The Workers' Paradise A Discussion of Workers Cooperatives and Building the New Economy

February 24, 2014

The Big (Wide) Tent of Worker Ownership

Last month, I flew to Washington DC for a day to represent the US Federation of Worker Cooperatives as a member of the organization. The event was a series of meetings on Capitol Hill sponsored by the American Sustainable Business Council (ASBC)We met with staff from US Representative Chaka Fattah (PA-2), Senators Harkin (IA), Franken (MN), Warren (MA) and Bennett (CO) from the Senate Committee on Health, Education, Labor and Pensions (HELP). We wrapped up the day with the main event: a meeting with Assistant Secretary of Labor (Employee Benefits Security Administration) Phyllis Borzoi. Along with me, representing my coop and the USFWC was Joe Rinehart with the USFWC, and representatives from Eileen Fisher, Dansko Shoes, and New Belgium Brewing. The latter organizations are all 100% worker owned Employee Stock Ownership Program (ESOP) enterprises. We also had people from the National Coop Business Association and Mondragon USA.

It was, as the title suggests, a Big Tent for worker ownership.

It so happens that I am reading The Citizen’s Share (Blasi, Freeman and Kruse) right now. This book chronicles the varied and rich history of worker ownership in the United States from the earliest days of the revolution until today. It notes that 47% of US businesses have some sort of worker ownership from the 100% owned companies named above to Google and Microsoft in which all workers have the opportunity to participate in the risk of the company (apparently Bill Gates’ ownership stake is now only 6% of the company he founded).  The message of the day was to discuss the importance of worker ownership as a sustainable model for economic growth in the United States.

I enjoyed this group and the approach. Too often, the concept of sustainable business only gets used to discuss environmental issues such as climate change. The plight of modern day employees tends to be ignored. This allows organizations engaged in Union busting tactics to present themselves as good corporate citizens. I would argue that sustainability (both for the climate and the economy) can only occur if workers are treated well and get a share of the pie that they create.

ASBC’s role is to bring together the worker owned businesses and unite the ownership movement. One of the problems is that there are some bad actors that use the image of worker ownership without providing the benefits to the workers. This is not unique to our country, but the lack of Federal understanding of worker ownership and a corporation laws that vary from state to state make it difficult to understand when workers really benefit from worker ownership.

For example, the US government clearly recognizes ESOP, but has no understanding or definition for a worker cooperative. The USDA recognizes Producer Coops and this language tends to be used by the IRS to determine if a business is a cooperative for federal tax purposes. ESOP really aren’t a type of business as much as they are a retirement plan. That is an important distinction between and ESOP and worker cooperative (and an area where the two concepts could create a lot of synergy). Ass’t Secretary Borzoi remained skeptical from her experience policing ESOPs that have used the structure to evade the Fair Labor Standards Act, but was impressed with the group at the table.

In January, we began a discussion with the Federal Government about worker ownership in the modern economy. It was clear to all of us (at least in the practitioner world), that the Wagner model of industrial relations has become outdated. We need new rules and definitions that help guide a national economy in which cooperatives and ESOPs operate across state lines (thus triggering Federal oversight) and engage in worker ownership and control of the workplace. We need to create laws that address a large workplace in which the workers really control the means of production through a one-worker, one-vote method (regardless of the type of organization). We, in the coop world, also need to strengthen the social definition of worker cooperatives (promote the CICOPA Oslo Declaration) and raise our profile. We can’t and shouldn’t be constrained by the legal definitions of the individual states. A democratically run ESOP with 100% worker ownership (even with workers having different shares of ownership) is as much a cooperative as Ch. 185 coop in Wisconsin with only 60% of its workers as members.

My only disappointment was that we did not meet with any GOP connected staffers. I truly believe that our movement is non-partisan and resounds with all of the political parties in this country (major and minor). If we are building a big tent, it will be necessary to look beyond party labels.

November 25, 2013

Putting Your Money Where It Helps: Become a US Worker Coop Sustainer

Filed under: Movement — Tags: , , — John McNamara @ 12:29 pm

There is an old saw that “money is like manure, it only works if you spread it around!” Too often money gets conflated with “profit” and the idea of raising capital seems a bit wrong. As a result, worker movements have a tendency to live on shoe-string budgets and hinder their ability to effect change in the world. To this, I am reminded of the scene in “It’s a Wonderful Life!” when Clarence proclaims, “Oh, we don’t have money in Heaven!” George retorts, “Yeah, well it comes in pretty handy down here, bub!.”

Our movement to create a more sustainable economy based on humane and democratic workplaces requires that we support our organizations and put our money towards building that world that we want to see. That is why I am asking you, dear reader, that you step up and support the US Federation of Worker Cooperatives by becoming a sustaining supporter. A minimum donation of $10 per month will go a long way towards help this apex organization represent worker coops, provide support to existing and new coops, and help build the worker coop community.

In addition to “being the change” that you want to see, you also need to fund it.

The US Federation has done a lot since its inception in 2004. It has produced four national conferences some of which included special volunteer actions (such as in New Orleans in 2008), created the Democracy at Work Institute and the thriving Democracy at Work Network of Peer Advisers. The USFWC has worked hard to raise the profile of worker cooperatives as a sector of the larger cooperative movement by nominating candidates for the NCBA board, demanding a worker coop seat on that board, participating in last year’s White House meeting on cooperatives, and attending conferences and apex level meetings through out the world. The USFWC is poised to begin helping to draft new laws to enhance and protect our movement. The USFWC provided leadership and support in the creation of CICOPA-North America.Almost all of this has been accomplished with half-time Executive Director and a Quarter time Membership coordinator. Our movement needs our support and that means that as individuals, we need to step up.

