The Workers' Paradise

October 24, 2011

Speaking of Laws: CA AB1161

Filed under: Movement — Tags: , , , , — John McNamara @ 2:09 pm

In my last year on the board of the US Federation of Worker Coops, I pushed for a 10 year plan that would, among other things, attempt to enact laws specific to worker cooperatives in at least 5  more states than currently have them (I believe that Vermont and Illinois are the only ones that specifically mention worker cooperatives). Naturally, I was very excited to see that the folks in California were on the same wave length.

California Assembly Bill 1161 aims to create a legal entity of the worker cooperative. Currently, worker coops in CA have to organize under the Consumer Cooperative Act which can be a bit cumbersome. I am a bit loathe to comment on the bill, since I live in Wisconsin. However, it does effect the worker cooperative movement and will have an impact as other states consider similar legislation. The good people at NoBAWC have posted a page on the topic and encourage discussion. They have a link to a pdf on a summary of the bill and a link to a pdf version of the actual bill.

Overall, I think that this is a great effort. However, I do wonder at a few things.

Instead of using the definition of worker cooperatives from the CICOPA World Declaration on Worker Cooperatives, it waters that definition down to mean any multi-staker holder cooperative that has a membership class. CICOPA requires that workers comprise more than 50% of the membership and that more than 50% of the workers are members. Under 1161, the non-worker members could outnumber the workers (for instance, if Rainbow opened up a consumer member category).

AB 1161 the statute does provide protections and requires that the worker members have a majority of seats on the board of directors and that the worker membership class has veto power on membership votes within the following five areas:

  1. the dissolution, sale or merger of the cooperative
  2. the disposition of all or a substantial part of the cooperative’s assets not in the ordinary course of business
  3. the filing of a petition in bankruptcy or the entering into an an arrangement among creditors
  4. conversion to a structure other than a cooperative
  5. acquisition of any asset or assets that constitute greater than 25% of the pre-acquisition assets on the cooperative’s balance sheet not in the ordinary course of business.

I understand that this provides protections for the worker members; however, it ignores some basic problems in that workers have a tendency to vote against their interests (see Reagan, Bush, Clinton, Bush, Obama) and the power of capital has a history of corrupting the leaders of workers (see Lane Kirkland, SEIU, and the Teamsters).

Another troubling aspect is that this bill would erase the already generous limit of 15% return on investment. The workers might still have political control of the business, but it is clear that they may not have economic control. What happens with the capitalists funding the worker cooperative decide to tell the workers to jump? Their choice will be to democratically ask how high or dissolve. It reminds me a bit of James Connolly’s excellent essay, “Let Us Free, Ireland!” which I discussed last November on this blog.

I am worried about what this law would allow coop leaders to give up for the investor’s money. This proposal really seems like asking the foxes to help build and manage the hen house. Yes, I realize that this might help get money into economically depressed areas, but if we are only talking about creating decent jobs, we don’t need the cooperative movement to do that. Worker cooperatives need to be about more than a decent paycheck. I would rather see greater incentives for employers to sell to their workers.

I’m not against an investor class, however, I think that this proposal opens the doors way to far. I like Equal Exchange’s model which limits the ROI to 5% and 400 investor members (I think that it is technically 399). What is being proposed in 1161 seems too much like the New Generation coops of Wisconsin and Minnesota, there needs to be more control on capital. It should follow the principle of Mondragon that Capital must subordinate to labor.

AB 1161 is still a work in progress and I imagine that it has a way to go before enactment. I don’t know enough about California politics to comment on its chances. Also, I recognize that California is not Wisconsin and that the number of worker cooperatives far exceeds what exists in Wisconsin. Most worker cooperatives would likely be unitary (essentially a collective) and I imagine that the number of new generation worker coops produced by this bill would not be substantial. However, I would hope that the folks out west find a way to incorporate the CICOPA Declaration and definitions into the language and seriously think about the effect of capital in an organization especially where the ROI is limited by only what the board wants to pay out.

Nevertheless, I am glad to see people starting to think about what we need in terms of legislation to help build the worker cooperative movement. I think that this is a great discussion that we need to start having across the country–what, exactly, is a worker cooperative and when does it quit being one?

