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The Organized Labor Movement Has a New Ally: Venture Capitalists (yahoo.com) 52

Posted by EditorDavid from the which-side-are-you-on dept.
Union-organizing startup "Unit of Work" received a $1.4-million pre-seed investment led by the venture capital arm of billionaire Mike Bloomberg, reports the Los Angeles Times.

The startup's outside investors "have made fortunes backing technologies such as artificial intelligence, cryptocurrencies and video games. One is among California's foremost critics of public-sector labor unions." But the head of the startup's lead investment firm says that "whenever a community has a want that's going unfilled, there's an opportunity for companies." [T]hese people used to multibillion-dollar sales and IPOs see a big opportunity in the atomized, restive condition of America's 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 contract-bargaining sessions, guiding them through paperwork filings and around legal obstacles. 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 keep providing support.... Once the company starts earning income, it plans to buy out its investors and give their equity to the unions it helped organize, effectively transitioning corporate control to the customer base.

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 outspoken critic of organized labor... [H]e launched a ballot initiative to ban public-sector unions in California.... "Unit of Work is making unions decentralized," Draper wrote in an email explaining his investment. "That will be awesome. Centralized unions tend to restrain trade, and government unions create bloated bureaucracy and poor government service on the whole.... "

Despite Draper's enthusiasm for independent unions, as opposed to nationally affiliated labor organizations, Unit's leaders and its website make clear that they support their clients if they decide to affiliate with a larger union.
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The Organized Labor Movement Has a New Ally: Venture Capitalists More

The Organized Labor Movement Has a New Ally: Venture Capitalists

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  • Hmm (Score:1)

    by Anonymous Coward

    Ally, or just a smart investment?

  • ROI? (Score:4, Insightful)

    by usedtobestine ( 7476084 ) on Sunday August 14, 2022 @02:06PM (#62789074)

    How do you generate ROI if you invest in a labour union? Do you call for a strike every 5 weeks because you aren't making your money back quickly enough?

    • Re: ROI? (Score:4, Interesting)

      by dknj ( 441802 ) on Sunday August 14, 2022 @02:51PM (#62789228) Journal

      You destroy unioned businesses and then create a non-unionized clone which operates at a fraction of the cost. See BoltBus (popular bus service serving the north east and their sister companies) vs Greyhound as a great example of this. Bolt Bud costs $20 or something ridiculously cheap vs greyhound which costs $50 and up for the same route.

      If you see billionaires behind a seemingly hood idea for the "little people" just assume there is an ulterior motive

      • I totally agree with your sentiment; a deal with the financial elite is always a deal with the devil. Unfortunately your example is a little bit funny given that Bolt Bus is created and owned by... Greyhound. It was created because Chinatown buses was handing them their ass when traveling between the major cities in the NE. https://en.wikipedia.org/wiki/... [wikipedia.org]

        • BoltBus donâ(TM)t have unions

          • BoltBus donâ(TM)t have unions

            Starting a non-union subsidiary is a common strategy for a company being strangled by high-labor costs. Then they can either shift more and more business to the subsidiary or threaten to do so to squeeze concessions from the union.

            • Re: (Score:1)

              by pbasch ( 1974106 )
              I will rephrase that for you: Starting a non-union subsidiary is a common strategy for a company that prefers to channel its revenue to its executives rather than its workers. Since executives make this decision, it is not a surprise. It was an unusual time in history when the US government was on the side of unions, and it created a vast middle-class. That started to crumble in the 70s and is well on its way to re-creating the 1890s, with a vast sea of poor and tiny islands of very rich, and a small middle

      • Knowledge is power. If you can provide bargaining insight to labor, you can also provide insight to the businesses.

        Business motives are always to generate income, but sometimes it's generating knowledge that can be sold.

        Unions are notorious for mismanaging negotiations, there is an opportunity there for improvement but the only monetary reason to do so isn't going to come from labor itself. I want to think that Unit of Work started with a good idea, to inform that bargaining process and organize labor,

    • You provide sufficient service to your members that they remain convinced that your $10/month is a good insurance premium against, for example, arbitrary dismissal. It doesn't need to be someone in your workplace, or necessarily in the same company - if they're in the same union and (say) an unfair dismissal is reversed with compensation, or a pay rise is negotiated, then the union can crow about it to their members to convince them that continuing to pay dues is sensible.

      I always used the analogy of fire

      • Re: (Score:2)

        by poptix ( 78287 )

        The average union dues are between 1.5-4% of gross pay.

        To someone making $18/hr (a common starting wage around here in the Midwest) that's $43-115/mo.

        • As your answer indicates, that varies from union to union, and probably from workplace to workplace. And also from country to country. (Varying dues from workplace to workplace is probably illegal here, but that doesn't mean it's illegal in America.)

          What is your monthly health insurance fee - even if it's taken off before the pay packets are filled? In an American context, one service that a union could plausibly offer is (member's) family health insurance as part of the membership deal, while a case (invo

  • Hyper-growth unicorn unions (Score:3)

    by OrangeTide ( 124937 ) on Sunday August 14, 2022 @02:06PM (#62789082) Homepage Journal

    VCs aren't going to be into this shit unless they can scale UaaS (unions-as-a-service) to billions of users.

  • says Pinkerton Detective Agency, whose shares grew 24% on the news.

  • Just what I need... (Score:4, Insightful)

    by AmazingRuss ( 555076 ) on Sunday August 14, 2022 @02:12PM (#62789100)
    ... more corporate motherfuckers trying to peel off some of the income from my labor.

  • Ally? (Score:4, Interesting)

    by splutty ( 43475 ) on Sunday August 14, 2022 @02:25PM (#62789146)

    A VC firm is NEVER. EVER. Your Ally.