I realize that there are a lot of demands on our time and money. If you are in the position to send $10 a month or more to an organization that works to build a better, more sustainable world based on humane and democratic workplaces, please act on that feeling of solidarity hit the link at the top of this post and sign up today!

August 22, 2011

The Open Door Policy of Worker Co-operatives

Filed under: Pensimientos — Tags: , , , , , — John McNamara @ 7:00 am

The 6th Principle of Co-operatives is called, somewhat reflexively, “Co-operation Among Co-operatives.” I have talked about this in a previous post. Today, I want to focus on it from a different perspective provided to us by the spiritual guide of Mondragon, Father Arizmendiaretta. He wrote: “It is risky to make each co-operative into a closed world.We have to think of the inter-cooperative solidarity as the only solution to other problems of growth and maturity. We must think about a vital space appropriate to our circumstances.” (Reflections, 488)

In difficult economic times, it is tempting to close our doors and focus internally. Sometimes the argument is made that very survival of the co-operative is at stake. This is exactly the wrong time to close doors. It is the most important time to open them. It is only through solidarity that we find our strength as workers. This is true to for the entire labor movement whether they are using the traditional Wagner labor union (in the west) and social labor unions elsewhere, or the collective and cooperative model. We need each other to survive. Don’t think that the people who actually control the economy don’t know this–they engage in their own form of solidarity and destroy ours. They take great pains to convince our fellow workers to act against their class interest.

We need to engage each other more than at the regional, national and international conferences; however, these are important events. These events help us to start talking and formulating the physical structures that we will need to make cooperation among cooperatives more than a marketing tool. Why is that important? Look at the so-called P6 Cooperative Trade Movement. It sounds nice. It sounds co-op. It even uses the .coop internet suffix. But notice how the definition turns the co-operative movement into something else–the way that a product gets a P6 designation isn’t by being produced by a co-operative:

“Any P6 member can nominate products that meet at least 2 of our 3-point criteria:

  1. Small farmer or producer
  2. Locally grown or produced
  3. From a co-operative or non-profit organization”

Under this concept, privately owned farms (and what constitutes a small farmer or producer) or locally grown products  have an equivalence with co-operatives. More importantly, non-profits, which are notoriously undemocratic, have an equal stature with co-operatives. While this may work as a marketing tool for the food co-ops and the coffee roaster (a worker co-op) involved, it unnecessarily waters down the co-operative identity which, in the long run, allows Nestle and other corporations to easily co-opt the movement by creating non-profits to compete (and even join the P6 movement) with bona fide co-operatives. In my community, each and every one of my co-operative’s competitors would qualify despite not being a co-op.

The P6 model works for the consumer co-op world (and those providing it with goods) despite its inherent flaws; however, what should worker co-ops do to promote solidarity amongst ourselves in a way that builds our movement not sow the seeds of our destruction? Here are a few ideas:

  • Join your apex organization: in the United States, it is the US Federation of Worker Cooperatives. In Canada, it is the Canadian Worker Co-operative Federation.
  • Get involved in your organization: form work groups, communicate with directors, ask them to speak at your co-operative meetings.
  • Join the Worker Co-operative Federal Credit Union (unchartered). This has an incredible potential for our movement. When a worker co-operative joins, then all of its members may join as well. This could become our Caja Popular Laboral.
  • Shop Worker Co-op: I can tell you that I only buy Worker Co-op Coffee (Just Coffee and Equal Exchange). In Madison, I can buy worker co-op bread and granola, shop at a worker co-op pharmacy (Community Pharmacy), support a worker collective community supported radio station (WORT-FM), buy books from a multi-stakeholder bookstore (Rainbow Bookstore Coop).
  • Join your local network of worker co-operatives or help to create one.
  • Work with the WCFCU and local, regional and national networks to create a solidarity fund. Imagine if the 80 member co-ops of the US Federation committed 10% of their annual surplus to a solidarity fund and another 10% to a development fund as the Mondragon co-operatives do? Our co-ops would be able to navigate the tough times and take advantage of development funds to expand when the market beckons.

The co-operative community sees solidarity at a value. Workers see solidarity as a value, but also as an integral part of building a better world. We don’t support each other because we want to make money or define a difference between us and Whole Foods. We support each other because we are trying to build a better world, because we are engaged in social transformation and because, ultimately, our movement (whether you consider it part of the labor movement or the co-operative movement) is ultimately about the individual humans in our lives and helping each other to survive and expand, not just be cooler capitalists.

October 11, 2010

Creating a Roadmap to 2040

Filed under: Movement — Tags: , , , — John McNamara @ 11:48 am

In high school, one of my teacher, John Gray, would joke about giving a pop quiz in which the students had 5 minutes to write down everything that they knew. The joke was that given the enormity of that task, most people just freeze. The result is a blank sheet of paper without even the basic equation 1+1=2.

In a sense, that is what I did last week without thinking about it. How can we possibly imagine the worker co-operative world of 2040 just like that? Obviously, we can’t know what shape the environment will be in (although I think we will be closer to 350 ppm if there are more co-ops than if there are less). We probably won’t see a wholesale revision of our global economy without a major event. Of course, that event might be so cataclysmic that we could be focused on basic survival.  Nevertheless, I still think that we need to start thinking long-term and developing some ideas.