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I know that I am probably stepping on some toes with this post, so I would like to remind everyone that you are free to sign up as a contributor (or just send a response).

October 12, 2011

Report from Quebec City

Filed under: Movement — Tags: — John McNamara @ 6:50 pm

US Federation President Rebecca Kemble blogs from the North American Worker Cooperative Conference.

http://www.progressive.org/worker_co_op_movement.html

May 10, 2010

The Guiding Light

Filed under: Identity Statement Series,World Declaration — Tags: , , — John McNamara @ 5:20 pm

Over the last several months, I have used this space to discuss the two core documents for worker co-operatives: The Statement on the Co-operative Identity and the CICOPA Declaration on Worker Co-operatives. Worker co-operative practitioners need to read these documents. More importantly, they need to conduct their co-operative’s affairs and lead their co-operative with respect to these documents.

It really isn’t enough to post a sheet of paper on a wall with the words on them. While that is important, it simply doesn’t go far enough. We need, in our co-operatives, to invent ways to bring these documents to life. Co-operatives should adopt strategies such as including a statement with each policy proposal that details how this proposal expresses the identity of a worker co-operative in terms of these guiding documents. Trainings should begin with a review of the documents and how they interact with the training. Ultimately, even our operational decisions should reflect the guiding light of the co-operative identity and the declaration.

Unlike our competitors, our business must be intentional. We can’t simply throw pasta on the wall and see if it sticks. We need to consciously embrace the identity and infuse it into our operations, our planning, and our governance. If we aren’t really different from our competitors, then why co-operate? The way that we create that difference, a difference recognized world-wide, comes from expressing the collective values, principles, and identity of the worker co-operative. We don’t need to re-invent any wheels. We just need to make them turn.

May 3, 2010

CICOPA: Relations with Workers’ Organizations

Filed under: Movement,World Declaration — Tags: , , , , , — John McNamara @ 7:00 am

The final section of the World Declaration on Worker Co-operatives deals with the co-operative movement’s relations with the international labor movement. CICOPA calls upon the co-operative movement in general and worker co-operatives in particular to engage in dialogue.

The statement reads: “The co-operative movement should maintain a permanent dialogue with the trade unions, as the representative of the workers, in order to make sure that they understand the nature and essence of co-operative worker ownership as a distinctive modality of labour relations and ownership, overcoming the typical conflicts of wage-based labour, and that they support it in view of its importance and the prospects that it offers to human society.”

This post is quite timely as I was just discussing this in my May Day posting and fellow contributor, Bernard, also alluded to some other discussions. This is more important than the employer’s organizations. Workers must work together.

While I, personally, think that worker ownership is the way to go, I also recognize that it requires a lot of work that requires a serious commitment to education. Many people are quite happy working for a unionized workplace. They may not want the burden of having to manage the company in addition to doing the operations. One bike shop owner in Madison told me that his idea was to create the bike shop and convert it to a co-op. when he raised the idea with the workers, they weren’t interested. The workers liked working for him, but didn’t want to be tied down to the business—they liked having the freedom to leave when they wanted and weren’t really interested in committee meetings. The boss, in their mind, was doing a great job and created a great workplace, so why mess up a good thing.

We don’t train workers to be owners in our society. In fact, we do the opposite. We train workers to be subservient or even child-like. When companies talk of their business “being like a family” we can count on the “boss” being “dad” and the workers the “children”. As long as they are obedient and do as they are told, everything is fine. That is part of the dynamic with the aforementioned bike shop. Why would kids go out on their own when the parents are supplying everything they need and not making very many demands?

Of course, not everyone likes the child state. Many want to expand and grow. Labor-management antagonism derives from this dynamic. There comes a point, after all, when the interests of the child and those of the dad diverge. In families, everyone has a voice that is roughly equal (at least once everyone achieves the age of 18), but in economics, the voice of capital has a magnitude over that of an individual worker. Labor’s voice only matches capital when it pools the many voices into one. Labor unions provide a voice for the workers. They allow workers to focus on their jobs and act in their self-interest.

Labor unions, of course, also propagate capitalist society. Any honest capitalist will tell you that they prefer a unionized workforce. It may cost them a little up-front, but it also prevent wild cat actions, waters down demands, and even prevents revolution. Labor Unions seek a piece of the pie, they don’t want to talk about the recipe or the menu.

