Hello r/Cooperative!

We’re thrilled to introduce the InterCooperative Network (ICN), a visionary project designed to empower cooperatives, community organizations, and grassroots movements through cutting-edge blockchain technology. Our mission is to build a decentralized platform that strengthens cooperative principles, fostering a more democratic, transparent, and resilient ecosystem.

What is the ICN?

The InterCooperative Network (ICN) is a decentralized platform developed specifically for cooperatives. It provides the essential tools needed for democratic governance, secure data management, and seamless resource sharing, addressing the unique challenges that cooperatives face in today's digital landscape.

Key Features of the ICN:

• Global Connectivity: A decentralized platform that connects cooperatives across geographic and sectoral boundaries, facilitating collaboration and mutual support.
• Democratic Governance: Scalable governance models that empower members at every level, from local cooperatives to global federations.
• Data Sovereignty: Ensuring secure and sovereign control over data and digital identities, so cooperatives and their members retain ownership of their information.
• Collective Action: Tools that enhance the ability of cooperatives to engage in political and social advocacy, amplifying their voices in the public sphere.

Get Involved:

1. Explore the Project: Visit our temporary site at ICN Project to dive deeper into the ICN's vision, architecture, and what we aim to achieve.
2. Check Out the Code: The ICN is an open-source project! You can explore our codebase and contribute to its development on GitHub: ICN Repository.
3. Read the Whitepaper: For a comprehensive overview, including our technical architecture, governance model, and economic strategies, take a look at our detailed whitepaper: ICN Whitepaper.

Why the ICN?

In a world where traditional digital platforms are often designed for hierarchical corporations, cooperatives need an alternative that reflects their values of democratic control and member ownership. The ICN fills this gap, offering a blockchain-based platform that prioritizes cooperation over competition.

• Proof of Cooperation (PoC): A unique consensus mechanism that rewards collaboration rather than competition, fostering a cooperative spirit within the network.
• Multi-Dimensional Reputation: A nuanced reputation system that reflects various aspects of cooperative participation, from project contributions to governance involvement.
• Privacy-Preserving Technology: Advanced authentication methods that protect member privacy while ensuring security and trust within the network.

Join Us!

Whether you're a cooperative looking to connect with a global network, a developer eager to contribute to an innovative open-source project, or an individual passionate about building a better future, the ICN welcomes you. Together, we can redefine the future of cooperation, creating an economy that works for everyone.

Contact Us:

If you have any questions, ideas, or would like to get involved, please reach out to us at intercooperativenetwork@gmail.com. We're eager to collaborate with like-minded individuals and organizations!

Let’s build the future of cooperation together. 🌱

Looking forward to your thoughts and feedback!

#ICN #Cooperatives #Blockchain #Decentralization #OpenSource #SocialJustice

Useful Links:

• Temporary Site
• GitHub Repository
• Whitepaper

For additional information or to explore the structure and code contents of the ICN, feel free to check out our documentation or contact us directly.

Source: NCBACLUSA

Worker cooperatives are a growing trend in many countries. It is commonly said that the mighty trio of Italy, Spain, and France contain the largest sectors, but there are also other countries with substantial amounts, such as India and Argentina.

The continent of Asia has by far the largest number of worker-members, with over 8.5 million, according to CICOPA's Cooperatives and Employment Second Global Report published in 2017.

Calculating the average number of workers per WC in each of Spain, Italy, and France yields approximately 18, 17, and 25, respectively. If we assume every worker cooperative has an average twenty worker-members, this would mean there could be as many as 400,000 worker cooperatives in Asia. Unfortunately, figures for many Asian countries are scarce, so this is just guesswork for the time being.

Asia: 8,573,775 ÷ 20 = 428,689

Europe: 1,554,687 ÷ 20 = 77,734

Americas: 982,285 ÷ 20 = 49,114

Europe has the second most worker-members with 1.5 million. With similar guesswork, this could translate to more than 75,000 worker cooperatives in Europe. Italy and Spain already account for over 50% of this number, so it does not seem out of the realm of possibility. Somewhat importantly, it is the case that many non-member employees work at worker cooperatives, and so these predicted figures may be slightly higher depending on the proportion of employees that are non-members. For example, if the average employment of a WC firm is 20, and 5 are non-members, that would mean that we divide the number of worker-members by 15 instead of 20, which would yield a higher amount.

8,573,775 ÷ 15 = 571,585

1,554,687 ÷ 15 = 103,646

982,285 ÷ 15 = 65,486

The Americas is recorded to have nearly 1 million worker-members, and guessworking again would yield about 49,114, or 65,486 when dividing by 15. Adding the low and high figures together results in 555,537 worker cooperatives on the lower end and 740,717 on the high end. This could mean worker cooperatives are more common than one might think, and this can be especially true when considering that the CICOPA report lacks data on a few dozen countries, and that there are quite a few businesses that operate like a worker cooperative, but may be a conventional business on paper.

There are large numbers of cooperatives in many African nations, which hints at there possibly being quite a few of the worker type. Adding the number of cooperatives in only Kenya, Uganda, and Morocco already amounts to over 60,000 cooperatives. In Oceania, New Zealand receives 20% of its GDP from cooperatives and was named the world's most cooperative economy by the UN in 2014. Cooperatives are also widespread in Australia, with a majority being members of a cooperative. These are signs that both Africa and Oceania may have a substantial number of worker cooperatives that studies have not yet reported.

Note: Multi-stakeholder cooperatives exist that may have multiple different groups as members. For example, Eroski is a multi-stakeholder food chain in Spain where both workers and customers are members. While this isn't exactly the same as a full worker cooperative, it still has worker-members, so some (likely a relatively smaller portion) of the WC figures calculated above may contain multi-stakeholder cooperatives to varying degrees. Nonetheless, the calculated numbers suggest large numbers of cooperatives containing worker-members in Asia, Europe, and the Americas.

The table records the number of worker cooperatives by country based on studies and reports.

Data is subject to change based on new information.

Cooperatives are enterprises owned and operated by their members, functioning on democratic principles. This organisational model offers workers, consumers, producers, and other stakeholder groups a voice in the economic decisions impacting their livelihoods and communities. While some may argue that democracy in business can lead to inefficiencies and frequent failures, empirical data points affirm that cooperatives are generally resilient and display survival rates that match or exceed those of conventional businesses.

°Worker Cooperatives' Survival Rates Only

*Consumer Cooperatives' Survival Rates Only

^Forestry Worker Cooperatives' Survival Rates Only

"Agricultural Producer Cooperatives' Survival Rates Only

°°Community Shop Cooperatives' Survival Rates Only

**Worker-Shareholder Cooperatives' Survival Rates Only

``Student Consumer Cooperatives' Survival Rates Only

Alberta: 63% figure retrieved from Canada's government website.^([CA Gov])

A 2005 report from Germany showed that 1% of businesses were declared insolvent, while the figure for cooperatives was less than 0.1%.^([ILO 2])

A 2014 study comparing hazard rates of labor-managed and conventional firms showed a 29% lower hazard/failure rate for LMFs relative to CFs. The study observed data points from 1997-2009.^([Burdín])

A 1988 study of the "death" rates from all sources, including dissolution and conversion to capitalist firms, showed that the relative rates in France were 6.9% for labor-managed firms and 10% for capital-managed manufacturing firms; in the U.K., 6.3% for labor-managed firms to 10.5% for all industries.^[Schwartz]

A 2012 report on data from Spain and France provides an overview of resiliency of worker cooperatives in the wake of the 2008 economic recession. In 2008, France's worker cooperative workforce saw a 4.2% increase while conventional businesses experienced a 0.7% decline.^[Roelants]

A 2018 study of cooperative vs. corporate businesses examines survival rates in the French wine industry, finding that cooperatives survive longer than corporations. The wine cooperatives display the ability to adapt and react to the market.^[Valette]

A 2019 study on cooperative and non-cooperative banking institutions found that the co-op banks were more robust and resilient during economic crises. The relative resistance of cooperative banks comes from a greater insulation to the market.^[Bazot]

A 2012 study analyzes associated labor cooperatives (Cooperativas de Trabajo Asociado - CTA) in Columbia and their relative survival to business associations. It is discovered that CTA workers display more intense effort at work, and therefore productivity, and that the CTAs had higher rates of survival.^[Melgarero]

A 2021 report on worker cooperatives in the United States presents data relating to the pandemic. In 2020, 28% of U.S. small businesses lost over 50% of their revenue, while only 20% of U.S. worker co-ops lost over half of their revenue. While there was a 44% drop in revenue in 2020 relative to 2018, total hours worked only dropped by 9% within worker cooperatives.^[DAWI]

Several more data points are yet to be added to the table (3/5).

............

Why are cooperatives resilient?

The answer can depend on the kind of cooperative one observes, but in general, every co-op is founded upon democratic principles and member control. Democratic structures and systems tend to be more stable, whether we're talking about firms or nations. When individuals have a tangible influence on leadership positions and the direction of the organisation or country, they feel included and empowered. Through democratic means, people are able to voice their greivances in a productive and non-violent way, reducing potential conflicts. And when leaders are corrupt and inept, democracy allows for the peaceful removal and replacement of these individuals by popular vote.

Under feudal and monarchic systems, leaders were usually born into power, or they usurped it by force through violence and war. There were no elections to select these individuals. Many were terrible to their people, authoritarian and violent, and have even lead their states to disaster and disintegration. Without a system to peacefully remove inept and self-serving leaders, these states were doomed by kings, queens, and monarchs that often lacked the basics to lead a country. Ivan the Terrible, Nero of Rome, and King John of England are just a few examples of the instability and authoritarianism that unelected leaders can bring.

Democracy gives the people the ability to peacefully have their voices heard. In historical authoritarian societies, the people often had to take up arms and fight if they wanted to make change. This leads to societal instability and suffering/death, and there are countless historical examples of this, such as the French and Russian Revolutions against authoritarian governments. In contrast, democratic societies have seen a significantly lower rate of violent revolutions and are more stable as a result. The ability to peacefully influence society is a great mitigator of violence and revolution. A study analyzing data from 122 developing states corroborates this view, stating that democracies are more likely to be politically stable (Tusalem 2015).