One area, for the United States, is diversity. there are approximately 300 worker co-operatives in the United States. About 70 of them are members of the US Federation of Worker Co-operatives. I spent a few minutes categorizing them by sector the other day and here is what I found:

Grocery Coops 6

Design/Print Coops 5

Development, Bakery, Bike, Dayworker coops 4

Importer/Coffee, Media, ISPs 3

Cleaning, Finance, Bookstore, Landscaping/remediaton 2

Furniture, Industrial, Photovoltic, Cafe, Brewery, Tech, Engineering, Interpretors, Taxi, Childcare, home care,  1

One way to think about the future is to think about what industries we currently don’t operate within and how do we get there? What are the basic services that a community needs and can we find a way to develop a worker co-op to meet them? A large of of this has to do with the demographics of our country over the next thirty years.

As I mentioned last week, I will be 76 in 2040. I was born in the last year of the baby-boom. That means that in the next thirty years almost all of the baby boomer will have retired. Those that own business (small mom-and-pop shops) may not have heirs interested in running them. This group may be very interested in converting their business to their workers.

Could we, as a movement, plan to triple the number of existing worker co-ops each decade? That would create a population of 8,100 worker co-ops by 2040. Part of this can be accomplished through succession planning, but it can also be done through replication. The Arizmendi and WAGES models have already more than tripled their original size in just 15 years or less.

I’ll spend the next couple of weeks on this theme of 2040: how do we grow the movement? how do we make it an actual movement? How do we support each other? How do we create a path to 2040 and what do we realistically want to see when we get there?

September 23, 2010

A Vision of Our Movement (or a beginning of a discussion)

Filed under: Movement,Worker Rights — Tags: , , , — John McNamara @ 8:00 am

Today, as this goes to post, I am about to start the first day of a two-day retreat for the US Federation of Worker Co-operatives board. The last several posts had a lot to do with this event as the Federation enters it sixth year. We have zero turn-over on the board and an opportunity to develop some clear vision and institutional infrastructure this year. It also marks the end of the original five year plan drafted back in Minneapolis in 2004.

Yesterday, I ended my post with this short comment: “Externally, we as a movement, need to create the basis for seeing a syndicalist worker movement as a viable means of managing the economy. We need to use our institutions and our co-operatives to present a true alternative to the dominant paradigm of capitalist and theft of labor. In this regard, we need to turn away from the rather insular Mondragon model and borrow a tactic from a very different guide and trailblazer: Milton Friedman.”

Yes. Milton Friedman has something to teach us. Under his leadership, he corrupted Breton Woods, turned the International Monetary Fund into a tool for economic extremists, destroyed Keynesianism, led the Chinese Communist Party to enroll entrepreneurs and created a thirty-year legacy of expanding the gap between rich and poor. Obviously, I think that his ideas are bankrupt and, to be honest, it would be hard for anyone to show where they have truly succeeded without the force of a military behind them. But, I am not here to discuss Disaster Capitalism. Naomi Klein has already written an incredibly power (and very well documented) book on this topic: The Shock Doctrine. You should add it to your list if you haven’t read it yet. I am more interested in how Friedman managed to expand his teachings from the University of Chicago to take over the world.

Friedman wasn’t interested in mere academic arguments. He believed in direct action. He put his ideas into practice. More importantly, he created plans and ideas. He made himself and his “Chicago Boys” a force in the world by showing up at Congressional sub-committee meetings and countless other functions. He realized something very important.  Economic movements cannot relegate themselves to being merely social movements. They must also be political movements. The Fabians understood this as well. Both the Chicago School and the Fabians churned out papers and proposals, attended meetings, and pushed their cause. The result is that when the opportunity struck, they had the ability to act. The Fabians took a long-term evolutionary approach, however, and really only succeeded after their big guns (George Bernard Shaw) had passed away leaving little legacy for the next generation. Friedman, on the other hand, acted quickly. While at first he operated in conjunction with US Foreign Policy and Cold War politics, he quickly understood that creating change at the end of a bayonet could never produce lasting changes (most of this discussion comes from The Shock Doctrine). Of course, I bring Friedman up mostly for the shock value, but he knew how to push his message.

What does this mean for our movement? At the National Worker Bi-Annual Conference held in Berekely last August, Executive Director Melissa Hoover noted that her hope is for worker co-operatives grow to the point that they are no longer considered the “alternative” but the “model”. So, how do we really get there?

In Haiti, after the earthquake, the proposals for rebuilding came from the usual neo-liberal sources with former US President Bill Clinton invoking their anthem: “Don’t let a good disaster go to waste.” In the rebuilding of Haiti, the discussion in the press was about privatizing government controlled businesses and services. Where was the worker co-operative plan for rebuilding the country along a democratic worker friendly economy? Well, it doesn’t exist yet. A couple of years ago, I asked Madison Mayor David Cieslewicz why co-operatives aren’t even mentioned when the city discusses development plans. He said, because you don’t show up.

We need to start creating plans and finding places to implement them. We need to engage our academics and help them become secular missionaries along the lines of our Co-op Priests from yesteryear. In Canada, they have that tradition and are working to put their ideas into practice. Isobel Findlay from the University of Saskatchewan presented work that she did last spring on creating co-operative options for single women. The Canadian Cooperative Association in conjunction with several research partners (led by Sonja Novkovic) are expanding St. Mary’s work on the Co-op Index to the larger community called Measuring the Co-operative Difference. We, as a movement, need to join them and start creating the programs, the plans, the position paper, and the buzz.

