Put Up the Factory...and Own the Job
May 11, 2013 4:44 PM Subscribe
May 9 was the grand opening of Chicago's New Era Windows Cooperative, a unionized, 100% worker owned and operated window manufacturer with an interesting history. "In 2008, the boss decided to close our windows factory on Goose Island and fire everyone. In 2012, we decided to buy the factory for ourselves and fire the boss. We now own the plant together and run it democratically. This is our story."
I really really hope this refuels the fire that Occupy once held.
I hope there is a happy ending. But in moments like this, well...how's that happen? Publicly shame BoA, and if so how? In which way? I thought it was established some years ago that any body with anymorals sense left would have stopped doing business with BoA. So this shouldn't be a surprise. A BoA customer got ...nothing. I guess what I am saying is-Don't Date Robots!
(IANAL-so I hope there is some legal way that BoA can get their ass handed over.)
posted by QueerAngel28 at 4:57 PM on May 11, 2013 [1 favorite]
I hope there is a happy ending. But in moments like this, well...how's that happen? Publicly shame BoA, and if so how? In which way? I thought it was established some years ago that any body with any
(IANAL-so I hope there is some legal way that BoA can get their ass handed over.)
posted by QueerAngel28 at 4:57 PM on May 11, 2013 [1 favorite]
Worker-owned, worker-managed business are awesome. Glad to see these folks taking their future into their own hands.
posted by Pope Guilty at 5:20 PM on May 11, 2013 [7 favorites]
posted by Pope Guilty at 5:20 PM on May 11, 2013 [7 favorites]
Worker-owned, worker-managed business are awesome.
YES YES BUT ALSO the vengeance part is delightful.
posted by elizardbits at 5:42 PM on May 11, 2013 [9 favorites]
YES YES BUT ALSO the vengeance part is delightful.
posted by elizardbits at 5:42 PM on May 11, 2013 [9 favorites]
YES YES BUT ALSO the vengeance part is delightful.
nomnomnom
posted by thsmchnekllsfascists at 5:53 PM on May 11, 2013 [3 favorites]
nomnomnom
posted by thsmchnekllsfascists at 5:53 PM on May 11, 2013 [3 favorites]
I am so happy to hear this. That was a disgraceful moment and I remember it well. It epitomized the greedy "I got mine and screw the rest" mentality that is so pervasive in American business. Then these same assholes who shutter businesses just to line their wallets more pat themselves on the back describing themselves as the oppressed "job creators".
job creators my ass.
That single event is a perfect example of what is wrong with businesses in the US. (I am sure else where too, but I am in the US).
Good on those people for making a new reality for themselves. They are the true job creators.
posted by lampshade at 6:04 PM on May 11, 2013 [9 favorites]
job creators my ass.
That single event is a perfect example of what is wrong with businesses in the US. (I am sure else where too, but I am in the US).
Good on those people for making a new reality for themselves. They are the true job creators.
posted by lampshade at 6:04 PM on May 11, 2013 [9 favorites]
I'm curious about the durability of worker-owned companies...I love the idea and good on these folks for making it happen. How do you structure the company so you don't end up with a small cadre of elites who are "more equal" than others? Are there good examples of worker-owned companies which have been successfully operating for decades? Again, I love this, but it seems like over time all great things inevitably succumb to the leeches.
I suppose they could take it in turns to act as a sort of executive of the week...
posted by maxwelton at 6:41 PM on May 11, 2013 [1 favorite]
I suppose they could take it in turns to act as a sort of executive of the week...
posted by maxwelton at 6:41 PM on May 11, 2013 [1 favorite]
Reminds me of Zanón in Argentina. Good to see the model catching on elsewhere.
posted by ceribus peribus at 6:43 PM on May 11, 2013 [1 favorite]
posted by ceribus peribus at 6:43 PM on May 11, 2013 [1 favorite]
This book talks about one such company that has been going for a while.
posted by feckless at 7:05 PM on May 11, 2013 [4 favorites]
posted by feckless at 7:05 PM on May 11, 2013 [4 favorites]
Are there good examples of worker-owned companies which have been successfully operating for decades?
They've been doing it in Mondragon since 1956. Democracy Now did a story on it a couple of months ago
posted by any major dude at 7:30 PM on May 11, 2013 [9 favorites]
Are there good examples of worker-owned companies which have been successfully operating for decades?
