Social Question

LostInParadise's avatar

Are worker cooperatives the way of the future?

Asked by LostInParadise (17724 points ) August 3rd, 2012

I had heard of worker cooperatives and know that there are some in the U.S. To learn a little more I read this article focusing on the Mondragon Cooperative Corporation in the Basque country in Spain, the largest such cooperative. The article is a bit long but rather well written.

Amid all the news of the dwindling of the middle class and of the dying of the labor movement, it is reassuring to know that there is an alternative.

At Mondragon, workers have to buy into the company, though they are permitted to do so over an extended period of time. There is a six month trial period after which a person becomes an owner/worker for life. Every worker gets a share of company profits and a single vote on choosing management and determining pay scale. At the various Mondragon facilities, the average ratio between top management pay and minimum wage is about 5 to 1. It is not quite socialism as envisioned by Marx, but neither is it capitalism in the usual sense.

Worker cooperatives are not going to become a major factor any time soon, but I can envision them eventually taking hold. They are particularly well suited to a service based economy.

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7 Answers

Ron_C's avatar

I wonder how my company’s owners would feel about selling out to its workers.

zenvelo's avatar

We’ve had some worker cooperatives near here. A grocery store that fell apart in disagreements, and a bike store that has been around over 30 years and done very well.

The problems arise with poor performing workers who feel they should have a better say in the workplace, and cause dissension and ongoing gripes. The cooperative can deal with this over time, but meantime the business suffers. And when the business suffers, the cooperative may fail.

ETpro's avatar

I hope they are. They work very well where they are supported by public policy and where the public education system and the memes held by the majority of the nation’s working age people. But there are a group of very determined billionaires and top executives of multinational mega-corporations who are determined to make sure they reap the lion’s share of the profits of world economic activity. They want a new world order where they are the corporatist masters and nearly everyone else is a wage slave. Even if we vote against their shills, they will look for ways to invalidate the will of the people.

Look at Michigan’s Emergency Manager Law and what it takes to overturn it.

josie's avatar

As long as the arrangement is voluntary I would be for it. If it is mandated by the political State and administered by bureaucracies I am against it.

dabbler's avatar

I think it’s a great idea. The Mondrian case is a good example of how it can work.

The math is easy. Take a company whose C-level (CEO, CFO, ...) compensation is astronomical and debilitating. Put someone who isn’t a sociopath in that position and pay them well but not the same crazy comp as the last guy. Use the giant pile of freed cashflow to pay for decent health benefits and better comp and to keep jobs in the U.S. Get back to me in 18 months and let me know if worker morale and productivity aren’t up.

After the U.S. domestic steel industry was mugged by corporate raiders (Michael Milken, Gordon Gecko, Greed is Good, Mitt Romney, parasite-class, I-got-mine-fuck-you types) and many of them were going bankrupt, several mid-sized steel companies were bought from their owners by their employees. Not all of them succeed in the long run, they can fall prey to back market decisions like any company. Wierton got stuck with a boatload of asbestos liability in the deal and just about collapsed in 2004. Not sure if they pulled their collective butt out of that.

dabbler's avatar

Ooops, “The Mondrian case”, Mondragon, of course.

ETpro's avatar

@josie I totally agree. It should win out in the marketplace.

@dabbler Amen to that.

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