  • We need to develop “Best Practices” for worker co-operative in the United States that give our movement and identity and common language. Best Practices that combine the co-op identity with the distributist and syndicalist models. Best Practices that support us as workers and create solidarity with our external stakeholders (consumers, family, community).
  • We need to develop urban and rural planning guides for using worker co-operatives to meet community needs in a sustainable manner.
  • We need to develop a true alternative to neo-liberalism that provides a real plan of economic and environmental sustainability for communities and honoring the labor of the men and women who create the wealth of this country. Plans that generates wealth and distributes it among the people who create it.
  • We need to find communities that will work with us to implement our plans and see them to fruition (like Cleveland and the Evergreen Initiative only with a stronger sense of worker control). There are a lot of people doing this now–some are getting paid, a lot are not. The work of John Logue was certainly along this line and we need to continue that.
  • We need to create spokespeople for our movement in every major community who can speak a common economic language of worker co-operation and support these ideas at City Council Committees, State Government and even Congressional Subcommittees.
  • We need to be able to show up when the disaster strikes with our plan. We need to develop our larger ideas and models so that they are seen as a legitimate challenge to the status quo even without the pedigree of the University of Chicago or the Harvard Business School.
  • We can do most of this in bits and chunks, but I fear that has been our path and the result is that we get bits and chunks, we get people re-creating the wheel, and we get into a lot of long, drawn out debates over process and semantics. For all of these reasons, we really need to an institutional structure to help collect and then sift and winnow the ideas. Then we can debate them, take them out for  a spin and start creating our “ism”. The other side has a lot of these groups: Heritage Foundation, American Enterprise Institute and the Brookings Institute.
  • We have the UW Center for Co-operatives, which does great work, but they are grant driven and have limitations placed on them as a tax-payer funded entity. We need something for worker co-operatives and for building our model. We need our policy wonks to be able to come together with the time to develop. We need our community organizers and co-op developers to help put those ideas into action. We need our charismatic folks to bring that message to the politicians and get them to start seeing us as a viable alternative. Mostly, we need to create a national definition of ourselves so that others don’t define our movement for us and there are already plenty of people trying to do just that.

Is this were the Democracy at Work Institute should go? How would we create a non-profit worker co-operative institute to further our movement and development along the distributist and syndicalist lines? More importantly how do we fund it so that the institute can actually do more than have phone conferences every quarter?

I’m ending this series of thoughts with a lot more questions than answers. While writing, I took a quick break and went for a walk. While walking, I was reminded that February will mark the 20th anniversary of my first election to the board of Union Cab. At the time, I was still planning on being an English professor. In 1995, as president, I answered a survey on worker co-ops from a Canadian researcher. When I asked him later for results, he said that there weren’t any. It turns out that he couldn’t find enough worker co-ops in the US to conduct valid research. Nine years after that, the first national worker co-op conference was held in Minneapolis and next year, just seven years later, the first North American Worker Co-operative Conference will be held in Quebec City, Quebec. There are almost 300 identified worker co-ops in the US with about 1/3 of them members of the US Federation. We are about to certify the first cohort of Worker Co-op Peer Advisors.

We have the momentum right now, but we need to find a way to channel it. We need to find a way to push our movement to the next level. We have to find a way to help our co-ops educate their members on the co-op difference and, in turn, help create the energy needed to maintain the momentum and extend it. I intend to spend the next thirty years, if I have to, to figure it out and I hope that you join me–and I now I have to go join a meeting.

Thanks for getting through this five-day post–I’d love to hear your thoughts.

September 22, 2010

Can Syndicalism Help Worker Co-ops?

Filed under: Worker Rights — Tags: , , , , — John McNamara @ 8:00 am

If you talk to a lot of co-operative developers and community organizers in the United States about Mondragon, you will likely hear them extol the virtues of the Caja Popular (former the Caja Laboral Popular). The bank owned and controlled by Mondragon played a major role in the development of the Basque co-operatives and many see it as the key to creating Mondragon in America.

Well, who wouldn’t want a bank that caters especially to worker co-operatives? But is this really the secret to Mondragon success? It certainly played a key role and provided a method of developing new cooperatives, creating strong business plans, and otherwise ensuring the financial viability of the co-operatives. However, keep in mind that the banking system of Spain in 1959 was hardly a modern system and it really wasn’t able to grow due to the isolation of the nation under the heel of the Phalange. The CJP gave Mondragon access to capital and that is something that any worker co-operative can use.  I would argue, based on experience, that successful worker co-operatives have no problem accessing capital from today’s financial institutions and we do have several development funds available in the United States including the Northcountry Co-operative Development Fund’s Worker Ownership Fund*. Granted, the availability of start-up capital has been much harder to come by and there are few, if any, Angel Investors in the worker co-operative world. A worker co-op bank can be started at any time. All that needs to happen is for the co-ops who want to create our version of the CJP to simply pool their assets and hire a bank manager (yeah, I know that it isn’t THAT simple, but bear with me).

I think that the stronger part of the Mondragon model is the Social Council. Unlike the social committees of most co-operatives, this group doesn’t plan the summer picnic and winter party. The Social Council represents workers as workers. It is essentially a watch dog on management and the governing councils. This body within Mondragon provides a model for our co-operatives as it infuses the distributist structure of the worker co-operative with a definite syndicalist voice.