There was this thing called the Soviet Union, but it didn't end well.
posted by Cool Papa Bell at 7:49 PM on May 11, 2013 [1 favorite]
There was this thing called the Soviet Union, but it didn't end well.
posted by Cool Papa Bell at 7:49 PM on May 11, 2013 [1 favorite]
By the way, every Mom and Pop business, every partnership-driven business ever was essentially "worker owned" in that they owned it and they worked in it. That law firm on the corner? That doctor's office? The plumber? The farmer? Worker-owned. This business will succeed or fail for the same reasons all the others do. It's not terribly ground-breaking. It's just good PR.
posted by Cool Papa Bell at 7:54 PM on May 11, 2013 [3 favorites]
posted by Cool Papa Bell at 7:54 PM on May 11, 2013 [3 favorites]
Are there good examples of worker-owned companies which have been successfully operating for decades?
There was this thing called the Soviet Union, but it didn't end well.
Worker-owned companies are not Communism.
posted by dirigibleman at 7:55 PM on May 11, 2013 [29 favorites]
There was this thing called the Soviet Union, but it didn't end well.
Worker-owned companies are not Communism.
posted by dirigibleman at 7:55 PM on May 11, 2013 [29 favorites]
Are there good examples of worker-owned companies which have been successfully operating for decades?
Yup.
posted by Slap*Happy at 7:56 PM on May 11, 2013 [7 favorites]
Yup.
posted by Slap*Happy at 7:56 PM on May 11, 2013 [7 favorites]
There was this thing called the Soviet Union, but it didn't end well.
If ironic: Try harder.
If serious: Try harder.
posted by Rustic Etruscan at 7:58 PM on May 11, 2013 [37 favorites]
If ironic: Try harder.
If serious: Try harder.
posted by Rustic Etruscan at 7:58 PM on May 11, 2013 [37 favorites]
I wish I was in need of some high-quality windows right now, I know exactly where I'd place that order.
posted by Purposeful Grimace at 8:00 PM on May 11, 2013 [4 favorites]
posted by Purposeful Grimace at 8:00 PM on May 11, 2013 [4 favorites]
The U.S. currently is experiencing a maturation of a handful of worker cooperatives that have really proven the concept and laid the groundwork for domestic organizing efforts like New Era. "Can they last?" is a common question. Here are some of the oldest active ones (there are many older in other countries):
posted by ioesf at 8:02 PM on May 11, 2013 [9 favorites]
- The Cheese Board Collective (1971)
- Inkworks Press (1974)
- Rainbow Grocery (1974)
- Alvarado Street Bakery (1977)
- Union Cab (1979)
- Cooperative Health Care Associates (1985)
- Equal Exchange (1986)
posted by ioesf at 8:02 PM on May 11, 2013 [9 favorites]
Desjardins in Canada was founded in 1900 and it's huge.
I started a small workers cooperative in Costa Rica with a few friends in 2005, and it's going strong. It has provided employment for more than 20 people so far. We have lots of other cooperatives in Latin America, mostly for agricultural production, financial services and manufacturing. They have provided employment, innovation, education and health services to populations that governments forgot.
posted by papalotl at 8:14 PM on May 11, 2013 [5 favorites]
I started a small workers cooperative in Costa Rica with a few friends in 2005, and it's going strong. It has provided employment for more than 20 people so far. We have lots of other cooperatives in Latin America, mostly for agricultural production, financial services and manufacturing. They have provided employment, innovation, education and health services to populations that governments forgot.
posted by papalotl at 8:14 PM on May 11, 2013 [5 favorites]
There was this thing called the Soviet Union, but it didn't end well.
WinCo Foods
Supermarket chain founded in 1967
Currently has 14,000 employees, 100% worker owned
Alliance Holdings
Private equity firm founded in 1995
Currently has 13,000 employees, 100% worker owned
Parsons Engineering
I found this information by searching the internet. If you need more help using the internet, let me know how I can help.
posted by tripping daisy at 8:19 PM on May 11, 2013 [19 favorites]
WinCo Foods
Supermarket chain founded in 1967
Currently has 14,000 employees, 100% worker owned
Alliance Holdings
Private equity firm founded in 1995
Currently has 13,000 employees, 100% worker owned
Parsons Engineering
Parsons Corporation (Parsons) is an engineering, construction, and technical and management services firm headquartered in Pasadena, California. Founded in 1944 by engineer Ralph M. Parsons, Parsons Corporation is currently one of the largest such companies in the United States, with revenues exceeding $3.4 billion in 2008. It is 100% owned by an Employee Stock Ownership Trust. Participation in the trust is limited to current and former employees. In 2002, Parsons spun off its energy subsidiary (Parsons E&C), which was later acquired by Australia-based WorleyParsons Group.11,500 employees, 100% worker owned
I found this information by searching the internet. If you need more help using the internet, let me know how I can help.
posted by tripping daisy at 8:19 PM on May 11, 2013 [19 favorites]
The question isn't "can worker-owned companies last?", it's "can the current model of asshole-owned companies last?"