In the context of the cooperative firm, democracy also tends to have a stability effect. Managers and the board may be electable positions in a democratic organisation, allowing for members to have a voice in decisions. Inept leaders may be replaced when necessary to ensure the firm remains viable and productive. If members in an undemocratic business wanted change, their options would be closer to things like a strike or protest, which may negatively impact the firm's productivity and cause conflict in general. A democratic workplace tends to have less worker strike activity precisely due to the fact that there is a tangible democratic structure that can be utilised to influence decisions in the organisation, relegating the idea of a worker strike to more of a last resort.

Another large factor in the resilience of cooperative enterprises is a concept called the psychology of ownership. In essence, people tend to take better care of the things they feel that they own, and this idea applies to the ownership of businesses. The members of a co-op are also the owners, eliciting these feelings of ownership over not only the organisation itself, but also its goals and missions. This can lead to an increase in motivation, commitment, and engagement. In a worker-owned co-op, this could mean that a worker goes the extra mile in a workday to take care of their business. Studies show that this has positive impacts on productivity and commitment.

In recent times, cooperatives have shown resilience to the COVID-19 pandemic. Their organisational structure and governance practices contribute to this resilience (Billiet 2021). Cooperatives, through its centrality of user-members, form mutually beneficial relationships. Since this form of organisation is governed by democratic means, members' voices influence decision-making and increase created value for the members as a result. In contrast, a conventional business typically focuses on maximising profit, which may or may not maximise the use value for consumers. In many cases, it decreases value to consumers, such as in the case of the highly addictive drug oxycontin being pushed as 'safe', resulting in the deaths of thousands of people, all in the pursuit of profit.

Here is a collection of sources, including several metastudies, that elaborate in empirical terms the facts on worker cooperatives.

............

Sources

Balta: Co-op Survival Rates in Alberta. Richard Stringham, Celia Lee. August 2011.

Vieta: Workers’ Self-Management in Argentina: Contesting Neo-Liberalism by Occupying Companies, Creating Cooperatives, and Recuperating Autogestión (pp.115-117). Marcelo Vieta. 1 November 2019.

Cera: More cooperatives than other businesses survive. Cera. 24 July 2018.

Ku Lueven: Belgian Cooperative Monitor 2021. Ku Lueven. 2021.

Balta 2: Co-op Survival Ratea in British Columbia. Carol Murray. June 2011.

Richards: Status of Co-operatives in Canada: Report of the Special Committee on Co-operatives. Blake Richards, M.P. Chair. September 2012. 

Pérotin: Early Cooperative Survival: The Liability of Adolescence. Virginie Pérotin. July 2004.

CECOP: Business Transfers to Employees under the Form of a Cooperative in Europe: Opportunities and Challenges. CECOP. June 2013.

Oxford HB: The Oxford Handbook of Mutual, Co-Operative, and Co-Owned Business (pp.579). Jonathan Michie, Joseph R. Blasi, Carlo Borzaga. 30 March 2017.

CECOP 2: Best result in 6 years for the creation of worker cooperatives in France. CECOP. 18 June 2014.

ILO: Job preservation through worker cooperatives: An overview of international experiences and strategies. International Labour Organization. 8 October 2014.

UM: Well-being in the workplace: what if SCOP had figured it out? Université de Montpellier. Claude Fabre, Florence Loose. 6 July 2023.

CICOPA: Workers buy-out: 30 years creating wealth in Italy. CICOPA. 9 July 2015.

Euricse: The Italian Road to Recuperating Enterprises and the Legge Marcora Framework: Italy’s Worker Buyouts in Times of Crisis Scientific. Euricse. Marcelo Vieta, Sara Depedri, Antonella Carrano. 30 March 2017.

Antonazzo: Narratives of cooperation, resilience and resistance: workers’ self-recovery in times of crisis. Luca Antonazzo. 2019.

Whyte: Making Mondragon: The Growth and Dynamics of the Worker Cooperative Complex. William Foote Whyte, Kathleen King Whyte. 1 January 1988.

Co-op Law: Worker Cooperatives: Performance and Success Factors. Co-op Law. 22 October 2014.

WTFY19: Working Together Fiscal Year 2019. NYC Small Business Services. 2019.

Monteiro: Scale, Scope and Survival: A Comparison of Cooperative and Capitalist Modes of Production. Natália Pimenta Monteiro, Geoff Stewart. 20 May 2015.

MEDIEQ: Survival Rate of Co-operatives in Québec. 2008.

CA Gov: Survival Rates of Co-operatives in Québec. Government of Canada. Lise Bond, Michel Clément, Michel Cournoyer, Gaétan Dupont. 1999.

UK Coop: Co-operative Business Survival. Co-operatives UK. 2019.

UK Coop 2: Co-op Economy 2019. Co-operatives UK. 2019.

UK Coop 3: Co-op Economy 2020. Co-operatives UK. 2020.

UK Coop 4: Co-op Economy 2021. Co-operatives UK. 2021.

UK Coop 5: Co-operative and Mutual Economy 2023. Co-operatives UK. 2023. 

UK Coop 6: Co-operative and Mutual Economy 2024. Co-operatives UK. 2024.

Study: An empirical analysis of cooperative creation, survival compared to capitalist firms and survival between different co-op types in the United Kingdom. May 2020.

Plunkett: Community Shops: A better form of business. Plunkett Foundation. 2014.

Institute: 2019 Worker Cooperative State of the Sector Report. Democracy at Work Institute. 2019.

Grashuis: Agricultural firm survival: The case of farmer cooperatives in the United States. Jasper Grashuis. 15 November 2018.

CA Gov: Canadian New Firms: Birth and Survival Rates over the Period 2002–2014. Government of Canada. May 2018.

ILO 2: Resilience of the Cooperative Business Model in Times of Crises. International Labour Organization. Johnston Birchall, Lou Hammond Ketilson. 10 June 2009.

Burdín: Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay. Gabriel Burdín. 1 January 2014.

Schwartz: Where Did Mill Go Wrong?: Why the Capital-Managed Firm Rather than the Labor-Managed Enterprise Is the Predominant Organizational Form in Market Economies. Justin Schwartz. 1 May 2012.

Roelants: The resilience of the cooperative model. Bruno Roelants, Diana Dovgan, Hyungsik Eum, Elisa Terrasi. June 2012.

Valette: Cooperatives versus Corporations: Survival in the French Wine Industry. Justine Valette, Paul Amadieu, Patrick Sentis. 15 May 2018.

Bazot: Les banques coopératives sont-elles plus résistantes ? Étude comparative des banques coopératives et non coopératives de 2005 à 2014. Guillaume Bazot, Esther Jeffers, Ouafa Ouyahia. 2019.

Melgarejo: La supervivencia de las Cooperativas de Trabajo Asociado en Colombia: una aproximación teórica. Melgarejo, Vera-Colina, Riapira. July 2012.

DAWI: 2021 State of the Sector: Worker Cooperatives in the U.S. Democracy at Work Institute. 2021.

Last updated 23 Oct 2024

Richard Wolff is one of the most prominent advocates for worker cooperatives. He went to Harvard, Stanford, and Yale, learning economics and history. His book Democracy at Work talks about the democratic economy.

Richard D. Wolff Lecture on Worker Coops: Theory and Practice of 21st Century Socialism

Richard Wolff on why he focuses on the transition to worker cooperatives

A Vision for Worker Cooperatives & a New Socialism in Our Democracy - Richard Wolff

Richard Wolff: "Worker Cooperatives: Movements for Social Change and Personal Empowerment" - 1 of 2

Richard Wolff: "Worker Cooperatives: Movements for Social Change and Personal Empowerment" - 2 of 2

Richard Wolff on Worker Cooperatives

Richard Wolff on the Mondragon cooperatives

Richard Wolff -- Marx’s Economics and Worker Cooperatives

Worker Co-Ops: Friedman Debates Marxist Professor

Richard Wolff on some necessary social contexts for worker co-ops' larger success

A Democratic Society Should Have Democratic Workplaces - Richard Wolff

Ask Prof Wolff: Yugoslavia's Experiment with Worker Co-ops

Ask Prof Wolff: How Worker Co-ops Handle Bankruptcy

Ask Prof Wolff: The Transition to Worker Ownership

Ask Prof Wolff: From Capitalism to Co-op

Ask Prof Wolff: Non-profits as Co-ops

Ask Prof Wolff: Politics, Dual Power & Worker Co-ops

Ask Prof Wolff: More Benefits Of Worker Co-ops

Ask Prof Wolff: The Short, Strong Case for Worker Co-ops

Ask Prof Wolff: How Worker Co-ops Can Lead to Revolutionary Transformations

Ask Prof Wolff: ESOPS, WSDE and How to Fund Worker Co-ops

Ask Prof Wolff: Worker Co-op and Stock Markets

Ask Prof Wolff: How Do Socialist Enterprises Raise Funds?

Ask Prof Wolff: How Would A Worker Co-op Based Socialism Handle the Pandemic?

Ask Prof Wolff: Strikes & Worker Co-ops

Ask Prof Wolff: Cooperation Jackson and Humboldt

Ask Prof Wolff: Can Worker Co-ops Be Truly Democratic?

Ask Prof Wolff: Consumer Co-ops vs. Worker Co-ops

Ask Prof Wolff: A Worker Co-op Strategy

Ask Prof Wolff: Automation & Worker Co-ops

Ask Prof Wolff: Financing Worker Coops

Ask Prof Wolff: Is there union support for worker cooperatives?

