Mutual and Cooperative Solutions for the Self-Employed

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  • Research proposal by Pat Conaty: Mutual and Co-operative Solutions for the Self-employed


This project has been realized through:

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Pat Conaty:

"Since the 1990s there has been an escalating expansion of precarious employment across Europe and in many other countries globally. Professor Guy Standing at the University of London has called this new flexible work force, the ‘precariat.’ In some countries in southern Europe with ballooning national debt, the cuts and rising austerity, insecure forms of employment have become pervasive.

The forms of insecure work includes casual work, temporary work, self-employment, forms of micro-enterprise, contract labourers, outputting/home work, freelancers in IT, cultural industries and sole traders in many other trades. The mission of this Deliberative Inquiry project is to co-develop with key stakeholders a diverse and practical range of mutual aid solutions for this sector across the UK. The first phase of this the inquiry will set up a task force to consider current good practices both in the UK and abroad with the aim of integrating through a co-design process a number of existing mutuality solutions operating currently and provided by the co-operative, trade union and social finance movements. The mission is to develop collaboratively a social economy system to meet the needs of sole traders and with a particular focus on those on the self-employed precariat that are outside existing sources of services provision. Background Research by new economics foundation (nef) in 2008 indicated that the self-employed alone, account for one in four jobs in the UK economy.1 Since the banking collapse self-employment has soared to its highest level since the Great Depression. 83% of 4.1 million sole traders nationally earn less than the average income. The nef research found in England and Wales that the self-employed were below the radar screen of Government and local authorities but also difficult for the trade union sector to assist.

The findings of Supiot and Perulli’s research reports for the European Union has highlighted that the self-employed suffer from welfare exclusion because they are not covered by company law, being freelance, nor are they afforded protection by employment law, despite the fact that they sell their labour power.2 As workers, they fall between both legal fields of protection. As a result, they are excluded from the benefits (or an equivalent) that other workers can access in relation to statutory sick pay, minimum wages, holiday pay, maternity and paternity leave, redundancy and working time regulations. Pension treatment is also a major issue.

The nef research developed a model for a mutual for the self-employed. Innovation has followed. For example, London Rebuilding Society has developed a Mutual Aid Fund for African immigrant communities. The research also inspired the 2012 launch in Berlin of Kredit Union, a mutual finance system for sole traders.

Set up in 1995, Freelancers Union in New York is organising these workers in similar ways to Kredit Union and has built up a membership of over 230,000. Trade unions for the self-employed have been developed in the Netherlands, Denmark and Germany. These are growing in scale. In the UK, there are craft unions for the self-employed in a number of trades ranging from journalists to bakers and from actors to musicians. There are also co-operatives for the self-employed for taxi drivers, farmers, fishers and diverse artisans. Employers Alliances provide services in France.

WIEGO with links to the international Fairtrade movement has been working on successful mutual models that integrate co-operative, mutual finance and trade union solutions. SEWA Bank in India has been a pioneer of these democratic and integrated mutuality solutions for women sole traders in the precariat.

Since 1990 an increasing number of European countries have supported the development of mutual guarantee societies to assist sole traders to access lower cost finance through mutual insurance. Mutual credit like WiR in Switzerland with over 65,000 members (one in four small businesses nationally) and Ithaca hours in New York are successful forms of co-operative money. Such services have not yet been introduced to the UK and unfortunately an early pioneer, the National Association of Mutual Guarantee Societies, set up in England in the 1990s was forced to close down not because of any problems with the model itself but because of a strict interpretation of insurance laws by the UK regulator a generation ago. This was before mutual guarantee societies went on to become ubiquitous in most of countries of the European Union over the past twenty years " (email January 2014)