My preference, obviously, is for worker ownership. I fully believe that a world economy with worker co-operation as the dominant business model would be a sustainable economic system with a strong global community based on peace, justice, and equality.

It seems to me that labor unions help level the playing ground, but they don’t challenge an inequitable system (with the exception of the syndicalist union of the IWW). I support labor unions because of this, but I know that a better world is out there.

I have to recognize, however, that many workers simply don’t want to be worker-owners. I believe that attitude exists because of an education system that channels people into being either workers or bosses. An educational system that promoted co-operation over a profit-motive would create graduates who see work in a very different light. Don José María Arrizmendiarietta demonstrated this after World War II. The worker’s children in the small factory town of Arrasate (where he was sent) were not allowed to go to the school paid for by the plant bosses. Don José created a school for the children of the workers. Those children learned their letters and numbers under the co-operative teachings of the Jesuit priest. They also learned economics through the lens of Don José’s focus on a social economy in which the community economic structure would be based on education, justice, equality and equity. When the first group of students who earned their way into the University returned to their hometown and worked at the factory, they knew that they had to change the world. They knew that workers can run things if given the education. They left their jobs and retuned to Arrasate creating the ULGOR Cooperative and Mondragon was born.

The strategy laid out in the Declaration seems very reasonable. We, as worker co-operators, need to support the entire labor movement. We should support unions. However, we should also work to educate those in labor unions about worker ownership and encourage them to support us. We need to elevate their consciousness as well as our own. There are incredible partnerships to be made. We don’t need to choose between worker ownership and labor unions. As the hopeful pairing of the US Steelworkers and Mondragon might demonstrate, we can combine forces, and build the world the both groups want together.

April 26, 2010

CICOPA: Worker Coop Relations with Employer Groups

Filed under: Movement,World Declaration — Tags: , , , — John McNamara @ 2:17 pm

This section of the Declaration on Worker Cooperatives (as the next one) consists of a short paragraph:

“Employers’ organizations can promote the development of cooperative worker ownership as an entrepreneurial form whose first objective is the creation of sustainable and decent jobs with and entrepreneurial added value, and as an appropriate exit strategy for the recovery of companies in crisis or in the process of liquidation, while respecting their autonomy, allowing their free entrepreneurial development and without abusing of this associative labour modality to violate the workers’ labour rights.”

Since this is an international statement, the definition of an employers’ organization will vary from country to country (as will its power in the economy and local government). I imagine that in some countries, an employers’ organization could even be a death squad with the mission of suppressing labor movements and union drives. For the purpose of this discussion, however, it seems best for those of us in the US, Canada and the UK to consider the role of worker coooperatives and the Chamber of Commerce. At some level, we may also want to consider groups such as the National Association of Manufacterers (NAM) and other groups.

This section seems like a call to worker cooperatives to educate their regional business groups. On the whole, this seems like a good idea. Cooperatives tend to get dismissed, in the United States anyway, as a bunch of tree-huggers, granola crunching, birkenstock pony-tailed hippies. By allowing this image to purvail, cooperatives in general and worker cooperatives in particular allow themselves to be ignored as a minor part of the economic model. We become a meaningless niche of the intelligentsia to be ridiculed instead of a model for a sustainable economy.

Our worker co-operatives must engage our local business community. We need to show them that the workers can run a business just as well or better than a single owner. We need to explain the co-operative difference. Isthmus Engineering won’t outsource their jobs to another part of the country to get cheap labor because the workers are the owners. City managers and politicians never have to worry about a worker co-operative picking up and moving out of the region (they might worry about a coop leaving the city proper, but that is a different issue).

This section of the Declaration provides a call to action on the part of our worker coopperatives. Specifically, we need to do the following:

1. When possible engage the local business associations either through membership or participation.*

2. Appoint someone in the organization to scan the media and respond to all mentions of cooperatives (especially negative connotations). Challenge the business community and the media to see co-operatives as valueable resources and sustainable assets to the community.

3. Show up, or monitor, city and county committees. Raise the cooperative model in general and the worker cooperative model in particular as viable means of sustainable economic development. This can be done through a regional or local coordination group or by individual cooperatives.