Ask Prof Wolff: Worker Co-ops and Expansion

Ask Prof Wolff: Worker Co-op Based Economies

Ask Prof Wolff: Union Co-ops and Worker Co-ops

Ask Prof Wolff: How Worker Co-ops Differ from Capitalist Enterprises

Ask Prof Wolff: Why A Worker Co-op Economy Would be Less Unstable

Wolff Responds: Labor Unions and Worker Co-op

Source: Cooperative and Mutual Economy 2023

New York City has been at the forefront of the growing movement within the United States in support of Worker Cooperatives. In 2015, the New York City Council granted $1.2 million in funding and created the Worker Cooperative Business Development Initiative. As a result, New York City became the first city in the United States to receive municipal investment towards worker cooperative development. Since then, the annual fund has grown to over $3 million. The funding not only aids in the creation of WCs, but also the conversion of conventional businesses into WCs, which is especially important in the ensuing wave of business closures due to nearly half of US small business owners being baby boomers. There is support for education and training, including 1-on-1 services, as well.

In January of 2014, a report titled Worker Cooperatives for New York City: A Vision for Addressing Income Inequality was released by the Federation of Protestant Welfare Agencies arguing for the support of the WC model for the city of New York. It discusses the state of NYC, with more than 1 in 5 New Yorkers living in poverty, and the prevalence of low-wage employment as not being enough to provide adequate social mobility or financial stability. It mentions harmful business hiring trends as exacerbating these issues. Housing prices are costly, contributing to the struggles millions in the city face.

The report discusses the positive effects of the WC model, explaining that this alternative form of business has a wide range of economic and social benefits to workers. They produce less economic disparity due to more equitable distributions of wealth, and they tend to provide higher wages and benefits to its employees. This model offers individuals the opportunity to become business owners and reap greater rewards from their share, not to mention the ability to democratically participate in decision-making that directly affects their lives. In a world where owners are a small minority, WCs offer anyone the opportunity to become one and be able to more effectively create financial returns for themselves and their families. “In a number of cases, low-wage workers have become owners of businesses, accumulated wealth and benefited from significant financial returns or dividends from their membership share.”

The cooperative model has been shown to be just as, if not more, resilient compared to conventional businesses. It is therefore seen as an alternative that can offer stable employment and income to workers. The first batch of created worker cooperatives, thanks to the funds provided by the New York City Council, was 67% over a five year period, compared to the average national survival rate of 50% for small businesses. This resilience seems to be especially apparent during economic recessions, as the model is less vulnerable to price shocks in the market. This is key to providing stable income and keeping local ecomomies above water when the next downturn inevitably hits.

In the 2008 and 2020 recessions, unemployment rose dramatically as business owners fired workers to cut costs. In a WC, laying off workers is not the first thing they do. Instead, they tend to democratically vote to lower wages for a period, and then raise them again once the downturn subsides. This allows businesses to continue without having to lay off workers. This is an effective way of operating within an economy filled with boom and bust cycles. Laying off workers, often ones you had to train, means you now must find and train new ones when the downturn ends. WCs tend to keep their workers, and when financial difficulty concludes, they have retained their trained workers, giving them an advantage verses other businesses who must find, hire, and train again.

Alongside the financial positives of the model comes the social effects. The report mentions that there is a reduction in workplace abuse due to the fact that the enterprise is structured democratically. Bosses who are not held accountable by democratic processes often treat those below them disrespectfully. A large number of people who have ever held a job can attest to this. In a democratic structure, bosses are elected by everyone working there. If the boss is treating people terribly, they can be voted out and replaced. This is incredibly important because it reduces resentment, stress, and conflict. Therefore, productivity inevitably increases, often exceeding that of conventional businesses. Data on WCs corroborates this conclusion.

The democratic structure of WCs can have a positive effect on civic engagement, and the report mentions this. Participating in the decision-making process of your workplace, learning about how to resolve disagreements, and realizing the importance of being represented in the decisions that affect your life carry over into society. Our current political culture is deteriorating. Fostering a better culture of respectful disagreement and effective conflict resolution would improve our politics.

The report effectively advocates for the development of WCs in New York City through policy and legislation as part of a long-term strategy to address income inequality. Within a few months of the release of this paper, the New York City Council granted funding to the WCBDI and other partner organizatioms such as the NYC Network for Worker Cooperatives. As a result, over 130 new WCs have been created, with more in the pipeline, thus offering needed employment and income for working people. The number of WCs in New York City has effectively grown by over 500% since 2014. In 2023, 18 WCs were created with 16 more in the pipeline for the near future. The pandemic has lowered the average yearly creation rate somewhat, but it seems to be recovering. The highest creation year was 2016, with 27 having been established.

New York City isn’t the only place supporting WCs. Madison in Wisconsin, through the Madison Cooperative Development Coalition, has been supporting WC development. Berkley’s (California) City Council unanimously voted to include co-ops in the city’s small-business loan fund, to give preference for city contracts; and to provide ongoing technical assistance to help existing small businesses convert to worker cooperatives. Minneapolis established a fund for coop creation. Cities are realizing that the WC model is effective and useful in addressing economic and social issues. The number of WCs in the United States has grown by 30% in just two years. This movement is present abroad as well, including cities like Barcelona and Montréal.

The model is evidently becoming more common, establishing itself as a strong tool to address several social issues. Rising inequality, unstable employment, economic authoritarianism, and the impending doom of business closures due to the mass retirement of the baby boomer generation, must all be addressed if we are to create a better society for ourselves and our future. It is apparent that organization and legislation helps tremendously, and New York City's efforts are a model for other cities and regions to follow as we move forward in establishing a truly democratic and free society.

If interested, the Working Together report highlights the accomplishments of the Worker Cooperative Business Development Initiative, which helps New Yorkers to build and own businesses together, and gain access to upward mobility and better working conditions.

Donate to support Worker Cooperatives in NYC!

You can support the NYC Network for Worker Cooperatives, which is involved in worker cooperative development in New York City, by donating here.

You can support the Bronx Cooperative Development Initiative, which is involved in worker cooperative development in the Bronx, by donating here.

You can support Green Worker Cooperatives, which is involved in worker cooperative development in the Bronx and NYC, by donating here.

You can support the Democracy at Work Institute, which is involved in worker cooperative development in NYC and nationwide, by donating here.

Cooperatives are businesses owned by “member-owners”. Co-ops are democratically controlled by their member-owners, and unlike a traditional business each member gets a voice in how the business is run.

Note: Cooperative is an umbrella term for several types of cooperatives, such as Consumer, Housing, Worker, or Financial. Umbrellas are useful. Soon we will need iron umbrellas to mitigate the effects of acid rain. Anyway. Learn more about each type here.

"Cooperatives are rare so they are inferior.”

Just because something is more common than the alternative, it does not mean it is superior to that alternative. Capitalist workplaces took centuries to become society’s norm of enterprise. A feature of the demise of feudalism, especially in later medieval England, was the emergence from small-scale peasant farming economies of what some have termed an intermediate stage of agrarian capitalism. Feudalistic workplaces were often the great majority, but we know that capitalist workplaces are superior to them in terms of productivity and fairness. The wikipedia page has more information on the origins of capitalism.

Time exists, and it takes time for things to grow and develop. Everything has growth and decline periods in history and this is no different. Capitalist enterprises had a growth stage of many years to overtake feudalism, and the Industrial Revolution of the 18th and 19th centuries established it as the dominant economic mode of production.

In the same way, cooperative enterprises are currently in their growth stage. A century ago, cooperatives and their movements were nowhere near where they are today. A majority of cooperatives were founded within the past century. Some of the largest cooperatives, such as Seikatsu Club (1965), Mondragon (1956), IFFCO (1967), and Co-op Kobe (1921), were all founded within the last hundred years or so. Today, cooperatives have upwards of 1 billion members worldwide and the largest 300 of them have a total turnover of $2.4 trillion. There are ~3 million cooperatives on earth, so this turnover is even larger when considering all cooperatives. There are more than 40,000 cooperatives of all types in the U.S., supporting jobs that provide more than $25 billion in wages. According to a University of Wisconsin study, cooperatives have an estimated 350 million members.

The UN has compiled information on the prevalence of cooperatives. It found that two-thirds of the countries listed in the top ten most cooperative economies take up 8 of the top 12 spots on the Social Progress Index, which keeps track of things like opportunity, basic human needs, and access to knowledge. New Zealand takes the #1 spot as the most cooperative economy in the world, and it is #1 on the Social Progress Index.

In the U.K., annual co-op turnover increased from $38.1 billion to $41 billion in 2023, and employee-owned businesses grew in number by a staggering 37.7% in just 12 months. Additionally, the nation's cooperative membership has seen an increase of 300,000 in 2023, and is now at over 14 million. Overall, the number of co-ops in the U.K. grew by 1.1% while other companies decreased by 1.7% compared to the year previous. Co-ops are growing in number and membership all over the world. Ownership and control over the businesses that are meant to serve its members is being increasingly seen as a viable, and superior, alternative to the undemocratic economy in the United Kingdom.

Focusing specifically on worker cooperatives, the first legislation explicitly naming worker-owned cooperatives—the Main Street Employee Ownership Act—became United States federal law in 2018. Before then, legislation covering worker coops was rare or non-existent. Since 2018, worker coop provisions have been passed, and progress is being made. When someone says "create a worker coop, no one is stopping you", it is based in ignorance. Most people do not have the capital to start a business. There are barriers in the creation of worker coops, including a substantial lack of legislation and incentives. The U.S. does not have a uniform cooperative code, which makes the creation of a worker cooperative require extensive research in advance. Banks are more wary to give out loans and investors prefer the model that creates the most wealth for themselves. In Italy, the Marcora law, which passed in 1985, created funding for cooperative development. As a result, Italy has one of the strongest cooperative economies on earth, and the Emilia-Romagna region in Italy receives 30% of its GDP from cooperatives.

Because of an increase in funding cooperative organizations in NYC, more worker cooperatives are being created. In 2023, 18 worker coops were created in NYC (with 16 more in the pipeline), and the movement continues to move forward in founding these enterprises to help address inequality and poverty. WCBDI funding from the NY City Council has grown from $1.2 million to over $3 million in 2020, showcasing the positive results and increase in support over time. The number of worker cooperatives in New York has effectively grown by over 500% since 2014, and the number of worker cooperatives in the U.S. grew at least 30% in a two year period between 2018-2021.

