Ch. 15 Worker-Owned Cooperatives

"The more generous we are, the more joyous we become.

The more cooperative we are, the more valuable we become.

The more enthusiastic we are, the more productive we become.

The more serving we are, the more prosperous we become."

- William Arthur Ward

An idea gaining some traction here in the US, though not enough, is that of worker-owned cooperatives. Like the name suggests, workers are also the owners, and they operate in cooperation rather than competition with each other.

With regards to our conversation in the previous chapter about Community Wealth Building, this is a big part of Pillar 1. Inclusive and democratic enterprise. "Based on the recognition that the ownership of productive capital is at the heart of where power lies in any political-economic system." (democracycollaborative.org) 

Workers own the business and participate in its financial success on the basis of their contribution to the cooperative. They also have representation and vote for the board of directors, adhering to the principle of one worker, one vote (Whalley, 2023).

Worker cooperatives eliminate one of the major flaws of our current system: the division and inherent conflict between worker and owner. Since the workers are the owners, this stops a great deal of conflict before it even has a chance to form.

We’ve established that our current economic system is inherently anti-democratic. But in a worker-owned cooperative, democracy is the cornerstone of how the business operates. 

In most economic models, the CEO hires the managers, who hire the laborers. In the case of cooperatives, the workers pick and vote on candidates for executive and management roles.

Ever-increasing profit is not the primary motivation for a worker-owned cooperative, and therefore, it does not require the unsustainable infinite growth model. The workers themselves are the shareholders. The motivation becomes providing a living wage, pension, sustainability, and doing work that makes a difference in the world. Something the workers can be proud of. A legacy.

There are seven generally accepted principles that lie at the heart of every worker cooperative.

The 7 Cooperative Principles

1. Voluntary and open membership
2. Democratic member control
3. Members' economic participation
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperatives
7. Concern for community

While worker-owned cooperatives might seem like something brand spanking new, the truth is they’ve been around for a while in both concept and practice. In the United States, there are 612 Cooperatives with more than 4,732 workers (Khan, 2022). 

There are many different kinds of worker cooperatives, specifically because they are tailor-made to serve the workers who own them and the communities they serve. We can learn a lesson from each of them. 

Evergreen Cooperatives is one such teacher. These Cleveland based cooperatives partner with anchor institutions such as local hospitals and universities. (evgoh.com) These anchor institutions spend lots of money, frequently on out of state contractors to provide regular services like laundry, food service etc. Evergreen Cooperatives have put a strong focus on getting these big money contracts from local institutions in order to keep that spending within the community. One of the Evergreen collectives provides laundry service for hospitals and universities. 

These anchor institutions invest in the local collective business rather than outsourcing to an out of state enterprise. (Pillar 5. Progressive procurement) "local governments and place-based 'anchor institutions' should lead with procurement practices that re-localize economic activity." (democracycollaborative.org) 

With the Evergreen Cooperatives, a portion of the profits made from these contracts is then set aside for a "revolving fund" that is used to expand existing cooperatives and build new ones. That money is paid back into the fund, to be used and reinvested again. Evergreen also provides non-profit consulting where needed, in order to help these businesses be successful. (Both of these examples will come up later in the book.)

Worker-Owned Cooperatives often serve as a vehicle that marginalized groups and communities can use to dig their own way out of poverty and social and economic neglect. 

Wellspring Cooperative in Massachusetts is a worker-owned cooperative network, which includes a window restoration and furniture upholstery business that employs ex-inmates. Not only do the former convicts get a job and a fresh start, they get the opportunity to contribute to their community and its continued success. (wellspringcoop.org)

Cooperation Jackson emerged from the City of Jackson, one of the poorest US metropolitan cities, located in Mississippi, the poorest state in the union. "Cooperatives put capital (wealth) in the service of working people, rather than making working people subservient to capital." (cooperationjackson.org) 

Which leads us into Pillar 3 of Community Wealth Building - Fair work. "Every worker must receive a living wage and real power in and control of their workplace for decent work and conditions..." (democracycollaborative.org) 

These worker cooperatives allow communities who have been overlooked and left behind, to empower themselves and the people around them. And get a little bigger piece of that American Economic Pie. 

But worker cooperatives aren't always small. 

Most people have the idea in their heads that sure, these kinds of cooperatives work fine on a small scale, such as with a local business like a farmer’s market or a landscaping company. But are impractical for a large scale enterprise of the size that could actually make a difference... That notion couldn't be further from the truth. 

"The largest worker cooperative in the United States is Cooperative Home Care Associates (CHCA), a home care agency with over 2,000 workers based in the Bronx, New York." (institute.coop)

Land O' Lakes is a farmer-owned cooperative. "The cooperative has 1,959 direct producer-members, 751 member-cooperatives, and about 9,000 employees who process and distribute products for about 300,000 agricultural producers, handling 12 billion pounds of milk annually." (wikipedia.org) 

The idea that worker cooperatives are inherently small, with limited influence is simply incorrect. While there is certainly a limit to the size of an individual cooperative, based on market, location, customer base etc., there is no real limit to the size of a cooperative network. (More on this later.)

It's important to recognize that, for our purpose (to build a better economy and a better world) even a large worker cooperative is insufficient by itself. It needs support and it needs to be connected to a larger network. What starts as a relative handful of worker cooperatives networking together, over time becomes a robust cooperative economic sector. A competing economic sector, where consumers now have a choice to buy from for-profit extractionist businesses, and those that are owned by workers and build community wealth. 

Keep in mind, our purpose here is not simply to build new businesses. A better world doesn't arise from new businesses, no matter how economically fair and sustainable, or even how numerous. That better world emerges when we shift our culture. When We the People collectively value equity and fairness, principles over profits, and take ownership of our economic and societal well-being. 

So, how do we support these worker cooperatives and the communities that they serve? To begin with, in the next chapter we will talk about building a raft of Non-Profit Cooperative Services that can shore up and carry this new economy forward.