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Home TECH The organized labor movement has a new ally: the venture capitalists

The organized labor movement has a new ally: the venture capitalists

PEN America staff made the announcement in June: they were forming a union.

Like their co-workers at Starbucks stores and Amazon warehouses across the country, employees of PEN, a human rights and literary nonprofit, decided to form an independent union, unaffiliated with any of the dozens of major labor unions across the country. But in this case, there was a twist.

“We are so grateful to have been supported by @UnitUnionizing throughout this campaign,” union campaign leaders tweeted. “We have learned a lot from your organizers, legal advisors and communications experts!”

A startup backed by Silicon Valley venture capitalists, Unit of Work is an unlikely candidate for the role of champion of the labor movement. Its outside investors have made fortunes backing technologies like artificial intelligence, cryptocurrencies, and video games. One is one of California’s leading critics of public sector unions.

But these people accustomed to multimillion-dollar sales and IPOs see great opportunity in the atomized and restless condition of the American workforce and the possibility of transforming it through a new era of unionization. “We only invest in areas where we think we can get a return,” said Roy Bahat, head of Bloomberg Beta, the venture arm of billionaire Mike Bloomberg’s media empire.

Unit’s business model works like this: the startup’s organizers provide free consulting to groups of workers organizing unions within their own workplaces, helping them build support to win elections, advising them on strategy in bargaining sessions contracts, guiding them through the presentation of documents and on legal issues. Obstacles Once a contract is established, members of the new union can decide to pay Unit a monthly fee, similar to traditional union dues, to continue providing support.

Jamie Earl White, the founder of Unit, first got a taste of labor organizing as a graduate student at MIT, helping to organize a solidarity campaign with campus janitors who are pushing for better pay and working conditions.

After MIT, he co-founded and ran a medical device startup called Common Sensing. After stepping down as president in 2018, he considered his next move.

“There were a couple of areas I was interested in, like education and direct-to-consumer health care, where I thought we could subvert perverse incentives in the health care industry,” White said. “But what I kept coming back to was bringing my technological and organizational skills to the labor movement.”

Jamie Earl White, founder of the Work Unit

(Griffin Dolan)

The movement could use the help. Only 10.3% of American workers (nearly 16% in California) are unionized, down from a high of nearly 35% in 1954. In the private sector, only 6.1% of workers Americans are union members.

Yet 68% of Americans say they approve of unions, according to a 2021 Gallup poll. White believes that gap, along with the recent wave of unionization at Starbucks and other employers, reflects a situation where demand of the kind of workplace protections offered by unions outstrips what is offered by unions willing to help workers organize. Unit’s goal over the next decade is to restore private sector union density to 8.1%, a rate last seen. in 2003.

Some of the biggest unions, like the Service Employees International Union and the Communications Workers of America (the parent union of the NewsGuild, which represents workers at the Los Angeles Times), have pushed for a new organization. But a recent analysis published in the left-wing magazine Jacobin found that organized labor as a whole is sitting on its assets defensively rather than spending on organizing campaigns to grow its footprint.

White believed he could help swing the pendulum back by targeting workers who might not otherwise receive organizing resources from a major union and by creating better tools for organizers, who typically rely on a hodgepodge of technology platforms and software to run their campaigns. .

He contemplated going the traditional way and starting a nonprofit organization to help workers organize. But after talking to people at labor nonprofits, he concluded that “if the idea was to be able to turn around very quickly and cater to a lot of the interests of workers, including software, which is notoriously expensive to build, to be able to raise money quickly it was important.”

So he turned to tech investors.

Bahat led Unit’s $1.4 million pre-seed round. Bahat, a rare outspoken supporter of the labor movement among venture capitalists, has concluded that it is the best path to restore economic justice to the American economy. .

“Work has failed millions and millions of people in the US who have tried to work hard and have failed to provide a decent life for themselves and their families,” Bahat said, and “organizing is one of the ways where workers can demand more. “Recently he attended the Labor Notes conference in Chicago, a gathering of the left wing of the American labor movement, and will be speaking at an Aspen Institute roundtable on organized labor.

He sees Unit as a good investment, comparing its business model to the recurring revenue of software-as-a-service companies like Salesforce. “From my perspective as an entrepreneur, any time a community has a want that goes unfulfilled, there is an opportunity for business,” Bahat said.

One concern Bahat had was liquidity: Who would acquire a union-organizing startup, giving investors like him a payday? What would going public mean?

White’s solution is to plan a “community outing.” Once the company starts generating revenue, he plans to buy out its investors and give their capital to the unions he helped organize, effectively transferring corporate control to the customer base. “Financial investors fundamentally shouldn’t be part of the long-term economics” of Unit, White said, but they were the shortest route to seed funding.

The approach has attracted some strange bedfellows. The second investment firm in the round, Draper Associates, is led by Tim Draper, a third-generation venture capitalist, bitcoin evangelist and open critic of organized labor. Draper has publicly laid California’s ills at the feet of unions, and public sector unions in particular. in 2021, writing that “union bosses have taken over California schools from top to bottom, made it so there are fewer jobs, more homeless people, and people are fleeing the state for work,” launched a ballot initiative to ban unions from the public sector. in the state.

Tim Draper, at a web summit, smiles broadly

Tim Draper, founder of Draper Associates, which invested in Unit of Work

(Cody Glenn/Getty Images)

draper pulled the plug on the ballot measure in January, but has not changed his mind. “Unit of [W]Labor is decentralizing unions,” Draper wrote in an email explaining his investment. “That will be great. Centralized unions tend to restrict trade and government unions create a bloated bureaucracy and poor government service in general. Government unions are the antithesis of a free country. America is supposed to be run by the people. California is run by union bosses.”

White noted that none of Unit’s investors have a board seat and that they only control about a fifth of the company’s stock. “Roy is passionate about the job, Tim is passionate about a lot of things, including decentralized technology,” but ultimately both are looking for a return on investment and will be phased out of the company structure in the same way, he said. White.

Despite Draper’s enthusiasm for independent unions, as opposed to nationally affiliated labor organizations, Unit leaders and their website make it clear that they support their clients if they decide to join a larger union.

“We help people get started, and they can end up joining” once they’re organized, Megan McRobert, Unit organizing director and career labor organizer with stints at SEIU and the Writers Guild of America, East, said on her resume. .

“It’s really about getting more unions,” McRobert said. “People are ready to go. I had never seen so much labor organization and demand for resources. We want the tools to be more accessible, because no one has taught how to form a union.”

McRobert said she herself was skeptical about the venture funding model, but has been reassured by the lack of investor pressure on Unit’s work.

PEN America voluntarily recognized its workers’ union the day after its announcement, making it the Unit’s second organized workplace, after workers at Piedmont Health Services, a chain of community health clinics in North Carolina, won their union election in March with the help of Unit.

Unit said it is actively helping other workers organize, but those campaigns aren’t ready to go public.

Unit is still developing its tech tools for organizers, but it has a registration system where workers can request support in organizing their workplace and an ever-expanding organizing guide on its website. Technical support aside, PEN America workers are still going through the process any new union must go through: negotiating their first contract.


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