Agricultural cooperatives in the U.S. hit record income and asset levels in 2022, showcasing their growth and strength.

The number of cooperatives in places like NYC, the UK, and Italy continues to see growth. This showcases the importance of legislation and education in establishing cooperatives. This is a process that has been gaining steam in parallel to growing inequality that must be addressed through a more humanized economy. There is an intrinsic need for the cooperative model that will only grow stronger as long as the profits over people form of economy continues to affect people's lives and livelihoods.

This explains several of the barriers to entry of worker cooperatives. The dominant culture of capitalistic workplaces and competition, along with a substantial lack of education on the model, contribute to its rarity. This is not talked about in most schools. In short, saying "OwO just make a coop fr" is something a person who skimmed an econ 101 textbook would say.

With that said, looking at the empirical data on cooperatives shows that they are indeed comparable to traditional businesses, and often exceed them in factors such as resilience, productivity, meeting of human needs, equitable wage distribution, and worker satisfaction.

"Worker democracy does not work.”

Many democratic workplaces exist today. They employ millions of workers. Worker cooperatives have resilience rates upwards of 30-40% higher when compared to traditional workplaces. A traditional enterprise has a survival rate of about 45-50% in the first five years of existence, while worker cooperatives stand at around 70-90%, depending on the study you look into. Productivity levels can match or even exceed that of traditional businesses, and worker satisfaction seems to be higher as well. Here is a collection of existing literature on worker cooperatives. There is very little, if any, evidence to suggest the worker cooperative model is unviable.

Not only does it work, but the number of democratic workplaces is growing year on year. "b-b-b-but they're inefficient 😭", they say as they present zero evidence.

“They are inefficient. You need hierarchy.”

Cooperatives are pretty efficient, and they can and do have hierarchies. Members elect managers and boards to centralize certain decision-making powers and increase efficiency. Mondragon, the largest worker cooperative, has a system of managers and bosses. The difference between this kind of hierarchy and that of traditional enterprises is that you can vote out the manager/board if they are abusing their powers, treating members unfairly, or simply not doing a good job. You cannot do this in a traditional enterprise. Many employees have to deal with terrible managers and do what they are told because if they don’t, they will be fired. This often contributes to a feeling of resentment and powerlessness in many workplaces, which affects worker satisfaction, career development, mental health, and productivity. The impact of bad bosses are measured, and if we want to have a productive workforce, we need to be able to elect our leaders. We already do politically. Economic democracy is the next logical step to a freer, more equitable society.

If anything, traditional workplaces are the more inefficient model. Having angry, frustrated, and resentful workers due to bad bosses can have substantial effects on worker productivity and health. In contrast, a democratic enterprise where everyone has a say in who leads them will be less likely to face such issues. The existing literature says that efficiency is not a problem when it comes to worker cooperatives. If they were so inefficient, why do they have a significantly lower failure rate than traditional firms?

“The Free Rider Problem debunks worker democracy.”

The Free Rider Problem states that an individual would choose to slack off work because they can still reap the rewards of the other working members of the cooperative. On paper, this seems like a legitimate concern, but in reality, there is no empirical data to suggest it has any substantial effect on cooperatives. Studies on forms of worker ownership have shown to largely mitigate free riding among employees. Workers are keener to monitor their co-workers, increasing productivity in comparison to firms with lower or no ownership. This makes logical sense because a worker who has more of a stake in the business will tend to be more attentive due to natural self-interest.

In fact, you could equally apply this concern toward traditional workplaces that have fixed wages and don’t offer bonuses for working harder. There is less incentive to be more productive outside of potential promotions, commissions, or tips, which many places have small or no opportunities for, so workers could slack off. Why would you work harder just to enrich the owner? You can just do the bare minimum and still be paid the same. Profits don’t go to workers, they go to the owners. If you put in $200 more in work today than yesterday, you don’t get that $200, your boss does.

One could easily apply the Free Rider Problem to owners themselves. An owner could self-elect to slack off, yet still benefit from the labour of workers. There are many examples of owners and investors who squeezed businesses out of as much profits as possible instead of working to improve, invest, and expand the business, taking the money and leaving their employees without income and communities without jobs.

In contrast, in a cooperative enterprise, you benefit directly from working harder. Since the profits are distributed back to the workers, the harder you work, the more money goes into your pocket. There is a greater incentive to be more productive because you directly benefit, and you also have a stake in the business. This is evident in the data on productivity, which seems to match that of traditional firms, or outright surpass it substantially.

Slacking off could damage profits of your business, causing your wages to lower, or even put at risk the existence of the enterprise as a whole. Why would you put your own employment and income at risk? People are self-interested so they likely would not lower their own pay or put their employment at risk by slacking off. The most prevalent reason why we go to work is to make money, after all.

“I saw a cooperative or two fail, so that must mean they suck."

A sample size that small is inadequate in determining anything substantial about their viability. One could easily say they saw a capitalist workplace fail. In fact, conventional enterprises have a higher failure rate. The resilience of cooperatives are empirically higher than that of capitalist enterprises, both in and out of recessions. The resilience of the cooperative model is apparent during the pandemic. 4 reasons co-ops do better in a crisis. Cooperatives manage well during bank crises and economic recessions.

"If you distributed the pay of [insert rich business owner/board] to all the workers, it would only raise their wages by a few dollars per year."

This is a particularly interesting argument as it assumes the only possible way to use that money is to pay the workers. It is perfectly possible for this money to go into worker healthcare, to build schools and parks in the community, or to improve working conditions. Things that would effectively lower costs for and give benefit to workers. There are many ways to utilise the potential millions coming from the top earners within a business to help the workers.

Walmart, one of the largest and most successful companies worldwide, had a net income of $13.51 billion in 2021. This is the figure after subtracting expenses and taxes from revenue. If that was equally distributed to Walmart's 2.1 million employees, they'd each receive about $64. This isn't that high. But wait, there's more. We have to remember that worker cooperatives have much more equitable wage structures, so if Walmart transitioned into a coop, the wage structure would compress, raising wages for the lowest-paid workers. If we go with the average U.S. wage ratio of 2:1 between the highest and lowest paid workers, worker pay could actually increase by hundreds per year. This would be very helpful for the large number of Walmart employees who are not being paid a living wage and are on food stamps. But wait, there's more. Worker cooperatives are collectively owned by their workers, so Walmart's employees would each have an equal share of Walmart's assets and shares, which are in the billions.

The argument defends the existence of an extreme form of unequal wealth distribution, a primary driver in worsening inequality worldwide. 8 people have as much wealth as the bottom half of humanity. There is no logical way to defend this except for ignorance, and quite possibly, bootlicking. One family making $4 million per hour while their workers make $14 is is not excusable, nor is it sustainable. Not only is this distribution deeply immoral, but it also contributes to economic stagnation. Our for-profit system incentivizes paying lower wages as that is an expense. When workers are being paid subsistence wages, they will have less spending power. Aggregate demand within the economy will decrease. As a result, businesses will make less, leading to layoffs and closures. Enter yet another recession.

"Profit is necessary to provide things and pay people."

No, it is not. Enterprises can operate at cost and do not need to pursue profit. Electric co-ops operate at cost, providing affordable power for 50% of the U.S. landmass and millions of people. They set their rates based on the operational costs, including generating/purchasing of power and worker pay. Non-profit organizations exist, such as Credit Unions or consumer cooperatives. Profit is not necessary to meet community needs.

Tankie Argument: "Workers are not capable of running a business, which is why we need vanguard parties and officials to make the decisions."

Democratic workplaces exist and work in reality. Authoritarianism ain't cool, bro.

Somehow an Argument: "Democracy doesn't work."

Democracy is not perfect, but it is the best way we've found to organize decision-making in society. "Tyranny of the majority" is often said, but is tyranny of the minority any better? How many democratic states have voted with a 50%+1 majority to commit genocide? Compare that to the undemocratic, fascist, and authoritarian states which have committed genocides and mass killings. Democratic rule decreases the likelihood of violating human rights, empirically. An in-depth paper concluded that democracy advances human development, but only when considered as a historical phenomenon. In essence, a democratic regime which is maintained over a longer period will tend to have a positive net effect on the welfare of its citizens.

Democide refers to "the intentional killing of an unarmed or disarmed person by government agents acting in their authoritative capacity and pursuant to government policy or high command." Rudolph Rummel, a political scientist, coined the word democide and, through his years of study, found that democratic regimes had the lowest rates of democide. After studying over 8,000 reports of government-caused deaths, Rummel estimated that there have been 262 million victims of democide in the last century. According to his figures, six times as many people have died from the actions of people working for governments than have died in battle. One of his main findings was that democracies have much less democide than authoritarian regimes.

Democracy might not work in always making decisions that you agree with, but it does increase human rights protections and representation for the most people possible and therefore works for the greatest number of people. Considering how humans are social creatures by nature, having democratic processes within society that enables indviduals to talk with others about policies contributes to our sense of self in relation to the society we live in. Learning how to effectively participate in democratic decision-making helps us grow into better people.

Inspired by true conversations

The Seikatsu Club cooperative is a remarkable organization that has made significant contributions to communities in Japan. Known as the Seikatsu Club Consumers' Cooperative Union, it was established in 1965 as a response to the growing demand for safe and affordable food products. Since its inception, the cooperative has grown into one of the largest consumer cooperatives in Japan, with a membership base of over 300,000 members, a majority being women. Its annual retail sales were over $700 million (87 billion yen) by 2017.

Seikatsu Club operates through a decentralized network of local branches, with each branch functioning as an autonomous cooperative. Members actively participate in the decision-making process, including product selection, pricing, and the establishment of cooperative policies. This democratic structure ensures that the interests and needs of the members are prioritized, fostering a sense of ownership and empowerment. In contrast, capitalistic enterprises are controlled by only a small group of people at the top who make decisions, often ignoring the needs of employees and the community.

