The organized labor movement has a new ally: venture capitalists

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

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

“We are very grateful to have been supported by @UnitUnionizing throughout this campaign,” the union campaign leaders tweeted. “We learned so much from their organizers, legal advisers and communication experts!”

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

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

The unity business model works like this: startup organizers provide free advice to groups of workers who are organizing unions in their own workplaces – helping them gain support to win elections, advising them on strategy during contract negotiation sessions, guiding them through paperwork and around legal hurdles. Once a contract is in place, 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, got his first taste of unionization as an MIT graduate student, helping organize a solidarity campaign with campus janitors demanding better wages 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 few areas that I was interested in, like education and direct-to-consumer healthcare, where I thought we could reverse the perverse incentives of the healthcare industry,” White said. “But what I kept coming back to was bringing my technical and organizational skills to the labor movement.”

Work Unit Founder Jamie Earl White

(Jacob Benton)

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

Still, 68% of Americans say they approve of unions, according to a 2021 Gallup poll. White thinks that gap — along with the recent wave of unionization at Starbucks and other employers — reflects a situation where demand for the kind of protections in the workplace offered by trade unions outweighs the supply of unions willing to help workers organize. The unit’s goal over the next decade is to restore union density in the private sector to an all-time high of 8.1% in 2003.

Some of the larger unions, such as 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 leftist 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 thought he could help push back the pendulum by targeting workers who otherwise wouldn’t receive the organizing resources of a big union and creating better tools for organizers, who typically rely on a mix -a hodgepodge of technology platforms and software to run their campaigns.

He planned to go the traditional route and start a non-profit organization to help workers organize. But after talking to people from non-profit labor organizations, he concluded that “if the idea was to be able to get up and running very quickly and get workers interested – including software, the building of which is notoriously expensive – being able to raise funds quickly was important.”

So he turned to tech investors.

Bahat led Unit’s $1.4 million pre-seed round. A rare strong supporter of the labor movement among venture capitalists, Bahat concluded that it is the best path to restoring economic justice to the US economy.

“Work has failed millions and millions of people in the United States, who have tried to work hard and have been unable to afford a decent life for themselves and their families,” Bahat said, and “ organizing is one of the ways workers can demand more.” He recently attended the Labor Notes conference in Chicago, a gathering of the left wing of the American labor movement, and hosts an Aspen Institute roundtable on organized labor.

He views Unit as a sound investment, comparing its business model to recurring revenue from software-as-a-service companies such as Salesforce. “From my perspective as a businessperson, whenever a community has a need that is unmet, there is an opportunity for business,” Bahat said.

One of Bahat’s concerns was liquidity: who would acquire a union startup, giving salaries to investors like him? What would it mean to go public?

White’s solution is to plan an “exit to the community”. Once the business begins to generate revenue, it plans to buy out its investors and donate their capital to the syndicates it helped organize, thereby transferring control of the business to the customers. “Financial investors basically shouldn’t be part of Unit’s long-term economy,” White said, but they were the shortest route to startup funding.

The approach attracted strange bedfellows. The second investment firm in the round, Draper Associates, is led by Tim Draper, a third-generation venture capitalist, Bitcoin Evangelist and virulent criticism of organized labor. Draper has publicly laid California’s ills at the feet of labor unions, and public sector unions in particular. In 2021, writing that “union bosses have taken California schools from top to bottom, they’ve made sure there are fewer jobs, more homelessness, and people fleeing the state for work,” he quipped. a ballot initiative to ban public sector unions 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 did not change his mind. “Unit of [W]ork makes unions decentralized,” Draper wrote in an email explaining his investment. “That will be great. Centralized unions tend to restrict trade, and government unions create bloated bureaucracy and poor government service overall. Government unions are the antithesis of a free country. The United States are supposed to be run by the people. California is run by union bosses.”

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

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

“We help people get started, and they can eventually join” once they’re organized, said Megan McRobert, director of unit organizing and a career union organizer with stints at SEIU and at the Writers Guild of America, East, on his resume.

“It’s really about getting more unions,” McRobert said. “People are ready to go. I have never seen so much unionization and demand for resources. We want to make the tools more widely available, because no one has learned how to form a union.

McRobert said she herself was skeptical of the venture capital funding model, but was 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 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 was actively helping other workers organize, but those campaigns are not ready to go public.

Unit is still developing its technology tools for organizers, but has a registration system where workers can request help organizing their workplace and an ever-expanding organizing guide on its website. Regardless of technical support, PEN America workers still go through the process that every new union must face: negotiating their first contract.

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