4. Create a united front of cooperatives to spread the word about cooperatives. Create the real image of our membership. Yes, there are people who fit the stereotype, but our combined memberships consists of hundreds if not thousands of workers and their families who contribute to the local economy as wage earners, property owners, renters, and consumers. The money generated in a worker co-operative stays in the community.

It is too easy for worker co-operatives to get lost in their operations. It is too easy for us to shrug and say that it isn’t our problem or that we have bigger fish to fry internally. That may be true, but we must engage the outside world. We need to be active leaders in the local economy. We need to raise the profile of worker co-operatives. Our co-operatives can only benefit from these actions. By engaging the employers’ organizations, we dispel the myths and untruths about worker co-operation and workplace democracy. We create a dynamic in which worker co-operation may be considered a solution to a problem from the early stages instead of as an afterthought. By creating a stronger impression with employers’ organizations, we create stronger co-operatives and may even create new business opportunities for ourselves.

*In Madison, two local booster groups, Chamber of Commerce and Downtown Madison, Inc, have chosen to endorse candidates in local elections. For co-operatives such as mine, this precludes our membership as our policies require us to remain neutral in elections and only lobby for positions.

Next Week: Relations with Labour Organizations

April 19, 2010

The CICOPA Declaration: Relations with Governments

Filed under: Movement,World Declaration — Tags: , , , — John McNamara @ 11:56 am

Section IV of the World Declaration on Worker Cooperatives discusses the relationship between the State as well as regional and intergovernmental institutions. I should note for the USian audience that the term “State” in this sense means any sovereign nation. The things that we call states would count as well (and in terms of regional institutions) along with the provinces of Canada that have significant latitude in self-governance.

The Declaration presents seven issues around the relationship between worker cooperatives and the governmental authorities:

  1. Governments should see worker co-ops as effective forces of job creation; they should not discriminate against worker co-ops and should include worker co-ops in development schemes.
  2. Governments should enact legislation that regulates worker co-operatives and provide them legal protection to allow optimal conditions for worker co-ops to succeed.
  3. The legislation should be cognizant of worker co-ops in that:
    1. Labor and industrial relations are different that wage based labor, self employment or independent work
    2. Non-member workers of worker co-ops should be subject to standard labor laws and protections
    3. The International Labor Organization concept of Decent Work should be applied to worker co-operatives and there should be specific language created to address the worker co-operative model in terms of health pensions, unemployment insurance, occupational health and safety.
    4. Create specific legal provisions to assist worker co-operatives fiscally and enable their development.
  4. Governments should ensure “appropriate financing conditions for entrepreneurial projects”
  5. These bodies should promote projects for worker co-operatives due to their sustainability, and as part of an overall goal of improving gender equality, fight against poverty and marginalization.
  6. Worker co-operatives should be promoted as an option and entrepreneurial model for development
  7. ILO Recommendation 193 should be understood and expressed by governments and their associations.

These are some great ideas. Unfortunately, few in any governments likely know about them. Venezuela has enacted some aspects of the recommendations under the Chavez government. I imagine that the Chavez government did because there are people in the government (at relatively high levels) who promoted the ideas to the leadership of the Chavez government and explained how it would support his economic and political model. Venezuela passed a Special Law of Co-operative Association. At the New Orleans Democracy at Work Conference (2008), an attaché from the Venezuelan government explained it to the membership of the US Federation of Worker Co-operatives. Steve Dubb reported on the conference for the Democracy Collaborative. The passage of the law helped worker co-operatives grow from about 1,000 to over 200,000 and 14% of Venezuela’s GDP and 18% of its unemployment. Even after the Chavez era ends in Venezuela, workers will have a strong voice in the economy and it will be difficult for the land barons to re-assert dominance.

The Venezuelan experience shows the power of these recommendations. But the world is not Venezuela. Chavez has unleashed forces that he may not be able to control, but his experience is unique to his country. We don’t have the same level of revolutionary fervor in the United States or Canada. We can’t expect these recommendations to be enacted by the various state governments or even the federal governments without a lot of work on our part. In that sense, these recommendations must be seen as a call to action for the representative bodies of worker co-operatives and their membership. The USFWC and the Canadian Worker Co-operative Federation must find a way to create and enact a legislative agenda to accomplish these goals. In turn, we need to pressure our apex organizations, the National Co-operative Business Association and the Canadian Co-operative Association to act in our interests as well. Creating more worker co-operatives strengthens the entire co-operative movement.

