A 19th-century solution to the high-tech problems of the gig economy

We need a new system to support our new way of work.
We need a new system to support our new way of work.
Image: AP Photo/Jeff Chiu
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Some people believe the gig economy will liberate workers from the 9-to-5 grind. Others argue that the rise of companies like Uber, TaskRabbit and Handy will make it harder for workers to make a living.

Either way, the gig economy poses a significant problem when it comes to benefits. The solution could lie in a return to a 19th-century phenomenon: mutual aid societies.

A traditional job offers workers not only income but also social relationships, training, status, and—especially in the US—benefits. But just as Netflix and YouTube have unbundled cable TV, so the gig economy is now unbundling work, as Nick Grossman and Elizabeth Woyke argue in an important new ebook Serving Workers in the Gig Economy.

Many startups are already attacking various parts of this problem, as Grossman and Woyke write. Some specialized websites allow gig workers to socialize. Others, like Coworker.org, allow them to organize. The service Karma wants to allow workers to export their reputation data from the various platforms they work for, helping them to build standing and command higher wages.

These are valuable contributions, but they don’t go far enough to provide gig-economy workers with resources and a social safety net. Workers in the 19th and 20th-century US faced a similar dilemma before the New Deal was passed. And so mutual aid societies developed as a way of providing workers with services and security, as David Bieto details in his 2000 book From Mutual Aid to the Welfare State.

Many mutual aid societies were organized as fraternal lodges with romantic or strange names, such as the Independent Order of Oddfellows or the United Order of True Reformer. Members paid dues in exchange for access to a wide range of services, based on the principle of reciprocity: today’s donor might be tomorrow’s recipient.

Mutual-aid societies often offered old-age, disability, unemployment and catastrophic insurance. Some societies even ran their own health-care services, going beyond merely employing doctors to build and operate hospitals and other health facilities. A number of societies also expanded into other revenue-generating ventures like banking and funneled the profits back toward their membership.

Some were organized around religion. (Today, the Knights of Columbus are known as an important Roman Catholic charity, but they were originally founded as a mutual aid society for Catholic immigrants.) Others were founded according to affiliations by workers’ profession or region. Several mutual aid societies catered to African-Americans, providing a crucial safety net and sense of empowerment to many black workers in an era of white supremacy.

Not only did these societies provide important services, they offered members a sense of empowerment and belonging. Induction ceremonies and member folklore helped build a sense of affiliation within the groups. But they faded over the course of the 20th century as New Deal programs took over social insurance and outlawed private alternatives.

What we need are mutual aid societies for the 21st century. Many services, such as training and social networking, could be provided online as well as in person.

There are already some modern-day analogues. The Freelancers Union, for example, provides members with health-care coverage, job training and advocacy. Such options should be available to a wide range of people, regardless of their profession.

This is not to suggest that we rip out the social safety net overnight in the hope that a sprinkling of mutual-aid pixie dust will solve our problems. But it should be possible to experiment with new forms of mutual aid.

For example, under current US regulations, it would be illegal for a mutual aid society to offer health-care coverage. A waiver system could allow such a group to provide coverage to gig-economy workers who lack a full-time employer yet would prefer to avoid Healthcare.gov.

It’s logical to bundle social services and other resources like training programs and child care. But there’s no reason the bundle needs to be attached to full-time employment, particularly as our labor economy evolves. And gig-economy workers shuttling between employers could also benefit from the collectivist spirit fostered by mutual-aid societies.

Like it or not, the gig economy is changing the way we work. That means it’s time to change the way we support our workers.