Syndicalism was made popular in the United States by the Industrial Workers of the World. The Syndicalist rejected both the capitalist and socialist world views. They sought, instead, to create a world in which the basic political unit was not the dollar or the voter, but the worker. They saw a structure that is quite similar to Mondragon’s structure with individual worker collectives connected by industry and sector into a regional, national and international alignment. A colleague of mine discussed his view of neo-syndicalism on this site back in December of 2009. While Fred speaks about direct action along the lines of the Buenos Aires workers featured in the excellent documentary, The Take, the structural concept of syndicalism already exists. It involves pulling our workplaces together and creating a strategy. It also means making sure that our worker co-operatives really have a syndicalist basis and aren’t simply capitalist partnerships trying to sneak in to good party.

Arizmenidiaretta would have been quite familiar with the logic and ideas of the Anarcho-Syndicalists of Barcelona as they were heavily involved in the fight to save the Republic in 1936. Certainly, Mondragon arose like a Phoenix out of the ashes of the Republic. So, we should not be surprised to see that the Mondragon co-operatives developed  distributist and syndicalist institutions. Both offered third ways between the state socialism of the the Fabians and the “invisible hand” of the Free Marketeers.

It is in this juncture that the distributists and the syndicalists converge. To me, that is the lesson of Mondragon and what should be imported into the United States worker co-operative movement. This also appears to be the pathway for co-operative development as envisioned by Mondragon and the US Steelworkers. A renewed syndicalist movement in this country could well be the pathway to creating a distributist society and overcoming the culture of wage and chattel slavery. The IWW’s great slogan, after all, was “Instead of saying ‘A Fair Day’s Pay for a Fair Day’s Work’ we say ‘Abolish the Wage System!'” We need to start changing the world to one that values the worker. We need to bring back syndicalism as not just a counter-weight to ne0-liberalism, but with the goal of it displacing neo-liberalism as the preferred economic model for sustainable communities.

The creation of a new syndicalist movement should be quite natural to those of us who have chosen worker co-operation, but it is an easier thing to think and blog about that to actually create. For one, my guess in that only one in a hundred of the workers in our co-operatives could define syndicalism, let alone distributism or any of the other economic models. Given the amount of neo-liberal arguments that I hear in my own co-operative and other debates, I can tell you that many worker co-operative members do not see a significant difference between capitalism and co-operation.  Just recently I talked to a fellow member who supports keeping the Bush tax cuts because “I want to rich some day.” <Heavy Sigh> In this environment, spouting the slogans of the IWW from a hundred years ago will likely generate more eye-rolling than anything else.

How do we create what we need without sounding like we time traveled from 1967? or 1907? Another lesson from those Co-op Priests: Tompkins, Coady and Arizmendiaretta:  we need to create educational programs that are modern but still promote the differences between the “one-dollar, one-vote” of capitalism and “one-worker, one-vote” of co-operative syndicalism. We need an education programs and we also need to create incentives for people to participate in them. We need to act internally and externally.

Internally, we need education programs and a constant focus on how we are different. How does Rainbow differ from a traditional grocery store? How does Union Cab differ from a traditional cab company? How does Co-operative Home Care differ from a traditional home care service? You and I might easily answer that question, but can every member of your co-op answer how their co-op really differs from the capitalist competitors in your industry? I don’t mean simply describing the structure (which would be great) but the underlying concept of the organization. Does the analysis stop at “We own it!”, if it does, then the understanding may be a mile wide, but it is only an inch deep.

In addition to the educational process, we need to create the social committees. We can call them Steward Councils, or Member Advocates, or any language that our community knows and understands. However, we need to create real syndicalist functions within our co-operatives. These councils need to do more than simply help members file grievances and present ideas, they can’t simply mimic the antagonistic labor relations from the factory. They need to educate people on their history as a worker in addition to the former educational process of the co-operative. They need to create solidarity among the entire workforce (not against management or any other group, but among all those who work including the leadership) and they need to be the voice for the workers while the board speaks for the members and management speaks for the business.

Externally, we as a movement, need to create the basis for seeing a syndicalist worker movement as a viable means of managing the economy. We need to use our institutions and our co-operatives to present a true alternative to the dominant paradigm of capitalist and theft of labor. In this regard, we need to turn away from the rather insular Mondragon model and borrow a tactic from a very different guide and trailblazer: Milton Friedman.

More on that, tomorrow.

June 28, 2010

The Democracy at Work Conference

Filed under: Movement — Tags: , , , — John McNamara @ 2:18 pm

I took last week off due to a couple of things. The most important of which involved my wife and I becoming “Domestic Partners” in Dane County. Five years ago, we married ourselves in a handfasting ceremony at one of the area’s First Nations* “mounds”. We decided to seek legal status for some personal reason, but it was also a fun experience. This week, I was going to continue the discussion about how co-operatives should treat their workers. However, three events have caused me to delay it. The first involves my co-operative, Union Cab, which will be having two informal membership meetings this week. The first involves dealing with frustrations about bureaucracy and “management’s punitive practices”** among other angst driven issues. The second involves my co-operative’s attempt at creating solutions for dealing with our current “smokey hut” where people currently enjoy their smokey treats but which will likely be illegal when Wisconsin’s smoking ban goes into effect on July 5th. The former has been called by a couple of stewards, the latter by the General Manager.

The last reason is that a couple of key deadlines will be upon us. As President of the US Federation of Worker Co-operatives, I find it necessary, even obligatory, to push our annual conference. The Apex organization of worker co-operatives in the United States will be holding its annual meeting and biannual conference in Berkeley, CA from August 6-8.

The deadline for a discounted registration is June 30, 2010.

