JUDY WOODRUFF: Now, another in our series of stories about people hard hit by hard times. Tonight, the story of freelancers in search of a safety net. NewsHour correspondent Spencer Michels reports.
SPENCER MICHELS, NewsHour correspondent: Jaime Hazan designs Web sites for the United Nations and is a portrait photographer. Jeff Hinton does post-production sound-mixing. Jared Levy is a cameraman, editor and documentarian.
All these self-employed workers have one thing in common: They need health insurance in order to stay freelancers in their fields. Levy, a 2008 graduate of Syracuse University, is taking a different path than many of his classmates. He is pursuing his passion.
JARED LEVY, freelance cameraman/editor: In the beginning, I had to win over my parents, in the sense of my dad’s a lawyer and my mom is a speech pathologist. The hammer started coming down on, “You need to get a salary job, because you need the benefits that come with a salary job, and that’s the bottom line.”
SPENCER MICHELS: In order to get those benefits, Levy, along with more than 100,000 other independent workers, joined the Freelancers Union.
But it is not your typical union. Unlike other fledging trade unions, it does not negotiate salaries nor retirement benefits and thus has not met resistance from employers. What it does do is provide contract workers the support they need to be self-employed, most importantly, health insurance.
JARED LEVY: I checked it online. And it was like — my jaw dropped, because I didn’t realize it was the biggest burden off my shoulders, period, because it finally allowed me to do what I wanted to do, plain and simple.
A new kind of union
SPENCER MICHELS: The Freelancers Union is the brain child of New York labor organizer and attorney Sara Horowitz. She says she has labor activism in her blood.
SARA HOROWITZ, founder, Freelancers Union: And so this is my father, my mother, and my father was a union-side labor lawyer. And his parents -- this was my grandfather, and he was the vice president of the International Ladies' Garment Workers Union.
SPENCER MICHELS: With this breeding and background, Horowitz worked for years with regular unions. But in 1995, she noticed more and more people were becoming independent contractors rather than salaried employees, and they had no safety net to rely on. She started to talk to people about a new kind of union.
SARA HOROWITZ: A union is really a way for people to come together to solve their problems and a way to have a business model that is independent of government and foundations. And so unionism is recognizing that we've really gotten to a point where, for many of the workforce -- in fact, a third of the workforce -- they're as unprotected as workers were after the Civil War. And we need to start building this next safety net.
SPENCER MICHELS: So she became a social entrepreneur, raising money from various foundations to start what is now one of the fastest-growing unions in the country.
Membership is free to all freelancers, including consultants, independent contractors, temporary and part-time workers, and those who are self-employed.
Horowitz's biggest challenge was how to offer her members affordable health insurance.
SARA HOROWITZ: I had no background in health insurance, nor did I particularly have any interest in it. And I thought, "Well, how hard could this be?"
So, started on this learning journey of trying to get affordable health insurance for a group of freelancers. And so, in putting together the I.T. infrastructure, the communications, the database, we were able to start imagining what the model would be and structure would be of the next new deal.
And by that, I mean that benefits and rights have to stay with the individual. And as the individual goes from project to project and job to job, they keep them with the person.
Union as insurance provider
SPENCER MICHELS: At first, the union contracted with commercial carriers. This winter, frustrated with rising premiums, the union decided to act as its own insurance provider in its home base of New York.
To make it happen, it drew on $17 million of grants and loans provided by a coalition of philanthropies and businesses. Depending on the size of the deductible, the individual cost of the insurance ranges from $140 to $455 per month.
Members can also buy dental, disability, and life insurance. The union will offer a retirement plan, as well.
In 50 states, the union still works with other providers.
Besides insurance, the union helps its members navigate the freelance life, with networking opportunities and online and in-person seminars.
LECTURER: Although you can call them deductions, they are technically adjustments.
SPENCER MICHELS: On this snowy evening in January, more than 50 members gathered in the basement of a Brooklyn apartment building to learn how to fill out their tax forms. Horowitz first asked them how the current economy was affecting them.
SARA HOROWITZ: How many people just now in February 2009 are feeling like they're doing worse than they were doing last February? So hands up for worse. Hands up for about the same.
And so now, what about the people that are doing worse? What's going on with you? Anybody who wants to talk about that?
FREELANCER: Previously, I might be able to have, say, a six-month contract as an independent contractor working in-house for a publishing house. And now it's much more a week-long project, and then famine, and then sudden business and famine.
SARA HOROWITZ: The thing that I am the most concerned about is that, as we are in this economic crisis, if we don't work on these issues and measure and take care of a third of the workforce, we are going to come out of here as an economy that has a terrible distribution of income.
I view this as, we are a player, along with many other groups, in building this next safety net, to build a middle class that's going to keep this country as a strong democracy and a strong economic democracy.
Freelance union still evolving
SPENCER MICHELS: Jaime Hazan says the union has allowed him to become an accomplished freelancer. Self-employed for the last 10 years, he has been able to develop two careers.
JAMIE HAZAN, freelance Web designer and photographer: I'm very grateful for what Sara Horowitz built, because if it wasn't for what she did, I can honestly tell you, I don't know where I would have gone to get insurance. I really don't.
Because before I found the Freelancers Union, I didn't have insurance. I just -- I winged it. But she just deserves a lot of credit for what she did, because, I mean, where in the world would I get disability insurance these days? I mean, where would I go? I don't even know.
SPENCER MICHELS: But for the independent stylist Athena Dugan, the Freelancers Union does not provide her the safety net she needs. Feeling the effects of the current economic downturn, she cannot afford the union's insurance plan. She wants more guidance, as well.
ATHENA DUGAN, freelance stylist: I'd like to see them work more on an individual basis, because freelancing is individual, you know? And it would be great to do some -- to have them focus on some Freelance 101, you know. And I feel like they hit a middle mark, but don't address the freelancer that's up and coming or just to keep it consistent, so I would love to see that.
SARA HOROWITZ: Well, I actually don't see that as a criticism. Again, it sort of goes to the learning piece. What I would want to know is, what are the next things that we should be working on?
But, you know, what it does is, it makes me go back and say, "Well, then what should we be doing? How do we work harder?" How do we hear that and not say, "They're wrong"? They're not wrong. They are working without a safety net. We are doing our best. We will be making mistakes. We're not doing it as fast. I wish I could 10 more things, you know, in the quickest time. But, no, I welcome that.
LECTURER: Lines 23 through 37, where it says adjusted gross income in the margin...
SPENCER MICHELS: As layoffs have increased, the union has grown. More than 3,000 workers joined in the last month alone.