then the presumption is in favor of the freelancer.

I’ve been thinking about how you take that to the next level. I am interested in “Mutuals 2.0.” How do you put together the capital infrastructure to achieve social goals and that can scale up? I’m working on that now.

SK: You are working on capital and fnancing. SH: Yes. We don’t have sophisticated capital infrastructure on the social side. The best we have is in affordable housing, because there’s collateral in buildings, agricultural cooperatives, some credit unions. We should look at these complex capital systems to extrapolate what the social sector market should look like.

Freelancers Union took the baton at that point. We organized our members who are lawyers, freelancer lawyers, and created the Freelancers Guild. We created an app. So now you go to the app, and you put down your legal concern, whether it’s immigration or wage theft, you give some information and hit send, and you are automatically assigned two lawyers. We’re building the connection between our members who are lawyers or other service providers and people who need help. The law enabled us to be even more powerful by assigning double damages and attorneys’ fees.

To the extent that foundations are thinking about impact investing, they should look at how some part of what they do has belowmarket capital, and that entities with sustainable business models can play a role in delivering those service. I think the progressive movement needs to get to that point, with sustainable institutions like credit unions, co-ops, and move away from thinking it’s all foundation grants and charity, because this isn’t charity work.

There hadn’t been a market before because it wasn’t worth a lawyer’s time, and they couldn’t afford to take on those cases. Now they take the cases, and it’s probably the most powerful way to enforce the law, because it’s through a market, as well as through government. We wouldn’t want the government to run that app. Look at how wide the playing field just became; look at how many people and institutions we involved and how many connections we made.

Lately I’ve been thinking about infrastructure banks. They’re always about light rail, you know, or something like that, physical infrastructure. Why couldn’t they be for civic infrastructure? 28

There are all sorts of sophisticated organizations like LISC that operate in the billions of dollars and have incredibly capable professionals. Why couldn’t we do that? It’s going to be critically important in parts of the economy that are not thriving. It’s one thing to have capital in New York, Boston and San Francisco, but when you go to a place that is economically depressed, you’re just not going to kick-start with venture capital and private equity. You need something, but it can’t all be a grant model, because that money goes away over time.

People are starting to realize that the collective bargaining model with one employer is an important and vital one, it is not going away, but we have to be open to new models. That’s not an antilabor point of view.

When you look at Bitcoin and other initiatives, you see that alternative currencies are going to become important. That sounds a little bit crazy right now, but it won’t be. It will quickly become much more mundane.

The union movement’s job is to care about workers, and government needs to think about how to protect these institutions and enable them to grow. It won’t just be on the left. The institutions have to be on the left and the right, whether it’s evangelical Christians in the South or trade unions in the Northeast. It is about building civic infrastructure, and that’s critically important.

The bedfellows are going to be strange because it is an economic model. And, I cannot imagine the next labor movement continuing the relationship with the Democratic Party and saying, “You don’t have to care about our institution.”

SK: What do you think is going to happen with the Affordable Care Act? SH: The people I trust are the people who don’t know, and I don’t know either, but I have broad contours of thought. I feel we are heading into the next era of what progressive government will look like, what the next safety net will look like, and I don’t think it’s all going to be delivered by government.

I could break bread with some small-c conservatives who believe in limited government. Technology enables us to come together in ways that are much more decentralized, but we need to maintain government financing also. I just don’t see how that goes away. We don’t look at VA hospitals enough as a model. We keep flirting with private insurance as a solution and as part of “affordable care” when we know full well there’s really no market in taking care of poor and sick and old people. We should recognize that’s a legitimate role of government, and we should do that properly. There are all sorts of issues with the VA, but it’s a pretty good system, and it should be public. I think that we should have private insurance where private insurance can actually have a market and be efficient.

SK: What’s on the horizon for Freelancers Union? SH: As the debate moves toward the next safety net, our role is to be a key player in articulating the needs of freelance workers. That’s number one, and a continuation of our work. We will continue to provide benefits and to grow the membership. Our goal is to have a million members in the next few years. Then the next thing is starting to think about new capital models SK: What do you see as the future for labor and for the labor movement in the U.S.? SH: The next year is going to be brutal. If the Supreme Court rules on right to work in the way it appears it will, the public sector will take a very big hit. I think there will be a discussion on the role of unions going forward and which unions will have the most power within the AFL and outside of it.