At its core, the Seikatsu Club cooperative aims to provide its members with access to high-quality, locally sourced, and organic food products at reasonable prices. The cooperative operates on a direct-to-consumer model, cutting out middlemen and ensuring fair prices for both producers and consumers. Pre-orders for products are placed by consumers through a collective purchase system. This system allows farmers and producers to plan in advance, ensuring that overproduction is cut to a minimum and guaranteeing that everyone receives the fresh products they need. By eliminating unnecessary distribution expenses, Seikatsu Club is able to offer products that are often cheaper than those found in conventional retail stores. When a capitalist talks about efficiency, they are not referring to cutting expenses for consumers or reducing waste. They are talking about how quickly the money jumps into the pockets of a small group of owners. The 8 richest people have as much wealth as the poorest 3.6 billion. This must be addressed through a more human-based economy.

One of the key benefits of the Seikatsu Club cooperative is its commitment to supporting local farmers and producers. By establishing direct relationships with these suppliers, the cooperative ensures fair compensation for their products and encourages sustainable farming practices. Transparency is an important value that allows consumers to know exactly what they are purchasing and eating. There is much emphasis on direct contact between consumers and producers. Consumers regularly visit farms and observe production methods, or to even help out. This not only helps to strengthen local economies but also promotes environmentally friendly agriculture.

Seikatsu Club prioritizes the empowerment of women within its organization and the wider community. In Japan, women have historically faced challenges in terms of employment opportunities and gender equality. The cooperative model embraced by Seikatsu Club provides a platform for women to actively participate in decision-making processes and take on leadership roles. This has been instrumental in promoting gender equality and fostering a sense of agency among women.

The cooperative began in 1965 when one housewife in Tokyo organized 200 women to purchase 300 milk bottles to reduce the price. In 1968, Seikatsu Club was incorporated as Seikatsu Club Consumers’ Cooperative (SCCC). Since then, the cooperative has expanded itself to include activities in politics, social services, environment, disposal, production, and distribution under the motto “autonomous control of our lives”. A century earlier, as imperialism and the global economy clawed its way into Japan, the subjugation of Japan through exploitative trade deals imposed by western powers made the nation semi-dependent in the global system. Cooperatives rose out of this reality as a strategy to lower prices and reject the mass-produced food of the industrialized west which was often unhealthy and contained chemicals. There was a health crisis in Japan during this period, but consumer cooperatives addressed this societal problem head on.

Seikatsu Club goes beyond its core mission of providing quality food products. It actively engages in various social and environmental initiatives, including advocating for fair trade, supporting renewable energy projects, and promoting waste reduction and recycling. SCCC has helped to reduce CO2 emissions by using reusable and returnable items such as containers and bottles. About 4,300 tons of containers and bottles were retrieved in 2017, reducing approximately 2,400 tons of CO2. It supports the installation of renewable energy sources such as solar and wind. These efforts demonstrate the cooperative's commitment to holistic community development and its recognition of the interconnectedness between social, economic, and environmental issues.

Not only does Seikatsu Club participate in environmental activities, but it also provides long-term nursing and childcare programs rooted locally, serving people who need it most. Hundreds of worker cooperatives were created by the Club since the 1980s, creating tens of thousands of resilient jobs. In 2018, there were 100 members in local municipal government positions, showcasing the growing reach of the cooperative’s ideas and its popularity.

The success of the Seikatsu Club cooperative lies in its ability to showcase the cooperative model as a viable alternative to traditional business structures. By prioritizing the needs and aspirations of its members over profit, the cooperative demonstrates that it is possible to create an inclusive and sustainable economy. Through its emphasis on democratic decision-making, equitable distribution of resources, and community engagement, Seikatsu Club serves as a living example of how cooperatives can address societal challenges and foster a sense of solidarity among its members.

The Seikatsu Club cooperative has a rich history of promoting access to safe and affordable food, supporting local producers, empowering women, and championing sustainable practices. Its commitment to the cooperative model and its holistic approach to community development make it a shining example of how cooperatives can create positive change in society. By prioritizing the well-being of its members and the broader community, Seikatsu Club has not only transformed the way people consume but also contributed to the empowerment and resilience of communities in Japan.

https://seikatsuclub.coop/en/about.html

https://en.m.wikipedia.org/wiki/Seikatsu_Club_Consumers%27_Co-operative_Union

https://rightlivelihood.org/the-change-makers/find-a-laureate/seikatsu-club-consumers-cooperative/

https://www.amazon.com/Humanizing-Economy-Co-operatives-Age-Capital/dp/086571651X

Indian Farmers Fertiliser Cooperative Limited, also known as IFFCO, is a multi-state cooperative society engaged in the manufacture and marketing of fertilizers. IFFCO is headquartered in New Delhi, India. Started in 1967 with 57 member cooperatives, it is today the biggest co-operative in the world by turnover on GDP per capita (as per World Cooperative Monitor 2021), with around 35,000 member cooperatives reaching over 50 million Indian farmers.

Co-op Kobe (Japanese: コープこうべ), officially known as Consumer Co-operative Kobe, is a consumers' cooperative based in Kobe, Japan. It was founded in 1921 by Toyohiko Kagawa, and was later merged with Nada Consumer Co-operative. Now, with over 1.2 million members, it is the largest consumers' cooperative in the world.

The Seikatsu Club Consumers’ Co-operative Union (SCCCU; Japanese: 生活クラブ事業連合生活協同組合連合会, romanized: Seikatsu kurabu jigyō rengō Seikatsukyōdōkumiai rengō-kai) is a Japanese federation of consumer co-operatives headquartered in Tokyo. It was formed in 1965 and has 307,000 members, most of whom are women.

Amul is an acronym (Anand Milk Union Limited) of the Indian Multinational cooperative society named Gujarat Milk Marketing Federation based in Anand, Gujarat. It is under the ownership of Gujarat Cooperative Milk Marketing Federation Limited, Department of Cooperation, Government of Gujarat. It is controlled by 3.6 million milk producers.

Coop amba, formerly FDB, is a cooperative based in Denmark. The coop has 1.9 million members and three subsidiaries. The Coop Danmark subsidiary operates the retail store chains of Kvickly, Brugsen, SuperBrugsen, Dagli'Brugsen and 365discount as well as the furniture company FDB Møbler. They previously ran the now discontinued chains Irma, Fakta & LokalBrugsen. The last two subsidiaries comprise Coop Bank and Coop Invest.

The Edeka Group is the largest German supermarket corporation as of 2017, holding a market share of 20.3% Founded in 1907, it currently consists of several co-operatives of independent supermarkets, all operating under the umbrella organisation Edeka Zentrale AG & Co KG, with headquarters in Hamburg. There are approximately 4,100 stores with the Edeka nameplate, ranging from small corner stores to hypermarkets. On 16 November 2007, Edeka reached an agreement with Tengelmann to purchase a 70% majority stake in Tengelmann's Plus discounter store division, which was then merged into Edeka's Netto brand, resulting in around 4,200 stores by 2018. Across all brands, the company operated a total of 13,646 stores at the end of 2017.

Coop is a system of Italian consumers' cooperatives which operates one of the largest supermarket chains in Italy. Its headquarters are located in Casalecchio di Reno, Province of Bologna.

Dairygold Co-Operative Society Limited is an Irish dairy co-operative based in Mitchelstown, County Cork, Ireland. With its catchment area mostly in the Golden Vale, Dairygold processes an annual volume of approximately 1.43 billion liters of grass fed pastureland milk, making it Ireland's second largest dairy co-operative and the island's third largest milk supplier. Formed after the 1989 merger of the Mitchelstown and Ballyclough co-ops, by 2020 it had 7000 shareholder members and reported an operating profit of €26 million from a turnover of €1.02 billion.

Ornua, from the Irish "Ór Nua" meaning "new gold" (known as The Irish Dairy Board from 1961 until 2015), is an Irish agricultural cooperative, which markets and sells dairy products on behalf of its members: Irish dairy processors and Irish dairy farmers. The co-operative is Ireland’s largest exporter of Irish dairy products and owns the Kerrygold butter and cheese brand as well as Kerrygold Irish Cream Liqueur. In addition to the Kerrygold brand, its brand portfolio includes Pilgrims Choice, Dubliner, Shannongold, and BEO milk powder.

PSS Społem is a Polish consumers' co-operative of local grocery stores founded in 1868. It has 2,400 locations.

Arla Foods is a Danish-Swedish multinational cooperative based in Viby, Denmark. It is the fifth biggest dairy company in the world and the largest producer of dairy products in Scandinavia and United Kingdom.

The Mondragon Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. It is the seventh-largest Spanish company in terms of asset turnover and the leading business group in the Basque Country.

Sunkist Growers, Incorporated is an American citrus growers' non-stock membership cooperative composed of 6,000 members from California and Arizona headquartered in Valencia, California. Through 31 offices in the United States and Canada and four offices outside North America, its sales in 1991 totaled $956 million. It is the largest fresh produce shipper in the United States, the most diversified citrus processing and marketing operation in the world, and one of California's largest landowners.

https://en.m.wikipedia.org/wiki/List_of_cooperatives

A collection of sources and data surrounding the Worker Cooperative (WC) model, which is founded upon worker ownership and democratic control.

Aggregate Summary

1. Resilience and Economic Impact

   ● Worker cooperatives (WCs) are significantly more resilient than conventional firms, especially during economic crises.

   ● During economic downturns, WCs prioritize employment, allowing wage fluctuations to retain workers, unlike conventional firms which typically resort to layoffs.

   ● Regions with high concentrations of larger and well-established WCs tend to have lower unemployment rates than national averages.

   ● Economic recessions may significantly boost WC creation rates.

2. Employment and Stability

   ● WCs offer greater job stability compared to conventional firms, particularly during economic crises.