    "Oh yeah, this leech is an ally, it keeps part of my blood in storage, just in case."

  • The word is leech, not ally.

  • HOA (Score:3)

    by phantomfive ( 622387 ) on Sunday August 14, 2022 @02:30PM (#62789162) Journal

    Sounds like an HOA.

  • This is just run of the mill union busting (Score:5, Insightful)

    by rsilvergun ( 571051 ) on Sunday August 14, 2022 @02:31PM (#62789168)
    The goal here is to take control of the emerging labor unions early on so you can set their agendas and continue to keep wages low and corporate profits high.

    As an added bonus treating it like an investment means you can write your union busting activities off your taxes.

    Back when the unions were first forming businesses did this to forming competing fake unions to try and draw away workers. One of the reasons why we have a raft of weak trade unions is because businesses wanted to keep the various trade unions fighting among themselves. It was also useful for keeping minorities out of the unions or in their own unions.

    The goal is always the same: divide and conquer. The goal is to keep people who work for a living at each other's throats at all times and to keep us living paycheck to paycheck so we can't think long-term. That way people who own stuff for a living can take all the stuff because no amount of stuff and no amount of power is ever enough someone that greedy
    • No way! Everyone knows that billionaires are philanthropists. It says so in the media. They'd never do anything to undermine their workers & make them accept unfair terms & conditions.
      • Will swear up and down that Bill Gates is the bee's knees because he gives away so much money.

        There is a lot wrong with that. For starters received or forgotten what kind of man he is despite everything we learned in the '80s, 90s and 2000s when he was running Microsoft.

        There's also the fact that he has more money now than when he started giving it away clearly lying about giving it all.

        He also prevented one of the covid vaccines from going into the public domain so he could profit from it. It w
        • OK, sorry. Poe's law. I was being facetious.
          • I figured you were being facetious but it's shocking how many people will step up to defend billionaires. One of the surest fire ways to get modded down here is to speak ill of our Lord and savior Elon Musk. To be fair I think that's because there are bots searching for posts with his name. That seems a little extreme but I have noticed if I avoid his name in a thread and use pseudonyms like phony Stark my posts don't get modded down the same way. Although that could just be changing sentiments due to his p
            • ..and you don't think that Marvel comic superheroes are the embodiment of American exceptionalism? The only real masked avengers in the USA carry burning crosses.
        • I wanna be nice about this but you're really bad at coherent thought and could use some focused improvement.

  • Big labor has always been about amassing power and influence. Just like the capitalism it claimed to fight on behalf of the little guy.

  • The Organized Labor Movement Has a New Ally: Venture Capitalists

    No, its the same old ally. Democratic politicians running for high political office. This one just happens to have extra billions that he can throw away again, err - excuse me, devote, to his political campaign. He's not buying influence and support from the unions, honest, he's not. Just like the unions are not buying support when they buy some dipshit politician's book. Did you ever wonder why so many such books get written? They are a dodge around campaign contributions. Same thing here, Bloomberg is get

    • After how he fared in 2020 if he is really considering another campaign he must have a real masochist streak.

      • Re: (Score:2)

        by drnb ( 2434720 )

        After how he fared in 2020 if he is really considering another campaign he must have a real masochist streak.

        Maybe he's going for NY governor or senator.

        • Yeah I guess he could but I don't know after that. It didn't even just sputter out but he had a case of spritual depantsing, you don't come back from that even in NY state, not at 80, just enjoy your billions.

    • no reason this guy has to even make it to the general. Register blue and vote in the primary. If you're an open primary state you don't even need to register.

  • We used to call it corruption (Score:1)

    by Anonymous Coward

    Remember when the mob ran the unions and skimmed dues? Now VCs want to do it. People who favor unions sing the common refrain of "they gave us the 40 hour work week and got rid of child labor". They omit that those were the unions of 100 years ago that were more like a labor party than a modern union. They were ad-hoc, grass roots, and didn't necessarily require you to be a dues-payer to gain benefits, because they engaged in political action. The early 20th century saw that kind of action which was *a

  • New Ally: Venture Capitalists (Score:3)

    by EvilSS ( 557649 ) on Sunday August 14, 2022 @04:03PM (#62789466)
    "New Ally: Venture Capitalists " HAHAHAHAHAHAHAHAHA if you believe that I have some NFTs to sell you.

  • Lenin quote (Score:4, Interesting)

    by manu0601 ( 2221348 ) on Sunday August 14, 2022 @05:02PM (#62789610)
    Didn't Lenin say something about capitalists being able to sell the rope for hanging them?

  • There are some big-money players embracing ESG. It's getting some folks riled up [pionline.com]. The "new" corporate VC elite has made some enemies in common with labor unions and may be seeking an alliance for that reason alone.

    Or they're just looking to skim union dues. Possibly both.

  • VC invest with intent to get a return. They see a trend with more unions forming, so they see a potential in taking a cut of the union due revenue stream. There can definitely be good money in it. US union annual dues from just the major unions were over $10B in 2019 alone: https://laborpains.org/2021/01... [laborpains.org]. With the recent union forming trend, that number will be even larger, perhaps $20B per year? $1.4M investment to try to capture even 1% of the union dues market size seems like a good gamble for VC's. T
  • Invest where ever there's a buck to be made.
  • Back in the olden days at the dawn of the labor movement, companies would hire thugs and criminals to break strikes. The striking workers saw that these thugs were from their neighborhoods, so they approached them, expecting some solidarity. The criminals made the same calculation as their spiritual heirs, venture capitalists: Sure, we'll stop breaking you up, just give us a piece of the action. Peace between labor and management was brokered and all was well, as long as the Mafia and its friends got their

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