And the Soviet Union was never "worker-owned". The PR masterpiece of Communism was how it used a thin veneer of Socialism to disguise its true nature as Fascist Totalitarianism With Extra Bureaucracy. Of course, it ended up doing a wonderful job of discrediting Socialism for the benefit of the promoters of Predatory Capitalism.
posted by oneswellfoop at 8:23 PM on May 11, 2013 [21 favorites]
And the Soviet Union was never "worker-owned". The PR masterpiece of Communism was how it used a thin veneer of Socialism to disguise its true nature as Fascist Totalitarianism With Extra Bureaucracy. Of course, it ended up doing a wonderful job of discrediting Socialism for the benefit of the promoters of Predatory Capitalism.
posted by oneswellfoop at 8:23 PM on May 11, 2013 [21 favorites]
This is a really great story and I'm glad it was posted. The workers obviously have a tremendous amount of courage and vision and I wish them luck in business.
There is a second story here from a cooperative movement perspective: the appearance on the on the scene of The Working World, a kind of venture cooperativist organization that capitalizes growth of worker-owned firms. While debt financing is much more orthodox than investment in worker-owned firms, it's scarce. The Working World is innovating the financing of worker cooperatives, and that may open up a path for many more workers to have opportunities like New Era.
posted by ioesf at 8:26 PM on May 11, 2013 [3 favorites]
There is a second story here from a cooperative movement perspective: the appearance on the on the scene of The Working World, a kind of venture cooperativist organization that capitalizes growth of worker-owned firms. While debt financing is much more orthodox than investment in worker-owned firms, it's scarce. The Working World is innovating the financing of worker cooperatives, and that may open up a path for many more workers to have opportunities like New Era.
posted by ioesf at 8:26 PM on May 11, 2013 [3 favorites]
The classic definition of socialism has nothing to do with the form of government or type of market economy. It is quite possible to have democratic, free market socialism and dictatorial, planned economy capitalism. The only deciding factor is who owns the means of production: those who labor to produce the wealth or those who profit from another's labor. Technically, once a company goes beyond 50% worker ownership, it is a socialist enterprise...
posted by jim in austin at 8:38 PM on May 11, 2013 [3 favorites]
posted by jim in austin at 8:38 PM on May 11, 2013 [3 favorites]
Two months ago, the owners of a nearby clothing manufacturing plant closed it due to the end of some federal incentives for keeping production in Canada. The former director of the plant put together a team, purchased the equipment, and less than a month later, restarted production with a decent number of the workers. Stories like this are awesome.
posted by parudox at 8:42 PM on May 11, 2013 [2 favorites]
posted by parudox at 8:42 PM on May 11, 2013 [2 favorites]
The local tv station was bought by employees and is profitable, same as the pulp mill in Nanaimo.
posted by KokuRyu at 10:03 PM on May 11, 2013 [1 favorite]
posted by KokuRyu at 10:03 PM on May 11, 2013 [1 favorite]
I shop regularly at Bi-Mart which is worker owned.
posted by Katjusa Roquette at 10:30 PM on May 11, 2013 [1 favorite]
posted by Katjusa Roquette at 10:30 PM on May 11, 2013 [1 favorite]
Worker Owned Cooperatives, an episode of the BusinessMatters podcast, focusing on Mondragon.
Slap*Happy -- I have my doubts that an ESOP is really the same thing as a co-op. I know a local grocery chain that has an ESOP and you hear tales of cashiers retiring as millionaires, but they fought a huge long battle to remove the food workers' union.
There seem to have been some gains made by the movement overall in recent years, with the
US Federation of Worker Cooperatives and a North American regional member of CICOPA forming in 2011. It's my understanding, though, that there are significant legal barriers to the co-op model in the US, particularly on a state-by-state basis, outside of certain longstanding uses such as ag co-ops. There have also been significant retreats in the areas of mutual insurance and mutual banking, which resemble co-ops, although credit unions have been growing particularly after the financial crisis.
posted by dhartung at 11:29 PM on May 11, 2013
Slap*Happy -- I have my doubts that an ESOP is really the same thing as a co-op. I know a local grocery chain that has an ESOP and you hear tales of cashiers retiring as millionaires, but they fought a huge long battle to remove the food workers' union.