As the nations creep out of the worst economic crash in several decades, we need to create a new economy based on sustainability. We already know the way forward. Our challenge remains to bring that message into the offices of economic development of our cities, our counties, state capitals and nation capitals. In the United States, as the election year begins, we need to make the co-operative model in general and the worker co-operative model in particular an issue. We need to get the candidate’s attention. In the UK, the election happening on May 6th offers an opportunity for the worker co-operatives to push their agenda.

To begin, however, we need to speak with a common voice and develop materials for all of us to use. This should be a major goal for the USFWC, the CWCF and other worker co-operative associations over the next months and years. Without the understanding of government agencies, we will always be at the whim of a bureaucrat who doesn’t get co-ops. As long as we are seen as “just another business” we lose. We offer more than trickle down economics from profits, we offer sustainability, economic justice, and a way of life more akin to our democratic values.

Next Week: Relations with Employers’ Organizations

April 5, 2010

CICOPA: Relations with the Co-operative Movement

Filed under: Movement,World Declaration — Tags: , — John McNamara @ 4:29 pm

The remaining sections of the World Declaration on Worker Cooperatives focus on the rest of the world and suggest how they and worker cooperatives should interact. The first of these include six “invitations” for the cooperative movement to consider.

The declaration suggests that the development of worker cooperatives should be a priority for the rest of the movement. The international coop movement should help finance worker cooperatives through strategic alliances and the development of capital funds. They should also help develop laws that protect worker cooperatives. Last, but not least, every cooperative should integrate the wage-earning workers of their coops into worker-members.

It is the last one that I find the most interesting and exciting. I believe that the primary stakeholder of every co-operative is the worker. I would go further and say the primary stakeholder of any business is the worker. If a consumer cooperative shuts its door, the consumers can move on to the next store on the street. They may have to learn a new floor layout (and might have to re-fight old battles to get their favorite items), but  they can still consume uninterrupted. Farmers will still be able to get to market and purchase seeds. The workers, however, lose their jobs. They may not be able to find a job immediately. They could end up being evicted from their homes, losing their healthcare, and any number of things. With the once exception of housing co-ops, the closing of a co-operative would be most devastating on the workers serving that co-operative.

I think that the worker cooperative should also reciprocate where possible. I don’t think that worker co-ops should immediately throw open the membership rolls and allow consumers to join en masse. When developing, however, organizers should consider multi-stakeholder models as Black Star Co-op in Austin, the Rainbow Bookstore Coop in Madison and People’s Food Co-op in Portland. Existing worker co-operatives should find methods of creating a sense of solidarity with the consumer. After all, the consumer plays a very important role in every worker co-operative.

The co-operative movement gets caught in its sectors, at times, but the movement, as Don Jose is social one. It doesn’t exist in sections, but in people. One could argue, as the Fabians did, that membership should exist on the commonality of people (we all consume); however, it seems more appropriate to create membership on the basis of the stake that we have in the enterprise. I’ve found it pure folly when some consumer co-op decides to allow the workers (who are also member) the pleasure to serve on their board but only if they ignore their interests as workers. How inhumane and patronizing! As if the workers don’t have a vested interest in the success of the co-operative that pays their rent/mortgage and puts food on their table.

We all need allies as we work to create a better world. Just as worker co-ops should recognize that their customers will be their best allies, so should the other co-ops recognize that the workers are their strongest and most loyal stakeholder group (sometimes even more loyal than their membership).

March 29, 2010

Internal Functioning Rules of Worker Co-operatives

Filed under: Movement,World Declaration — Tags: , , — John McNamara @ 2:27 pm

Worker co-operatives, by their nature, focus on the internal dynamics. While this may sometimes devolve into navel gazing that can be dangerous to their ability to compete, the internal functioning of a worker co-operative defines it from ESOPs, partnerships and other competitors.

It shouldn’t be a surprise, then, that the CICOPA World Declaration on Worker Co-operatives devotes a significant part of itself to the internal functions of a worker co-operative. Upon reading them, I am reminded of the mandate from Sidney Prohibuschy (a Canadian Co-operator): Co-operative must not engage in exploitation.