The deadline for registration is July 5, 2010–you can still attend after this date, but we may not be able to count you in on the dinner and meals. REGISTER TODAY!

With the theme, “The Work We Do Is The Solution” hundreds of worker cooperative members and cooperative developers will meet at the University of California—Berkeley from August 6-8, 2010 to share information, strategies and tactics to make their cooperatives stronger as well as to help create new worker cooperatives. The US Federation of Worker Cooperatives sponsors the conference and holds its annual meeting.

Texas Populist Jim Hightower will be the keynote speaker. Other featured speakers include the Evergreen Cooperative project from Cleveland (featured in TIME and The Economist as an innovative economic development strategy), the Toxic Soil Busters youth cooperative from Worcester, MA which has city contracts to do lead remediation, and representatives from EdVisions, which is changing the face of public education by developing teacher-run small charter schools across the country.

USFWC Executive Director Melissa Hoover emphasized the theme of the conference, noting that, “Worker cooperatives can be economic engines that generate the surplus we need to tackle the big problems. They can create jobs that offer opportunities for meaningful personal and professional growth.   They can build community power and shared wealth.  They can choose to conduct business in a restorative and sustainable way. They can create a powerful values-based and principled framework for making decisions about work, industry, and the economy.”

The conference will be held at the Clark Kerr Conference Center. The 2010 Conference may be one of the most important meetings of the decade for those interested in creating a more sustainable economy.

The USFWC has created a nation-wide Peer Advisor Network to assist member cooperatives and start-ups with guidance from people working in worker cooperatives. Along with new capitalization efforts underway, there has never been a better time in the United States to start a worker cooperative. We have created a strong support structure for fledging cooperatives as well as existing cooperatives who may need a hand up.

We have worked hard over the last four years (since the NYC conference) to create a vibrant national movement. We currently sit on the edge of success. This is our moment to surge forward. If you read this blog with any regularity, we need you in Berkeley. We need you in the movement. The time for worker co-operaters and those that believe that our economy should mirror our values need to act today.

See you in Berkeley!

February 18, 2010

The Cleveland Model–Take One

Filed under: Movement,The Cleveland Model — Tags: , , , — John McNamara @ 7:00 am

Recently, The Nation sent out a broadcast with an article about the emerging worker cooperatives of Cleveland asking those of us in the bog-o-sphere to comment. As someone who has been an active member of a worker co-operative for over 20 years and involvement in the national and international movement for the last 4 years, I definitely have some ideas.

The folks are really doing this right. I spoke with one of the organizers of Evergreen Laundry a few years ago. They lined up the customers as part of the planning stage. The idea wasn’t to struggle as so many worker co-ops do in the beginning, but to start-up with a strong source of work (this was touch and go, but it appears that Case Western and other institutions will be sending their laundry to Evergreen). Second, the Mondragon style commitment to return 10% of surplus (the article calls it ‘pre-tax profits’) to a development fund. Third, I like the commitment expected from the workers that may require a long-term buy-in—I think that low-cost buy-ins have a tendency to devalue the membership or ownership aspect of the experience.

I’m a bit stunned at the amount of capital amassed. One of the well identified stumbling blocks for worker co-operative development in the United States has been the lack of access to capital. I realize that there are a number of groups, involved, I would like to know where  the $5 million came from and what strings are attached to it. I’m not casting aspertions, but I just have to assume that these organizations that ponied up the start-up cash expect to getting something out of the project and won’t want it to fail. A look at their website suggests that all three of the start-up co-operatives have the same group of customers (Cleveland Clinic, University Hospitals, Case Western Reserve, City of Cleveland, and Housing Network). This project is a great example of what can happen when different organizations working around economic justice, worker rights and sustainable communities break down the “silos”. I do hope that other communities learn from the Cleveland model especially Milwaukee and Madison (sadly, Madison’s current Economic Director doesn’t really seem to know much about that subject other than the standard refrain that government should get out of the way).

This does turn the traditional model on its head in that this was a top-down organizing effort. This likely helped with fund-raising as established rain-makers were able to tap into professional relationships where a gaggle of workers would likely be turned away with a shrug. I’m not so sure how I feel about that. I’m happy to see the effort up and running, but I wonder how much of the paternalism associated with a  top-down organizing effort will interfere with the transition to a true worker democracy in which the workers may make decisions that the founders fundamentally disagree with. I can see a dynamic where there could be a difficult (even fatal) transition in generational succession. This may be exacerbated by the management being chosen from a management class that may not really have anything in common with the workers. Will future managers be developed within the organization or sought within the existing worker co-operative movement?

Another issue with the top-down model involves labor relations during the start-up phase. Who will decide who gets off of probation and becomes a member before there are members? Will there be an appeal process? How will disputes get resolved without ownership or a labor union? They are creating good paying jobs (although the article didn’t really mention expected pay and benefits) in a very depressed area. I imagine a lot of people are looking forward to the work and see the ownership part as an abstraction. Working is a worker co-operative is not for everybody (at least not without a lot of therapy and training). We don’t refer to the Yellow Family at Union Cab for nothing, the relationships are very personal and very difficult to walk away from when times get tough. The intimacy of the work relationships due to ownership can make the disputes powerful and difficult to manage. Not everybody is ready for that or can deal with it.