There seem to have been some gains made by the movement overall in recent years, with the
US Federation of Worker Cooperatives and a North American regional member of CICOPA forming in 2011. It's my understanding, though, that there are significant legal barriers to the co-op model in the US, particularly on a state-by-state basis, outside of certain longstanding uses such as ag co-ops. There have also been significant retreats in the areas of mutual insurance and mutual banking, which resemble co-ops, although credit unions have been growing particularly after the financial crisis.
posted by dhartung at 11:29 PM on May 11, 2013
There was this thing called the Soviet Union, but it didn't end well.
That's either disingenuous or... well, let's just go with disingenuous.
Do you like Fat Tire? New Belgium Brewery is 100% employee owned. They have an internal "It's My Company" policy:
If it were your company, what would you do? Look for ways to be less wasteful, be more efficient, recycle and reuse? Yep. It’s infectious. Once you start thinking of ways to make your company better, you can’t stop.
And, like all responsible business owners, it’s important to know your bottom-line, barrels, and books. Meet New Belgium’s practice of open-book management: a policy of fiscal transparency throughout the company that encourages a community of trust and mutual responsibility.
posted by DarlingBri at 11:36 PM on May 11, 2013
That's either disingenuous or... well, let's just go with disingenuous.
Do you like Fat Tire? New Belgium Brewery is 100% employee owned. They have an internal "It's My Company" policy:
If it were your company, what would you do? Look for ways to be less wasteful, be more efficient, recycle and reuse? Yep. It’s infectious. Once you start thinking of ways to make your company better, you can’t stop.
And, like all responsible business owners, it’s important to know your bottom-line, barrels, and books. Meet New Belgium’s practice of open-book management: a policy of fiscal transparency throughout the company that encourages a community of trust and mutual responsibility.
posted by DarlingBri at 11:36 PM on May 11, 2013
We have the Co-operative Group in the UK that's been running since 1844. Their primary business is food retail - they're the 5th largest supermarket chain, and a familiar sight in small towns - but they run a whole bunch of member owned services. They've admittedly been declining since the 50's (when they were responsible for 1/3rd of all food retail in the UK), and the recession has been hard for them, especially the banking arm.
They're still definitely a force to be reckoned with though (along with the building societies) and nearly 170 years of operation is not to be sneezed at.
posted by ArkhanJG at 12:29 AM on May 12, 2013 [4 favorites]
They're still definitely a force to be reckoned with though (along with the building societies) and nearly 170 years of operation is not to be sneezed at.
posted by ArkhanJG at 12:29 AM on May 12, 2013 [4 favorites]
I found this information by searching the internet. If you need more help using the internet, let me know how I can help.
One way I discovered to get an answer to my question via the internet was to earnestly ask it in this thread--and, lo!, I received a shit-ton of great replies--presumably filtered through the lens of people familiar with this subject, helping me avoid dead-ends and misinformation. Heck, others might even enjoy or benefit from the answers provided to my query, and they're right here where folks can see them.
Of course, asking didn't make me feel particularly smug...
My only vaguely-related exposure to this is tech-company stock options, which many friends have received. Some made it big, most made nothing or a modest amount. The key in that arena generally seems to be sure you're employee #8 or whatever; once the company is mature, and especially if the stock price is stagnant, the modest options offered are not much of an incentive to grind through 80 hour weeks.
Part ownership seems a lot better, in that you remove the peccadilloes of stock traders and what seem like arbitrary grants (both when hired and at "bonus time") from the mix. I'm still curious how ownership of EO companies is typically structured, but have some resources now to explore that. Thanks to everyone for the info.
posted by maxwelton at 1:02 AM on May 12, 2013
One way I discovered to get an answer to my question via the internet was to earnestly ask it in this thread--and, lo!, I received a shit-ton of great replies--presumably filtered through the lens of people familiar with this subject, helping me avoid dead-ends and misinformation. Heck, others might even enjoy or benefit from the answers provided to my query, and they're right here where folks can see them.
Of course, asking didn't make me feel particularly smug...
My only vaguely-related exposure to this is tech-company stock options, which many friends have received. Some made it big, most made nothing or a modest amount. The key in that arena generally seems to be sure you're employee #8 or whatever; once the company is mature, and especially if the stock price is stagnant, the modest options offered are not much of an incentive to grind through 80 hour weeks.