Self-exploitation is the demon of worker co-operatives. Sometimes, we choose survival over purity; however, we often mistake exploitation as self-sacrifice. Paid hours and volunteer hours need to be defined carefully. It might be one thing to volunteer time at a membership meeting or a committee, but true labor for the operations should never be considered part of volunteerism.

The Declaration establishes eight clear rules for the internal functions of a worker co-operative:

  1. Compensation must be equitable with the aim of reducing the difference between the highest and lowest paid.
  2. Operations must contribute to the increase of capital and growth of funds. This is essentially stating that the co-operative must operate in a manner that is financially sustainable.
  3. The workplace must be humane, it must be ergonomically correct. It should enhance the ability of workers to have decent working conditions.
  4. In addition to equitable compensation, the social security of workers must be protected (this means a wide variety of things from health care to pensions, to time off).
  5. Democracy must be the key word and have a presence throughout the co-operative.
  6. Education, Training and Information will build the capacity of the membership to govern themselves and to find innovative solutions to collective problems.
  7. The worker co-operative must focus on the member and the member’s immediate family as well as the sustainable development of the community as a whole.
  8. Worker Co-operatives cannot become substitutes engaged to exploit other workers. They cannot be scabs to the labor movement. They must act in a way to bolster the labor movement, to be a wage and benefit leader in their industry. They should act in a way that forces their competitors to increase their wages and benefits, not as a seems to undercut other workers.

Of course, I paraphrased most of this. Please read the Declaration for yourself (and I hope that you already have and refer to it while reading this discussion.

For me, the most interesting parts of this section are points six through eight. However, the most interesting is the seventh rule. Often, in US worker cooperatives, there is a presumption that benefits should only focus on the individual, not the family. As someone who has described himself as a “non-breeder”,  I have certainly been an advocate of that position. Healthcare provides a great example of the dilemma. The cost for individual coverage is manageable, however the cost for partners and children quickly creates astronomical increases. The ability of a worker co-operative to provide decent healthcare can be undermined by also providing for family care. This creates a natural division between those that have family and those that don’t: the breeders vs. the non-breeders. Here is the non-breeder argument: Why should single members subsidize the cost of health care for those who chose to have children? People who chose to have kids should pay the extra costs related to having kids and not expect others to pay for their costs. For those with kids, the argument might be that worker security depends on a quality homelife. Healthcare is a human right. While the government may not acknowledge that, the worker cooperative should recognize that security of health is a worker issue. Workers cannot perform and give their all at work if they are worried about their family’s health. Cooperatives are a social economic engine and the family unit is a key part of society. Tomorrow’s members are, in many cases, the children of present day members. They deserve support as they will be supporting us when we are old and unable to work.

It is a difficult part of the equation, in the United States, because health care is so incredibly expensive. This rule, also touches on so many other areas. Co-operative need to consider means to support everyone that depends on them. Yes, people with children chose to have children, but children are also the future.

The eighth rule also points out the universality of worker co-operatives. We are part of the labor movement. I would even argue that we are the future of the labor movement! We cannot exploit other workers or destabilize their workplace. If we engage in an enterprise, we must make sure that set the lead on wages and benefits for our industry. We should never cross a picket line during a bonafide strike (or at least without the expressed permission of the labor union).

The sixth rule means that we need to elevate our membership. We cannot accept a board of directors ignorant of basic economics and finances. We shouldn’t accept that from the membership either. Don José María Arizmendiaretta, the spiritual founder of Mondragon, famously said that worker co-operative are either an economic movement based on education or and educational movement based on economics. We exist to create a quality of life for our members and to enhance our communities. Part of the strategy to attain that goal must be education of the membership. Not only should our members learn about economics, finances, and customer service, they must also learn about problem solving, conflict resolution, and a host of other disciplines (Union Cab has offered some training in SSL (Spanish-as-a-Second Language).