This brings up my other concern: how will these co-operatives interact with the co-operative movement? A similar co-operative is Co-operative Home Care Associates of New York that generally doesn’t interact with the larger movement despite being the largest worker co-operative in the country. Will the Cleveland Model co-operatives join the US Federation of Worker Co-operatives? Will they subscribe to the CICOPA World Declaration of Worker Co-operatives? Will they subscribe to the Statement on Co-operative Identity?

I raise the last question because it seems that there is a trend to see co-operatives and worker co-operatives as an extension of the not-for-profit model of community development. We’re not. The growth of social workers creating co-ops is, I think, a danger for US co-operatives as they become more identified with a movement that tends to enable the worst aspects of capitalism. The rise of Policy Governance Model among consumer co-operatives is, in my opinion, a travesty that has allowed small cabals of managers and directors to create fiefdoms and barriers to expressing the user principles as well as the values of co-operatives. I would hate to see that cancer emerge into the worker co-operative world.

Finally, I have a small bone to pick. The authors make this comment, “These are not your traditional small-scale co-ops.” <COUGH, COUGH!> Union Cab with 230 members, Rainbow Grocery approaching 250 members, CHCA with over 1,000 members have been “traditional “ co-operatives for over 25 years. Granted the common stereotype is 5-10 member organizations, but the Cheeseboard and Arizmendi co-operatives all have over 30 members. The Cleveland co-ops are only looking at around 50 jobs per co-operative (according to The Economist). What makes these co-ops Mondragonish is the funding and mutual support mechanism, not the size of the organization.

I think that the Cleveland Model is an exciting development in the worker co-operative movement. However, it is one aspect. Our movement has been active for decades if not centuries. I am glad to see journals such as The Nation finally discover the co-operative model, although they probably could have covered the Democracy at Work Conferences (2006 in New York City and 2008 in New Orleans, and the 2010 conference in San Francisco). Perhaps they could ask their colleagues over as Dollars and Sense for tips on covering worker co-operatives.

To me, the best thing about the Cleveland Model is that it promises to open up some serious capital for worker co-operative development. It will still need to be determined how the strings attached to that capital work. It will also need to be seen if a top-down organizing model works to create a truly democratic work place and governance model or becomes another version of ESOP. Finally, after all the news of 2009, it is nice to be in a movement that isn’t entirely invisible any more.

We can, however, definitely agree that CLEVELAND ROCKS!

February 15, 2010

#23 Co-operation Among Co-operatives

Filed under: Identity Statement Series — Tags: , , — John McNamara @ 8:57 am

I usually make the snarky comment that the only time that I hear about this principle is when some slacker co-op wants a discount or donation. . . that is horribly unfair, of course. Also, we should discount each other—we need to do what we can to keep the money inside the co-operative community!

This principle, however, brings the value of solidarity, caring for others and social responsibility into the principles. Co-operation provides the basic form of human survival. The Folks at Sesame Street get it right: Co-operation Makes It Happen!

The Statement on Co-operative Identity uses the following definition: “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.”

This, of course, means that those of us in the North America should all join either the National Co-operative Business Association or the Canadian Co-operative Association as well as our sector. In the US, that would be the US Federation of Worker Co-operatives and in Canada, the Canadian Federation of Worker Co-operatives. We shouldn’t just join, but should actively engage these organizations. We also should put aside some biases.

One of the moments in my life that proved (to me) that I would never be a tele-marketer was when I fulfilled my duty as a USFWC director by calling members and checking in. This one high-tech co-operative contact told me that he wasn’t going to renew because he attended the New York Conference and thought that the workshop that he attended was allowed to be taken over by Industrial Workers of the World (IWW) ideologues. It didn’t matter to him that this was a third party organization or that other attendees should have the right to express their views. He wanted a workshop that talked about business, not this political crap.

Well, I couldn’t help but notice that he seemed to be speaking for the entire co-op even though I doubt that he actually presented a fair view of the federation to the other six members. I wonder if he even mentioned it. My interaction made me think that it was a “co-op” but that this guy was really the boss—which then makes sense that he didn’t want to hear from the IWW lest his fellow members catch on that co-ops should be a democracy.

In any event, the point of building the movement isn’t to bring immediate gain to one’s co-operative. It is to build the co-operative image as a valuable community asset. Arizmendiaretta noted, “It is a mistake to each a co-operative a closed world. We must consider inter-cooperative solidarity the only resource to be used to forestall other problems of growth and maturity: we must consider a growing development adapted to circumstance.” The reality is that we (worker co-operatives) have a lot to teach each other. Mondragon speaks of the concept of Inter-cooperation. They define this principle as a specific application of solidarity and a requirement for business efficiency. While it is great to be able to do business with each other, it is even better to support each other by trading concepts, trainings, and skills.

When I was younger (pushing 30) and president of Union Cab. I remember proclaiming that worker co-operatives in the US co-operative world and a blue-collar cab co-op was unique among worker co-ops. The upshot is that there was nothing to learn from the other co-ops. We were alone in the world and had to find our won way. I was young (and arrogant)—and there weren’t a lot of other worker co-ops known to us in the early 90’s. I hear our young leaders say that today and make a mental note to take them aside and have a talk. I also hear people lament our membership dues to NCBA and USFWC and The Co-operative Network wondering what our co-op gets out of our membership.

Well, we (individually and through our co-operatives) help build the movement. We help government officials understand what a co-operative is. We help each other learn how to co-operate better. We help other co-op sectors understand the importance of treating their workers well. We get back what we put into these organizations, but even if all we do is write a check, we help build the movement. This doesn’t have to mean just giving each other discounts. We should share our policy manuals, help each other find new ways of working together. In the US, we need to find a way to pool resources to provide some of the things that our individual co-ops cannot achieve on their own: affordable health care, pensions, retirement plans, etc.