   ● WCs tend to adjust wages rather than employment levels, allowing for workers to remain employed during crisis.

   ● On average, WCs employ more people than conventional firms, challenging the perception that they can't scale.

3. Community and Social Benefits

   ● WCs align interests with their communities, often providing discounts or resources to meet local needs.

   ● Worker participation in WCs is linked to higher civic participation in society.

   ● Worker satisfaction appears to be higher in WCs than in similar conventional businesses.

   ● Democracy at work correlates to higher productivity, increased job satisfaction, greater sustainability, and less inequality.

   ● Cooperative enterprises, including WCs, contribute to higher levels of social trust.

4. Productivity and Innovation

   ● WCs match or exceed productivity levels of conventional firms, depending on the industry.

   ● WCs are as innovative as other businesses.

   ● Worker input may enhance organizational efficiency and innovation.

   ● Worker ownership, participation, and profit-sharing in WCs are associated with higher productivity.

5. Wages and Economic Equality

   ● Compressed wage structures in WCs contribute to higher median wages compared to conventional firms.

   ● Wage ratios in WCs are more equitable, with Mondragon at ~5:1 and U.S. WCs at ~2:1, contrasting with many conventional firms' 200+:1 ratios.

   ● When including surplus dividends and bonuses, workers in WCs may receive competitive or higher pay than locally prevalent.

6. Challenges and Solutions

   ● Compressed wage structures may lead to a brain drain of highly skilled workers, though evidence suggests skilled workers are less likely to leave WCs.

   ● Some banks hesitate to loan to WCs due to a lack of understanding/awareness, affecting creation rates.

   ● Capital-intensive industries pose high barriers to entry for WCs.

   ● Investors principally seek the highest return on investment, and so they prefer conventional firms as WCs tend to boost wages and benefits which reduce profit margins for external investors.

   ● Credit Unions may help mitigate access to capital issues for WCs.

7. Legislation and Regional Success

   ● France, Italy, and Spain have well-established WC sectors supported by legislation and incentives.

   ● Italy's Marcora Law supports worker buyouts of failed businesses into WCs, generating significant tax revenue.

   ● Italy's Emilia-Romagna and Spain's Basque region are exemplary displays of economies with large WC sectors, boasting low unemployment, high human development indexes, and economic prosperity.

8. Conversion and Growth

   ● Firm conversion is an effective way to create WCs, addressing startup costs and investment limitations.

   ● Conversions can tackle the mass retirement of baby boomer business owners (silver tsunami).

   ● The number of WCs in the U.S. has tripled since 2008, with similar growth trends in Spain, Argentina, Japan, Italy, and several other countries.

9. Cultural and Educational Barriers

   ● Lack of education, knowledge, investment, and the dominance of traditional enterprises contribute to the scarcity of WCs in the U.S.

   ● Americans support WCs and workplace democracy, indicating worker preference does not necessarily hinder their growth.

10. Future Prospects

    ● The WC movement is relatively young in many countries, necessitating further data collection for accurate macroeconomic evaluations.

Sources

1. Where Does Profit Sharing Work Best? A Meta-Analysis on the Role of Unions, Culture, and Values

● Profit sharing in both cooperative and non-cooperative firms is positively associated with productivity on average.

● The positive effect is six times greater within cooperative firms.

2. Is Profit Sharing Productive? A Meta-Regression Analysis

● Adds to previous analysis.

● Separate meta-analysis suggests profit sharing works better in combination with capital investment and employee participation.

3. Worker Participation and Productivity in Labor-Managed and Participatory Capitalist Firms: A Meta-Analysis

● Worker ownership, participation, and profit sharing is positively associated with productivity.

● Capitalist firms employing participatory programs display positive associations.

● In all cases, point estimates are greater in labor-managed firms than in participatory capitalist firms.

4. Employee ownership and firm performance: a meta-analysis 

● Employee ownership has a small but positive and statistically significant relation to productivity.

● Of 50 studies in the dataset, employee ownership firms had performance scores 35% higher, on average, than other firms.

● Implementation of employee ownership schemes was associated with a 32% increase in performance, on average.

5. Psychological Research on Organisational Democracy: A Meta-Analysis of Individual, Organisational, and Societal Outcomes

● The more that employees participate directly in tactical and strategic organisational decisions, the more they individually display value-based commitment, involvement, job satisfaction, and experience a supportive climate.

● Owning shares in a company has a smaller relationship to job satisfaction compared to perceived participation in organisational decision making.

● Ongoing individually perceived participation in organisational decision making satisfies human needs, inducing positive psychological and organisational outcomes, deduced from self-determination theory and psychological ownership theory.

● Frequent direct participation results in prosocial and civic orientations and behaviours.

6. The Productivity Effects of Worker Participation: Producer Cooperatives in Western Economies

● Estimates of worker participation in producer cooperatives found that the overall effect is positive.

● The positive effects are found most uniformly with respect to profit sharing and, to a slightly lesser extent, individual capital (share) ownership and participation by workers.

7. The Effects of Workers' Participation on Enterprise Performance

● Participation was found to be generally positively associated to productivity in French cooperatives.

● Cooperatives, at the very minimum, seem to be technically efficient, more so than their capitalist couterparts.

● Productivity enhancement is more pronounced in cooperatives transformed from other enterprise types than those created from scratch.

● Productivity effects from participation is typically around 5%, though it varies between -2% to 26%.

● Once established, cooperatives survive at least as long as their capitalist counterparts.

8. Labor-Managed Cooperatives and Private Firms in North Central Italy: An Empirical Comparison

● Labor-managed firms in Italy were found to be more productive than private firms.

● Both value added per head and value added per hour were about one third higher in the cooperatives.

● No evidence was found for free-riding affecting efficiency, even with the lesser reliance on managers, and skilled workers were found to be less likely to leave compared to private firms.

● The cooperatives were found to have very little, if any, strike activity, while private firms had substantial amounts.

● Co-ops and private firms experienced falling employment levels between 1981 and 1984, but whereas the cooperatives managed to maintain and then increase employment toward the end of the period, in the private firms job losses continued throughout.

9. Participation and Productiviy: A Comparison of Worker Cooperatives and Conventional Firms in the Plywood Industry

● An investigation of productivity in the plywood industry found that worker co-ops are more efficient than conventional firms of the same industry by 6 to 14%.

● Worker participation does not have any significant efficiency losses.

● When workers share similar values, disputes within the producing unit are less likely to occur, monitoring costs tend to be lower, and social sanctions are probably more effective in deterring malfeasance.

10. Employee-owned firms in France

● SCOPs (worker cooperatives) are distributed across a wide range of industries; are larger than conventional firms, as capital intensive, more productive and survive better.

● Despite this good performance their number remains modest, perhaps because of information barriers.

● There is an issue of information as the general public and government agencies outside those specializing in the social economy do not seem knowledgeable about worker cooperatives.

● 3/4ths of SCOP workers are also members, and this rises to over 4/5ths for workers with two years seniority.

● Membership fees may cost between forty euros to six months salary.

11. The ABCs of Co-op Impact

● Worker cooperatives are 5% more productive than traditional businesses and are two-thirds more likely to succeed than the average U.S. company.

12. Business transfers to employees under the form of a cooperative in Europe

● French business conversions into worker cooperatives exhibit three-year survival rates of 80-90%, which surpasses the overall survival rate of 66% for all French enterprises.

● The conversions were found to have significantly lower bankruptcy rates and displayed superior resiliency in the onset of the 2008 recession.

13. Early cooperative survival: the liability of adolescence

● Four years after the creation of French worker cooperatives (SCOPs), nearly 75% still existed, whereas the proportion was under 60% for French firms overall.

14. The Relative Survival of Worker Cooperatives and Barriers to Their Creation

● Studies of worker cooperatives in a variety of national settings indicate their failure rate is lower than conventional firms at least in the short and medium term.

● The implication of this research is that theories explaining the rarity of WCs by assuming they must suffer from some inefficiency should be discounted.

15. Worker Cooperatives: Performance and Success Factors

● Existing research does not support the proposition that worker cooperatives, once formed, are at a competitive disadvantage to conventional firms.

● In 2013, WAGES had created five green house-cleaning businesses, providing high-quality employment to over 100 women and generating $3.2 million per year.

● All five of the co-ops experienced steady growth even during the financial downturn, despite the fact that the national small business failure rate increased by 40 percent during the 2009-2011 period.

16. The Marcora law supporting worker buyouts for over thirty years

● In Italy, worker-owned cooperatives that have been established by workers purchasing a business facing closure or being put up for sale exhibit a 3-year survival rate of 87%, contrasting with the 48% survival rate of all Italian businesses.

17. Comparative empirical observations on worker owned and capitalist firms

● Worker-owned firms have a significant lower hazard rate than conventional ones.

● The worker-owned firm sectors analyzed grew remarkably since the 1970s. In the same period, conventional firms grew slowly or even declined.

18. An empirical analysis of cooperative creation, survival compared to capitalist firms and survival between different co-op types in the United Kingdom

● Cooperatives are often created during times of disillusionment with capitalism and unemployment.

● Democratically controlled firms have lower hazard ratios and survive better in market economies than regular capitalist firms during a five-year period.

● All three cohorts of worker cooperatives had greater 5-year survival rates than other businesses, with 65%, 56%, and 70%, compared to 44.1%, 43.2%, and 43% for conventional businesses, respectively.

● Worker participation, profit sharing, and ownership is generally positively correlated with productivity, and incentives for working harder due to the profit sharing aspect are strengthened.

19. Well-being in the workplace: What if SCOP had it figured out?

● The 5-year survival rate of french SCOPs (worker cooperatives) is 76% compared to 61% for all french businesses in 2023.

● Workers in french SCOPs express high levels of wellbeing and satisfaction.

● Workers feel empowered through their decision-making ability, with the model offering workers psychological and “immaterial” benefits that compensate for any material limitations.

● The SCOP network has seen an 11% growth in 2022 compared to 2021.