I think that the other rules speak for themselves. Utlimately, our work places should be the best. We may not make the lists of the “best places to work” because of how those lists make the determination. The point is that we collectively own our workplace and it should be a humane and friendly workplace to everyone and their families. The ergonomics of the workstations don’t need to “first class” in the sense of frivolous amenities, but they need to be functional, safe, and comfortable. The compensation should be fair and equitable. The voice of the workers should be heard throughout the organization. We should have established programs to promote and develop the next generation of leaders. Last but not least, we need to ensure that the co-operative will exist into the future to give those leaders a great place to work.

Next Week: Relations Within the Co-operative Movement

March 22, 2010

CICOPA: The Basic Characteristics of a Worker Co-operative

Filed under: Movement,World Declaration — Tags: , , , — John McNamara @ 1:47 pm

There are six basic characteristics of worker co-operatives in the CICOPA World Declaration of Worker Co-operatives:

  1. Creating and maintaining sustainable jobs, improving the quality of life for their members, creating dignity in human work, democratic self-management, and promoting community and local development.
  2. Free and voluntary membership
  3. The majority of workers in a worker co-operative should be members of the co-operative and the majority of a co-op’s members should be workers.
  4. The nature of the relationship with the co-operative is different from that of wage-based labor or independent contractors.
  5. The control and management of the enterprise is democratic, agreed upon and accepted by its members.
  6. Worker Co-operatives are autonomous and independent in terms of government and third party control as well as in the control of the means of production.

My co-operative, Union Cab, expresses the first characteristic in its mission statement: “To create jobs at a living wage or better in a safe, humane, and democratic environment by providing quality transportation to the greater Madison area.” I think that is a great summary of the first characteristic. This speaks to the core difference between worker co-operatives and other types of co-operatives. Our worker co-operatives exist to elevate the worker as a human being and to provide them the security and rights that they deserve as human beings. If a worker co-op isn’t engaged with this thought in mind, then it might as well be an US style ESOP or have a traditional ownership with a labor union representation. While we might joke about, there shouldn’t be self-exploitation in any worker co-operative.

The second and third characteristics bring up a serious challenge for modern worker co-operatives. I think that some worker co-ops misinterpret the “voluntary and open” clause. This isn’t to allow people to “choose” whether or not to accept their responsibility as an owner, it is to ensure that the co-operative doesn’t discriminate against visible minorities or create an enclave of “the right type of people”. It urges co-operatives to welcome all people and to create a co-operative that looks like their communities. I think that there is a danger in allowing a class of worker to exist in a worker co-operative who does not (through their choice or that of the co-operative) have a path that will lead to membership. Part of that danger is that the number of worker-owners will fall below 50%. In my mind, at that point, the worker co-operative ceases to be a “worker” co-operative and becomes an “employer” co-operative. This may create two classes of workers—those who are owners and those who are employees. Ultimately, I think that this will create different expectations for the groups. In addition, the workers need a controlling voice even if they allow other stakeholders.

The fourth characteristic brings up another point that I think is vital. Those of us engaged in a worker co-operative are a unique type of worker. We aren’t (and shouldn’t be) independent contractors and we aren’t wage workers. We need to quit thinking in that dichotomy even if the law doesn’t recognize us. If I had unlimited money and time, I would make the creation of a third worker, the worker-owner are legal reality. We need our own set of labor laws that recognize our control over the means of production.  This has many applications from labor standards to taxation. The US government’s rule show how bizarre the discussion is. They recognize a “partnership” of owners as long as each owner owns at least 2% equity. This means that the government recognizes a “partnership” of 50 people, but not 51. That is ridiculous. They need to recognize that organizations wherein the workers have “one person, one vote” are partners—are owners. This doesn’t mean that worker co-operatives should be free to self-exploit, but they should have more latitude to set their own rules and the tax laws should recognize that equity and profits work differently in a worker co-operative.

The last two characteristics speak to ensuring that worker co-operatives are not false fronts put up for other means. The membership must agree to the governance structure. If there is hierarchy, it needs to have control by the workers. Workers must have the ability to change their structure whenever they agree to do so. Lastly, just as all co-operatives must be independent, worker co-operative must work even harder at this. As a movement, we cannot tolerate pseudo-co-operatives masquerading as democracies when they are really controlled by government organization and politicians or as a means to defeat labor movements in emerging countries. Worker co-operatives should only be subsidiaries of a larger worker co-operative—and then, in a federated style similar to what Mondragon or the Italians follow.