I think that this principle needs to be expanded. Yes, the apex organizations can do a lot. However, we need to create local networks, marketing campaigns and even our own banking system. Even the casual observer of Mondragon recognizes that the Caja Popular had a significant (if not vital) role to play in the rise of Mondragon. The Cooperative Warehouse Society and the Co-operative Bank clearly played the same role in making The Co-operative* the largest consumer co-operative society in the world.

We all need each other to make the co-operative model succeed. I don’t want to limit this to just the co-ops either but to the other legs of the stool as it were. We need the academics who study and propose new concepts in management, who help educate as developers, or teachers, or professors. We need the politicians who help protect the co-operative model.

Co-operation among co-operatives starts with the individual but quickly moves on to the entire world. Our co-operatives need to educate the membership and help them to realize that they, but joining their co-operative, have joined an international movement of 800 million people. We aren’t in this alone, but together. If we can’t see the commonality between our worker co-operatives and the consumer co-ops or large Agriculture co-ops such as Land o’ Lakes, then we aren’t really seeing the co-op movement in its entirety.

When we take the time to understand the dynamics of a water co-operative in rural India, we make our individual co-operatives stronger. When we support the efforts of defending the co-operative movement in Bolivia and Argentina, we make the co-ops in the United States and Canada stronger. This isn’t a zero sum game where we take resources from our co-ops to give to other co-ops. Social capital, like fiscal capital, gains velocity as it travels. Both forms of capital, in the famous quip, are like manure, they only create something worthwhile if they get spread around.

*Normally, I hate it when organizations use a definite article in front of their name. I refuse to call Ohio State University, “The Ohio State University” and not because I’m a Badger through and through. However, if any organization deserves to use the definite article it is The Co-operative.

Next Week: #24 Concern for Community

October 17, 2006

Sometimes It Doesn’t Always Work

Filed under: Management — Tags: , , — John McNamara @ 6:49 pm

During 2006, The US Worker Cooperative movement suffered a couple of losses! Interestingly, both were subjects of a 2003 documentary on US Worker Co-ops called “Beyond the Bottom Line: American Worker Cooperatives” by Headlamp Pictures. It is always disappointing to see co-ops fail, however, such failures are rarities. Paul Hazen of the National Cooperative Business Association noted in his introductory comments to the USFWC that the average capitalist business last about 5 years while the average cooperative business lasts 60 years. Each co-op has its own unique structure and culture. In the worker co-operative world, each co-op tends to operate in a different industry as well. Co-ops, despite their difference in control, must still exist within the industry and cannot get too far away from it. Instead of seeing these two changes as failures, each must be seen in its own situation. Melissa Hoover, staff member of the USFWC detailed the demise of Good Vibrations in the Fall, 2006 issue of NO BOSS . She reports that Good Vibrations released an official statement stating “to stay profitable in an increasingly crowded niche market, the company need to reach more customers.” One need in a competitive field (and for any business) is access to capital. Unfortunately, even pro-cooperative financial institutions were hesitant to risk capital on a sex toys, books and DVDs. As Good Vibrations moves forward to the world of ESOP, they vow to keep many of the values of the cooperative world which they had long ago dubbed “Good Vibration Values.” It appears that a major change in the culture of Good Vibrations was a change in management. It seems clear that the membership came to see little if any connection between cooperative values and those espoused by their company. Management became staffed with people who did not have the same history or knowledge of the cooperative movement. In a co-op with a strong hierarchy, the cooperative process became the scapegoat for slow progress. To be fair, the move to switch corporate structure was met with no opposition. In the end, the workers saw the coop as the problem and voted to end. Burley had a different situation. They ended 28 years of worker ownership. They have lost money the last three years with a 1.5 million dollar loss in 2005. While most famous for the blue and yellow bike trailers, Burley also had a line of recumbent, tandems and road bikes. Despite the mass popularity of the trailers, the bikes were for the higher end of the scale. In the documentary, they argue for keep production in house instead of following every other bike manufacterer by going overseas. They cited the need to keep their jobs in house and the quality that only their personal attention can create. True enough, but the forces of globalization were against them. I can only speculate for the cause of their demise. They never promoted themselves as a cooperative (at least as far as I can tell). They didn’t produce a mass appeal (affordable) road bike or seek the popular mountain bike or hybrid markets. They might have, but my guess is that they did not market their bikes through cooperative bike stores. I have know idea how good their racing bikes were, but I know that I never heard about them during the Tour de France or among the local bikies. It seems to me that to market a racing bike, one needs a racing team to win with them (i.e. Trek). Maybe the cheap labor and materials of the Asian Tigers would have brought them down anyway, but they clearly sought the wrong market. In the end, the economy of their industry caught up with them. 39 of the 97 members lost their jobs. The new owner promises to keep production in Eugene, Oregon, but it will likely mean wage and benefit cuts. On the plus side, after the books are balanced, the former members will divide the roughly $2 million left in retained dividends and property sales. My co-op went through a similar struggle in 2000. Union was a payroll away from failing for several months. A member of Union Cab’s Board, at this low point in the co-op’s history, commented that we can always overcome our external struggles, but it is our ability to handle our internal struggles that is the true risk. When members become disillusioned and quit caring about the cooperative, or when they fail to make the decisions necessary to survive in their industry, they create more peril for their cooperative than either the lack of capital or competition could ever do.

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