20. Workers’ Self-Management in Argentina: Contesting Neo-Liberalism by Occupying Companies, Creating Cooperatives, and Recuperating Autogestión

● Over 400 ERTs (empresas recuperadas por sus trabajadores) have existed at some point in Argentina between the early 1990s to the first months of 2016.

● Displaying a survival rate of almost 90 percent, only 43 firms that became fully operational as ERT worker cooperatives had closed as of the first quarter of 2016.

● Of the ~330 ERTs active in the 2010 to 2013 period, only three shut down in the 2014 to 2015 period (a 99% rate of survival).

● Major factors for ERT closures include: inheriting difficult micro-economic circumstances, successful evictions, auctioning of a firm’s assets by bankruptcy courts, and sundry legal or market difficulties, and just one ERT firm was found to have closed due to internal worker conflicts.

21. Making Mondragon: The Growth and Dynamics of The Worker Coooperative Complex

● Mondragon displays a long-term resiliency and therefore refutes the claim that worker cooperatives cannot be sustainable.

● Of the 103 cooperatives created from 1956 to 1986, only three were shut down, and they were small firms involving relatively few workers.

● This survival rate of 97% over three decades is in stark contrast to U.S. businesses which have around a 20% survival rate in a 5-year period.

22. Survival Rates of Co-operatives in Québec

● Forestry worker cooperatives in Canada are sustainable, lasting longer than five years 6 times out of 10, whereas in the private sector of the forestry industry and services only 3 enterprises out of 10 succeed.

● Over a 10-year period, forestry worker cooperatives present a 53% survival rate as opposed to 18% for the sector as a whole. 

● Ambulance worker cooperatives display an 83% 5-year survival rate.

● Worker cooperatives in other sectors were found to be generally sustainable and, at worst, had similar survival rates of other businesses.

23. Italy’s Worker Buyouts in Times of Crisis

● From 1985 to 1991, the 6-year survival rate of worker buyouts of manufacturing enterprises that transitioned into worker cooperatives was 96.3%, with a 10-year survival rate of 88.89%.

● This contrasts to the 62.7% 5-year survival rate of all Italian manufacturing businesses, and other cohorts were also measured to have high survival rates. 

● Between 2010-2014, WBO creation outpaced the net creation of new firms in manufacturing sector “employer enterprises” in the OECD countries and in Italy by several percentage points, while also falling well under the average dissolution rates of manufacturing firms in OECD countries, including Italy.

24. Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay

● After examining all businesses in Uruguay from 1997 to 2009, it was found that worker-managed firms have a 29% reduced likelihood of closure when considering factors such as industry.

● The higher survival rates of worker-managed firms seem to be associated with their greater employment stability.

25. Where Did Mill Go Wrong?: Why the Capital-Managed Firm Rather than the Labor-Managed Enterprise Is the Predominant Organizational Form in Market Economies

● A 1988 study of the "death" rates from all sources, including dissolution and conversion to capitalist firms, showed that the relative rates in France were 6.9% for labor-managed firms and 10% for capital-managed manufacturing firms; in the U.K., 6.3% for labor-managed firms to 10.5% for all industries. 

● Labor-managed firms have a significant productivity advantage, which rebuts the purported explanation that they have not proliferated because of their alleged inefficiency.

● They appear to have a profitability and survival rate no worse, and possibly better than, traditional capitalist competitors.

26. 2019 Worker Cooperative State of the Sector Report

● U.S. worker cooperatives that are 6-10 years old have a 25.6% success rate while those over 26 years old have a 14.7% success rate.

● By comparison, US small businesses that are 6-10 years old have an 18.7% success rate while those older than 26 years have an 11.9% success rate.

● The report reveals that female workers and workers of colour make up the majority of the workforce in worker co-ops.

27. Job preservation through worker cooperatives: An overview of international experiences and strategies

● The Regional Union of SCOP (worker cooperatives) in France has placed corporate takeover and recovery by employees (CTRE) at the heart of its development policy since 2006.

● 106 CTRE projects have saved 1,186 jobs with a survival rate of nearly 70% after five years, compared with 50% for traditional private businesses.

28. The Viability of Employee-owned Firms: Evidence from France

● This study examines data on French producer cooperatives for the years 1970-79 to test the widely accepted theoretical prediction that employee-owned firms either will fail as commercial undertakings or degenerate into capitalist firms as the proportion of hired workers who are not members of the cooperative firm increases.

● Contrary to this prediction, the authors find a high rate of survival among the producer cooperatives studied, with many cooperatives still healthy after fifty years of operation, and they find no evidence of degeneration.

● Economic outcomes implied by the Vanek model do not align with observed tendencies for cooperatives to grow in size.

29. The Relative Survival of Worker Cooperatives and Barriers to Their Creation

● Studies of worker cooperatives in a variety of national settings indicate their failure rate is lower than conventional firms at least in the short and medium term.

● The implication of this research is that theories explaining the rarity of WCs by assuming they must suffer from some inefficiency should be discounted.

30. The Oxford Handbook of Mutual, Co-Operative, and Co-Owned Business

● Italy, France, and the UK (and probably also other countries) it is not uncommon for worker cooperatives to survive for well over a century.

● The evidence clearly implies that worker co-operatives preserve jobs better in deteriorating market conditions when other firms are more likely to cut jobs.

● Recessions tend to boost worker cooperative creation as workers pursue alternatives to mitigate the unpredictable boom and bust cycles of the market system.

● In countries where there are strong worker cooperatives, these have tended to increase in number during recessions, both as new start-ups and takeovers of ailing businesses.

● The worker cooperative sector in France grew by more than 263 cooperatives in 2013 (an increase of 17% since 2009), while in the decade following the 2008 recession the number of U.S. worker cooperatives doubled.

● The level of indebtedness of worker co-ops was lower than that of comparable enterprises, and the job losses were less significant.

31. The resilience of the cooperative model

● Comparative analysis of cooperative and conventional firms show that the number of cooperatives’ growth rate seemed to recover at a faster pace and that they are more resilient during the 2008 crisis.

● In France in 2008, worker-owned cooperatives saw a 4.2% workforce increase while conventional firms saw a 0.7% decline. Between 2006-2011, France saw a negative growth rate of the number of cooperatives in 2009 only, and it was just -0.06%.

32. Cooperatives and social enterprises: Work and employment in selected countries 

● Following the 2008 recession, cooperatives had survival rates similar to or better than mainstream businesses.

● In Spain, the number of worker cooperatives decreased by 2.5%, whereas the number of mainstream businesses decreased by nearly 15%.

● Co-op survival rates exceeded that of other businesses by 77% compared to 65%, with employment in worker cooperatives being reduced by 6.4% vs 11.9% in mainstream businesses.

33. 2021 Worker Cooperative State of the Sector Report

● During the pandemic, worker co-ops prioritized supporting their community & other cooperatives.

● 73% offered discounts or resources to meet community needs, 60% offered discounts or resources to another cooperative, and 61% worked with local or regional mutual aid networks to meet a community need in 2021.

● While all types of small businesses suffered during the pandemic, only 20% of worker cooperatives surveyed lost over half of their revenue, compared to 28% of all small businesses who lost over half of their revenue in 2021.

34. Pandemic Crash Shows Worker Co-ops Are More Resilient Than Traditional Business

● The pandemic recession shows worker co-ops are resilient to economic crises, with worker-owners able to share the burden during a downturn and redirect their skills toward emerging needs through collective decision making.

● Cooperative Home Care Associates, the largest worker co-op in the United States, struggled to obtain masks during the pandemic, so they collaborated with another worker-owned cooperative called Opportunity Threads to produce the masks. 

35. Worker Co-ops: Weathering the Storm of COVID-19

● Reporting U.S. worker co-ops were more likely to redistribute business funds to pay workers, reduce wages, or temporarily furlough wages rather than lay off workers, with over half of reporting co-ops saying they kept the same workforce.

● Many of the co-ops are connected to their communities, often sharing health, financial, and essential resources, as well as being involved in local and national mutual aid networks.

36. Employment Stabilization Inside Firms: An Empirical Investigation of Worker Cooperatives

● There are two possible ways that worker cooperatives may guarantee employment insurance: letting wages fluctuate, and accumulating reinvested profits into an income stabilization fund that copes with recessions without having to lay off workers or reduce wages.

● There is strong evidence that worker cooperatives provide a greater stabilization of employment compared to capital-managed firms.

37. What do we really know about worker cooperatives?

● Worker co-ops are on average larger than conventional firms and they survive at least as long.

● They have more stable employment due to dropping wages rather than reducing workforce during downturns, and when a downturn ends, they make up for lost pay as profits are shared.

● They are more productive than conventional businesses, with staff working "better and smarter" and production organised more efficiently, and they retain a larger share of their profits than other business models.

38. La supervivencia de las Cooperativas de Trabajo Asociado en Colombia: una aproximación teórica

● An assessment of Associated Labor Cooperatives (Cooperativas de Trabajo Asociado-CTA) finds that there is a strong relation between the worker and the company, that there is more intense effort at work and therefore productivity, and that there is stable employment and permanence in workers.

● It is observed that CTAs present slightly higher survival rates.

39. California Worker Cooperatives

● A survey on California cooperative workers found that the majority agree or strongly agree that being in a cooperative business enhances productivity of the business.

● A Democracy at Work survey found that worker cooperatives across all industries had an average profit margin that was almost 8.5% higher than the average for private firms (6.4% vs. 5.9%).

● Employee turnover seems to be substantially lower than industry peers.

40. The Productivity Effects of Worker Participation: Producer Cooperatives in Western Economies

● This paper presents econometric estimates of productivity of various forms of worker participation, with the overall effect found to be positive.

● The positive effects are found most uniformly with respect to profit sharing and, to a slightly lesser extent, individual capital (share) ownership and participation in decision-making by workers.

41. Is there a trade-off between efficiency and cooperativism? Evidence from Brazilian worker cooperatives

● Investigates the relationship between efficiency and cooperativism in Brazilian cooperatives, finding that there was a positive relationship ie efficiency is marginally increased. 

