Freelancers are the fastest growing category of workers in Europe. Their fields of activities are more and more diversified, and so are their sociological profiles and economic capacities. They are a category of workers that has seen their income drop, with a high proportion of precarious workers. To counteract their difficulties (isolation, dealing with economic, administrative and social issues) freelancers are organizing themselves and reinventing forms of mutualism and cooperatives. Innovative solutions are available, but in order to enhance their condition, two essential matters need to be addressed: constituency (who can join?) and dialogue with unions.
The notion of freelancers, in this article, is intended in its broadest definition: workers who have a specific know-how, who work for different clients or contractors, whose income depend on their capacity to find contracts and who do not have a regular employer. Depending on the country, this reality may cover different contractual and employment relations: some are clearly self-employed workers, others, even though freelancing, can work under the legal status of a salaried worker thanks to umbrella organizations or cooperative structures. So statistically it is a difficult category to grasp, as some of these workers may find themselves classified under the employee label.
Furthermore, over the years, there has been a hybridization of contractual arrangements creating a gray zone of employment where workers are not-quite-salaried workers or not-quite-self-employed workers, such as artists in France and Germany. In fact, legislators have identified that classical distinction between self-employed and employees was not sufficient and have therefore made arrangements to make parts of social protection more accessible to specific workers (like temporary agency workers), for certain patterns of work (like seasonal workers) or sectors of activities (like the arts). But arrangements have always been limited.
But how have we come to this blurring of categories of workers? The phenomenon is multifaceted. Of course there is the tertiarization of economy: in the 20th century we have gone from an industry driven economy to a service based one. One cannot elude the changes in production management that have pushed to the externalization of services that are not the core activity of the enterprise (like communications and cleaning). There is also the emergence of what Sergio Bologna calls the “new sectors” of activity, thanks to information and technology evolutions (such as media, advertising and programming) as well as the new societal needs. Indeed, with the reduction of working time over the last century, people had more time and money to spend on their well-being, knowledge and hobbies, which have led to emergence of new professional activities such as coaching, estheticians and training, many of which are run by freelancers.
Another aspect is linked to the aspirations of new generations of workers who prefer horizontal governance, despise hierarchy and prefer to be masters of their time and organization rather than having stability of work and income. In fact, many of these prefer a certain sobriety of life that allows them to take time for their families, self-development and commons or community activities.
All these evolutions have enabled new ways of work that lead to a blurring of the classic division between employed and self-employed workers. In fact, the self-employed category of workers is no longer necessarily a homogeneous class of bourgeois that can count on their patrimonial inheritance and revenue to cover their needs. The production investments needed to start one’s activity are generally much reduced, as many freelancers only need their laptop and cellphone to work. Higher education, sometimes necessary to develop certain activities, is also more open than ever. So freelancing is clearly more accessible than ever, which has changed to sociology of freelancers: beside the classical liberal professions (doctors, lawyers) coexist freelancers of new sectors of economy.
Moreover Governments all across the European Union are pushing unemployed persons to start their own business through various incentives. The reason is simply to cut social expenses, especially unemployment benefits.
All these evolutions have enabled new ways of work that lead to a blurring of the classic division between employed and self-employed workers.
If starting an economic activity is more accessible than ever, creating a sustainable activity seems much more complicated. In recent years many studies have shown that self-employed workers, and particularly independent professionals (i-pros) are both a fast growing population but also an increasingly precarious category of workers who have seen their level of income drop dramatically over the last two decades.
How come? Clearly there is the impact of the economic crisis which has slowed down economic activity. An older trend considers work as a production cost as any other that should be kept as low as possible. Contractors put pressure on freelance workers by hiring (or threatening to hire) professionals from countries where labor is cheap (countries with emerging economies). Contractors who need local services can select professionals that are cheaper, which creates a race to the bottom. Since freelancers are not allowed to set minimum remuneration standards, because they would be considered as a cartel, their bargaining power is, as a group of workers, null.
When it comes to activities from the knowledge economy, the battle for decent work income is even harder as certain essential phases aren’t paid for. For instance, consultants who apply for funds or a contract have to make a project proposal. If they are lucky, they will be selected and win the subsidy or contract, but the work they have done in preparation will not be paid. Some work needs dissemination (for example in the arts or research) and the cost of such activity isn’t necessarily covered. The question of invisible work needs to be addressed.
All data show that even though some freelancers are well-off, as a category of workers freelancers are a growing professional heterogeneous group whose income has fallen over the last decades. The number of self-employed workers who are in poverty or at risk of poverty is worrying: about a third.
Even though some freelancers are well-off, about a third of self-employed workers are in or at risk of poverty.
What can be done to improve the situation of freelance professionals? One solution is to build constituency – that is, to encourage individuals to join together. It is difficult to achieve given the diversity of work sectors, income potential and the fact that these workers, as freelancers, often work in isolation. Fortunately, some interesting initiatives are emerging. As in the 19th century, or today in emerging countries, people in precarious situations self-organise by building solutions.