Part ownership seems a lot better, in that you remove the peccadilloes of stock traders and what seem like arbitrary grants (both when hired and at "bonus time") from the mix. I'm still curious how ownership of EO companies is typically structured, but have some resources now to explore that. Thanks to everyone for the info.
posted by maxwelton at 1:02 AM on May 12, 2013
From socialist / communist / lefty Europe which sometimes tries not to do capitalism in quite such a bloodthirsty manner as the USA . Gifted to its employees in 1929 The John Lewis Parnership is Britains 3rd largest privately owned company and is owned by a trust on behalf of all its employees; all 87,000 of them. This year the retail trade staff will all receive a bonus worth 17% of salary.
posted by adamvasco at 1:39 AM on May 12, 2013 [4 favorites]
posted by adamvasco at 1:39 AM on May 12, 2013 [4 favorites]
Behind all of this socialist worker ownership lies a for profit capitalist bank which really owns title.
posted by three blind mice at 1:49 AM on May 12, 2013 [2 favorites]
posted by three blind mice at 1:49 AM on May 12, 2013 [2 favorites]
With regards employment structure - much like any other business. You still have shop-floor workers, management etc. People are paid according to responsibility. Usually senior management is run along democratic lines, where you have representatives of the workers on the board, and Annual General Meetings or the like where decisions are examined and executive management scrutinised. The most senior posts will have applicants, and elections are usually held to choose who gets it (assuming there's more than one applicant!)
The key difference is how the company is owned. Instead of a cadre of external capital owning shareholders extracting wealth from the company, and using shareholder meetings to tell management how to run the place (and having management completely supine to 'shareholder value') the profits of the company that aren't reinvested in the business are disbursed to the members. These are mostly but not exclusively employees (can also extend to ex-employees as part of a pension, for example) as a dividend. How much each member gets will depend on how that co-op is structured - usually related to amount of work done as part of the co-operative, can also account for length of service. You often end up with a points system; you acquire points as you work for the co-op, and each point is worth a fixed amount of the total dividend.
Unlike a conventional limited company, large amounts of points are not usually allocated to senior management as a matter of course; salary is their primary income, not share options. For the lower income workers, the dividend can make up quite a significant part of their income, especially for longer serving employees.
The simple advantage of this model is that by allocating profits to the workers, instead of a separate rentier capital owning class, you give a direct incentive to people to work more efficiently and cut un-necessary waste, as it directly affects their own income. Equally, you reduce the likelyhood of senior management focusing solely on short term stock performance on the markets, and for example, bulk firing people to massage the numbers for a quarter - they're directly accountable to the members, which acts as a backstop.
The co-op model isn't perfect, of course. Growing the business can be harder without ready access to stock issuing, you have to take more expensive commercial loans from the banking sector. Just being a co-operative society doesn't make you immune to politics, selfish managers or incompetence. Where everyone owns it, it can feel like nobody is really in charge, and lead to a diffused sense of responsibility and a sort of zombie lurching from crisis to crisis - or less worse, just a fairly static business comfortable in its niche, with no particular desire to grow or change. This is mainly why co-ops tend to remain on the small-to-medium size, and not grow to the mega-huge politically active size, compared to their hungry, stock price driven privately owned bretheren.
Overall though, the co-op model has a lot to recommend it, and there are many, many successful businesses that use it and the profits they make go to the people that made them happen, rather than a bunch of stockholders who did very little to actually improve the business except make the founders wealthy. I think society would be better off - the wealth gap would be a much smaller problem, for example - if the majority of companies were employee owned and democratically managed instead of run by very expensive CEOs working primarily for vulture shareholders (and themselves).
On preview - I completely forgot John Lewis! Excellent example. They also run Waitrose, on the same lines. My two nearest supermarkets are a Co-op and a Waitrose...
posted by ArkhanJG at 1:50 AM on May 12, 2013 [11 favorites]
The key difference is how the company is owned. Instead of a cadre of external capital owning shareholders extracting wealth from the company, and using shareholder meetings to tell management how to run the place (and having management completely supine to 'shareholder value') the profits of the company that aren't reinvested in the business are disbursed to the members. These are mostly but not exclusively employees (can also extend to ex-employees as part of a pension, for example) as a dividend. How much each member gets will depend on how that co-op is structured - usually related to amount of work done as part of the co-operative, can also account for length of service. You often end up with a points system; you acquire points as you work for the co-op, and each point is worth a fixed amount of the total dividend.