● Threats to efficiency such as shirking or high transaction costs are mitigatable by common principles fostering consensus and a participatory environment.

42.. Are Labor-managed Firms Superior to Capital-Managed Firms? A Two-sided Adverse Selection Model to Explain the Simultaneous Low Formation Rate and Enhanced Productivity of Labor-managed Firms

● The empirical literature has shown that labor-managed firms are similarly or more productive than conventional firms.

● This suggests that theoretical objections to the labor-managed firm based on collective choice problems or inefficiencies in firm production are at least insufficient in explaining the observed rarity of labor-managed firms.

● Further empirical observations of firm survival and exit rate also suggest that labor-managed firms do not die or get converted into conventional firms at high rates.

43. Cooperatives, Worker-Owned Enterprises, Productivity and the International Labor Organization

● A survey of empirical research on productivity in worker-owned enterprises and cooperatives finds a substantial literature that largely supports the proposition that worker-owned enterprises equal or exceed the productivity of conventional enterprises when employee involvement is combined with ownership.

● Employee-owned firms create local employment, anchor jobs in their communities and enrich local social capital

44. Cooperatives, Worker-Owned Enterprises, Productivity and the International Labor Organization

● A survey of empirical research on productivity in worker-owned enterprises and cooperatives finds a substantial literature that largely supports the proposition that worker-owned enterprises equal or exceed the productivity of conventional enterprises when employee involvement is combined with ownership.

● Employee ownership and cooperatives have fostered employment and contributed to employment security, a more dignified and participative working life, and improved overall compensation for employee owners.

● For many, cooperatives are the only hope of amassing sufficient capital to create small businesses and decent shelter, as the private sector often takes little interest in people who lack money, and so it may not even matter whether cooperatives are inefficient and/or fail to raise productivity if they are better than nothing.

45. After Occupy: Economic Democracy for the 21st Century

● The evidence shows that cooperatives operate with levels of economic efficiency that are comparable, if not superior, to normal capitalist firms.

● Mondragon co-op workers have reported that they tend to be less willing to transfer employment into a capitalistic firm, even if their pay would be greater.

● Mondragon grew faster than many other firms in the Basque region: from 1996 to 2008 its sales increased by 213% compared to 140% for similar firms.

● Irizar, a Basque-based coach building cooperative, is considered one of the most efficient of its kind in the world.

● Most co-ops are interested in maximizing employment and job security in addition to profits, and they seem to often have a broader notion of the bottom line, including profit, but also including various social concerns ranging from employment stability to community improvement.

46. Productivity, Capital and Labor in Labor-Managed and Conventional Firms

● Using two panel datasets covering several thousand firms from France, including representative samples of conventional firms and all worker cooperatives with twenty employees or more in manufacturing and services, it is found that worker cooperatives are as productive or possibly more productive overall than conventional firms in most industries.

● The two kinds of firms use different technologies: in some industries, conventional firms may produce more if they used the cooperatives’ technologies.

● French worker cooperatives produce in such a way that they use their inputs more efficiently than conventional firms, which could produce more at their current levels of inputs if they behaved in the same way as worker cooperatives.

● Worker cooperatives are not smaller than conventional firms in all industries and are observed to expand their capital at least as fast as conventional firms.

● Differences in sampling imply that the findings may underestimate the productivity of SCOPs relative to that of conventional firms, so these findings suggest that the way in which worker cooperatives organize production is probably more productive overall than conventional firms.

47. Profit Sharing and Productivity: Microeconomic Evidence from the United States

● The relationship between productivity and profit sharing is examined using a panel dataset drawn from 2,976 publicly-held companies over the 1971-85 period.

● Alternatively using firm-intercept and first-difference specifications, the regression results indicate that the adoption of profit sharing is associated with a 2.5-4.2 percent increase in productivity.

● The size of the effect increases with the proportion of employees participating in profit sharing.

48. New evidence on wages and employment in worker cooperatives compared with capitalist firms

● The comparative behaviour of worker cooperatives (WCs) and capitalist firms (CFs) in regards to wages and employment responses in Uruguay show that WCs tend to adjust wages while CFs adjust employment.

● The 2002 crisis negatively affected both wages and employment, although the employment adjustment was larger in CFs than in WCs.

● CFs would produce a socially inefficient level of lay-offs due to their inability to establish credible commitments between owners and workers.

● By contrast, because of their unique control structure, WCs would have more egalitarian adjustment mechanisms at their disposal.

49. Worker Cooperatives: Pathways to Scale

● The majority of U.S. worker cooperatives operate in the service and retail industries.

● In mature worker cooperatives supported by WAGES, members’ family incomes increased by 70-80% on average, and many have health insurance and paid time off for the first time in their lives.

● Weaknesses of the U.S. cooperative movement include lack of large-scale patient capital, under-resourced organisations, and a lack of business experience for many co-op developers.

● Employee ownership increases growth, sales, and productivity, and 100% employee-owned businesses are roughly one third as likely to fail as all public companies.

50. How Economic Democracy Impacts Workers, Firms, and Communities

● A study by the Democracy at Work Institute on U.S. worker cooperatives found that the median pay ratio was 1.5 to 1.

● A majority of workers said they earn more than their previous job, and the report suggests there may be a cooperative wage boost of $3.52 per hour (mean) and $2 (median) for workers.

● Patronage (profit-sharing) payments add to these wages, increasing pay further, and workers have internal capital accounts worth up to $10,000 or more.

● Workers benefit materially and psychologically from workplace democracy, and firms benefit in terms of recruitment, retention, and reduced shirking.

51. Productivity in cooperatives and worker-owned enterprises: ownership and participation make a difference

● Worker cooperatives and other employee owned enterprises generally pay wages that are competitive or better than locally prevailing wages when profit-sharing, bonuses and dividends are included.

● Co-ops are less likely to lay off workers during economic downturns, prefering to share work, and they tend to offer better fringe benefits than conventional companies in their field.

● There is no great accumulation of evidence to suggest that cooperatives and employee-owned enterprises are less productive than conventional firms, and substantial evidence that they at least equal, and probably exceed, the productivity of their conventional counterparts.

● In addition, they create collateral benefits for their communities and societies.

Credit to Elton H., Laura, and Miles M. for sources and information.

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A worker cooperative is an enterprise which the workers themselves collectively own. In contrast to the traditional capitalist workplace, a coop gives every employee a vote in how the business operates. The heirarchy of the employer/employee relationship is done away with so that no one individual has the power to impact the lives of workers without democratic process. In some democratic firms, the workers elect management for a time period, similarly to how representatives in government are elected to represent their citizens. In any case, a cooperative is the democratic form of the workplace where everyone can participate in decision-making.

Why is democracy important in the workplace? Democracy is important in general. It allows individuals to have their voices heard and to have their interests represented in a group. In the age of monarchies, the people did not have political democracy and the decisions were made by some unelected small group of individuals, such as kings, queens, and other unelected individuals. The wants and needs of the people were often ignored, which led to many unjust events throughout history. Specific to the workplace, democracy is important because enterprises affect people's lives. Why should an unelected group of individuals make decisions that affect others, often in very harmful ways? People spend a third of their lives at work, and commuting, and preparing for work. It is logical that the worker has democratic ability there.

Many places saw movements and revolutions in order to topple undemocratic systems. Political democracy was born out of the struggle. Many monarchists of the past often claimed that the people are not smart or logical enough to govern themselves, and that only a small group of people should make the decisions. Their argument didn't hold up. In today's age, we now have a new, parallel argument: People are not smart or logical enough to govern their workplace and that workplace decisions should be made by a small group of people. This, also, does not hold up. Workplace democracy is widespread in society today, and the data is clear. They are viable forms of enterprise, and are even superior to capitalist firms in several ways, such as survivability rates and productivity.

A great example of a worker cooperative is the Mondragon Corporation, an enterprise located in the Basque region of Spain. As the largest coop in the world, it employs over eighty thousand workers and is worth tens of billions. The internal structure operates in a way that is democratic, enabling each worker to participate in the decision-making processes of the enterprise. For example, wage ratios between the lowesy and highest paid workers are voted uppn periodically, with the average ratio being 5:1. This means that, typically, the highest paid worker can not be paid more than five times that of the lowest paid worker. This is vital in distributing wealth and profits in a more equitable manner, benefitting society greatly. In contrast, capitalist firms often distribute wealth very unequally. The Walton family of Walmart makes about four million in a given hour while many of their workers are paid under fifteen an hour. This is a common occurence under traditional workplaces. The value that is created by workers is appropriated by the owners and they decide what to pay their employees, while keeping the rest. Worsening wealth inequality can be attributed to this fact.

Worker cooperatives offer a powerful alternative to the traditional and undemocratic workplace. It gives individuals a voice in the economy and shifts focus away from profit-seeking to community building. A cooperative which is run by people who live in the surrounding community will naturally vote to support it. We have seen all too often how businesses pollute and damage communities, and then leave once it is deemed no longer profitable, taking their jobs with them. A coop rids communities of this problem. It is there to stay and to be the lighthouse for struggling neighborhoods, to offer stable jobs with good benefits and help communities grow. This is especially needed for those forgotten neigh orhoods that are predominantly black, spanish, or other minority groups. Racist policies such as redlining have perpetuated inequality and poverty in these communities. A worker cooperative can work with local hospitals and schools to improve the community and the people.

Democracy is important in a society that represents its people and their interests. Political democracy in many countries gives people the ability to vote for representatives in government. And yet, the interests of the people may still be ignored because the economy as a whole is undemocratic. A small group of individuals have the power to make decisions that affect the entire society, and no one elected them. They can pollute a river and make a community sick or lay off a large number of workers because they want to save costs that they could have afforded to pay. A democratic workplace changes all of that. People should be given the ability to govern themselves, and if we as a society claim to support democracy, then that should not magically exclude the economic realm.