The Basic Characteristics seem simple enough. However, there are many self-described “worker co-operatives” that do not meet them. These characteristics prevent the worker co-operative movement from being co-opted by multinationals seeking to enjoy good public relations while undercutting labor movements in emerging nations (or in developed nations for that matter. It instructs new worker co-op models such as The Cleveland Model in the way that a worker co-operative needs to be developed to ensure that the workers don’t become the well kept pets of social workers. It provides a check on existing worker co-operatives who need to grow and worry about the effect of difference types of workers entering their co-operative. There is no international or federal law defining worker co-ops in the US, Canada or the UK (although there should be), so it is up to those of us in the movement to hold each other up to these standards.

Next Week: Internal Functioning Rules of Worker Co-operatives

March 15, 2010

CICOPA: General Characteristics of a Worker Co-operative

Filed under: Movement,World Declaration — Tags: , , , , — John McNamara @ 4:39 pm

If you are a member of a worker co-operative, as defined in the World Declaration on Worker Co-operatives, then CICOPA considers you a “proponent of one of the most advanced, fair and dignifying modalities of labour relations, generation and distribution of wealth, and democratization of ownership and of the economy”.

Heady stuff!

The Statement on the Declaration begins with a discussion of six General Characteristics that leads up to the actual Declaration. They are, in a nutshell:

  1. Humanity has consistently sought a qualitative improvement in the way that it organizes work with a steady progress towards labor relationships that are more fair and dignified.
  2. There are three modals of work:
    1. Self-employment
    2. Wage earners
    3. Worker ownership, in which work and management are carried out jointly
  3. Worker Co-operatives are the highest level of worker development in the present world. They are based on the values and principles of the Statement on the Co-operative Identity (adopted by the ICA in 1995 and supported by the ILO’s Promotion of Co-operatives 193/2002).
  4. Worker Co-operatives commit to being governed by the Identity Statement. In addition, they accept the additional definitions of this Declaration in order to further the worker co-operative model and differentiate it from the other types of co-operation. This will improve grow the movement while preventing deviations and abuses.
  5. The Declaration is necessary to allow the co-operative movement and the world to focus on the importance of worker co-operatives.
  6. The Declaration encourages co-operatives from all sectors to provide membership status to their workers and grant recognition to human work.

In some ways, this is a “shot across the bow” for the fake worker co-ops. These co-ops are really employer co-ops. Usually it is a partnership of a few who then sub-let to “independent contractors” who are not offered membership. This is most common in taxicab companies. It is a shell game used to avoid tax burdens and, in some cases, labor law.

The general characteristics also take a bold step in proclaiming in a very subtle way the old Wobblies motto: “Labor Creates All Wealth!” The Declaration encourages all co-operatives to respect their workers, to treat them as a significant stakeholder group and to create a membership class for them. This is very radical in co-op circles (at least US circles). Most Ag co-ops in the US do not allow members to work for the store. Consumer co-ops often only allow one or two workers (who might also be members) to serve on their boards. Usually, that service comes with a browbeating to ensure that they vote against their class. One consumer co-op that I know takes great pains to lecture their worker members to “think like an owner, not an employee”. As if the “employees” do not have a vested interest in the success of the consumer co-operative!

Quebec is a hot bed of worker co-operation. Therefore, it should come as no surprise that the work being developed there follows this concept. In Quebec, the work has been laid to create the “New Co-operative Paradigm”. I can tell you that this discussion was the most popular of the St. Mary’s MMCCU program for my cohort. Its creator, Daniel Coté speaks at length about the need to develop social cohesion within a co-operative. A key part of his paradigm utilizes the value of Solidarity. Specifically, he sees the core success of the co-operative of the future as the solidarity between the worker and the consumer (by which I mean the consumer, the farmer, the housing consumer, and financial consumer).

The World Declaration on worker Co-operatives may not be the US Declaration of Independence, however, it does present a challenge. It presents a challenge to all worker co-operatives to examine how they operate. It challenges the fake worker co-ops, that are really employer co-operatives to own up to the falsehoods. It encourages all co-operatives to honor their workers, the people who actually produce the wealth and the benefits that the members enjoy.

Next Week: Basic Characteristics

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