A new generation of coops are interesting as their aim is to support freelancers’ in making their activity sustainable. Workers are also shareholders, and these types of coops are “a real laboratory in terms of entrepreneurship and labour as they balance subordination issues in the work place with the promotion of members’ autonomy and economic prosperity”. These organizations (such as the cooperatives d’activité et d’emploi in France), respond to new needs and aspirations: autonomy at work combined with security, through employment and mutualization.
These organizations are an excellent place for freelancers to unite, self-organize and potentially create constituency. The more transparent and horizontal the organization the more members feel a sense of belonging. It is an excellent way to reinvent participatory democracy at work. These coops are very diverse throughout the world: they are active in different sectors of activity, are of various sizes, and employ a small amount of workers compared to other types of coops.
A concrete example of such coop is SMart. The name stands for Société Mutuelle pour artistes as it was originally created to support artists in the development of their activity. Almost 20 years later, the Belgian non-profit organization has become a cooperative open to all freelancers. In fact, solutions envisaged for artists have been adapted to professionals who develop multiple skills and jobs around main know-how, work for different clients, have changing roles (sometimes hiring workers to realize their project other realizing tasks within other’s projects) and are often highly mobile. Therefore these are solutions adapted to the wider category of freelancers.
SMart provides these workers with the flexibility they need, as it is conceived as a shared enterprise that can be used flexibly (following one’s needs) while providing the best social protection available: the one of the employee. Conceived for individual workers, it is also adapted to those working in collectives. The members generate contracts or invoices through the online platform, which calculates social contribution, taxes and net salary. Since the principle of mutualization prevails, a levy of 6.5% is charged on each invoice, and the benefits are reinjected in the system to the members’ benefits. Given the scale of membership (80,000 users in 18 years), along the years, SMart has developed a wide range of services for its members: a salary guarantee fund that pays members within seven working days (a debt collection service later recovers the overdue amounts), adapted work insurances extended to private life, legal advice, shared working spaces, training, micro-financing, and meet-ups for freelancers.
All these services answer the concrete needs of freelancers and participate to a double solidarity mechanism: the state regulated social protection of employees (that opens access to unemployment benefits, pension) as well as the one created by mutualization of means (insurance, guarantee fund, training) and risks (debt collection). Even though these models propose strong concrete solutions for freelancers, they are not the panacea as these structures are creating solutions whose needs (social protection) and functioning (autonomy) aren’t properly recognized in the legislation.
In order to improve the legal framework for freelancers, there is an urgent need for representation of these workers and recognition of their needs within the social dialogue. And there is a historical link between mutual, coops and unions. In the 19th century, before unions exist and employment contracts were the norm, workers would organise in cooperatives and mutuals to prevent life and work related risks. At the time, these aspects were not regulated by laws, so unions emerged from these entities, to become a political force per se. They fought to enhance working conditions and create the social protection models European societies still benefit from.
The basic idea of social protection was redistribute fairly and efficiently productivity gains as well as to create solidarity towards the destitute. Productivity was all about industry, driven by employers thanks to the employees labor. Some risks were considered as work-related risks (accident at work, unemployment), the employer being responsible for working conditions as he provided working tools and place. The social dialogue therefore consisted in negotiations between employers and employees, under supervision of the state.
The social pact was then that employees (those who are at risk of poverty and therefore are forced to rent their labor force against salary for a living) were provided a salary and social protection in exchange for subordination (the fact they work under control and authority of the employer). That is why originally social contributions were mostly relying on wages. Self-employed workers (being mainly liberal professions at the time) were considered as not at risk of poverty, as they were well-off to start, and therefore could count on their patrimonial wealth in case of need. They initially weren’t submitted to social contributions nor social protection.
Given that the categories of workers at risk of poverty have dramatically changed since the last century, it is probably time to take a step back and question the categories of workers that should have access to social protection. Today the divide between those in poverty (or at risk) isn’t connected anymore to the type of work or working status (like it was more clearly before), but it is truly a question having or not patrimonial revenue, perhaps work-related social protection created for employees should simply be enlarged to all workers.
This requires reviewing many basics of our economic and social organization, which can seam overwhelming. But let’s face it: trying to transform all workers into employees with full-time open-ended contract has not worked. So let’s try it another way. And why not take the opportunities of these new forms of mutual and cooperatives to experiment solutions. This means that unions and coops should start to collaborate more structurally to find adapted solutions within cooperative and mutual structures as well as in the frame of the welfare state.
In fact the major challenge for coops and mutuals today, compared to those of the 19th century, is to provide solutions to freelance workers within a legal framework that already exists but doesn’t properly address these workers. Two centuries ago everything had to be invented. Today solutions have to be found within a frame of reference that is not adapted to the autonomy production infrastructure and management allow. This is reflected in the social dialogue structure.
Freelance mutuals and coops are ideal places to make the voice of freelancers emerge, to cooperate with unions and help them understand the specificities of freelance work compared to classical employees, in order to co-create sustainable solutions for all. Unions would benefit from representing freelancers as the pressure employees face nowadays, is also linked to the lack of protection of self-employed workers. Building solutions for freelancers is about creating a truly inclusive society and labour market.
SMart provides the flexibility freelancers need, while providing employee-style social protections.
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