Unlike a conventional limited company, large amounts of points are not usually allocated to senior management as a matter of course; salary is their primary income, not share options. For the lower income workers, the dividend can make up quite a significant part of their income, especially for longer serving employees.
The simple advantage of this model is that by allocating profits to the workers, instead of a separate rentier capital owning class, you give a direct incentive to people to work more efficiently and cut un-necessary waste, as it directly affects their own income. Equally, you reduce the likelyhood of senior management focusing solely on short term stock performance on the markets, and for example, bulk firing people to massage the numbers for a quarter - they're directly accountable to the members, which acts as a backstop.
The co-op model isn't perfect, of course. Growing the business can be harder without ready access to stock issuing, you have to take more expensive commercial loans from the banking sector. Just being a co-operative society doesn't make you immune to politics, selfish managers or incompetence. Where everyone owns it, it can feel like nobody is really in charge, and lead to a diffused sense of responsibility and a sort of zombie lurching from crisis to crisis - or less worse, just a fairly static business comfortable in its niche, with no particular desire to grow or change. This is mainly why co-ops tend to remain on the small-to-medium size, and not grow to the mega-huge politically active size, compared to their hungry, stock price driven privately owned bretheren.
Overall though, the co-op model has a lot to recommend it, and there are many, many successful businesses that use it and the profits they make go to the people that made them happen, rather than a bunch of stockholders who did very little to actually improve the business except make the founders wealthy. I think society would be better off - the wealth gap would be a much smaller problem, for example - if the majority of companies were employee owned and democratically managed instead of run by very expensive CEOs working primarily for vulture shareholders (and themselves).
On preview - I completely forgot John Lewis! Excellent example. They also run Waitrose, on the same lines. My two nearest supermarkets are a Co-op and a Waitrose...
posted by ArkhanJG at 1:50 AM on May 12, 2013 [11 favorites]
This is mainly why co-ops tend to remain on the small-to-medium size, and not grow to the mega-huge politically active size, compared to their hungry, stock price driven privately owned bretheren.
This is definitely a nice feature of worker-owned co-ops, yes.
posted by eviemath at 2:41 AM on May 12, 2013 [3 favorites]
This is definitely a nice feature of worker-owned co-ops, yes.
posted by eviemath at 2:41 AM on May 12, 2013 [3 favorites]
Price Chopper, which has 24,000 employees and is a familiar sight to anyone from or near Upstate New York, is 55% employee owned, with the other 45% owned by the Golub family.
posted by Sticherbeast at 5:23 AM on May 12, 2013
posted by Sticherbeast at 5:23 AM on May 12, 2013
Some surprisingly large — even market-dominating — companies are cooperative. Ocean Spray, for example.
posted by Glomar response at 6:47 AM on May 12, 2013 [3 favorites]
posted by Glomar response at 6:47 AM on May 12, 2013 [3 favorites]
I notice that supermarkets are a major component of the list of the largest employee owned companies that tripping daisy provided. I wonder if supermarkets aren't an ideal place for employee ownership. Margins are thin, so it's not a huge engine of profit that lends itself to skimming off of. It's relatively labor intensive, so there are lots of employees. Waste is inherent in the business, so you need everybody to be motivated to limit it. And most of the employees are either directly or by very short paths, doing public facing work.
For what it's worth, I was rather fond of HyVee when I lived in a town with one. Retail businesses are always more pleasant to shop at when the workers don't feel like they're being exploited.
posted by wotsac at 8:07 AM on May 12, 2013
For what it's worth, I was rather fond of HyVee when I lived in a town with one. Retail businesses are always more pleasant to shop at when the workers don't feel like they're being exploited.
posted by wotsac at 8:07 AM on May 12, 2013
United Airlines was employee owned from 1994 through 2002, when it and the other legacy carriers went bankrupt and were reorganized by the federal government.
posted by miyabo at 8:09 AM on May 12, 2013
posted by miyabo at 8:09 AM on May 12, 2013
By the way, every Mom and Pop business, every partnership-driven business ever was essentially "worker owned" in that they owned it and they worked in it. That law firm on the corner? That doctor's office? The plumber? The farmer? Worker-owned
Well, unless they have employees who don't enjoy profit-sharing or partial ownership of the business.
posted by Bunny Ultramod at 9:06 AM on May 12, 2013
Well, unless they have employees who don't enjoy profit-sharing or partial ownership of the business.
posted by Bunny Ultramod at 9:06 AM on May 12, 2013
I'm curious about the durability of worker-owned companies.
In Canada there are two studies that show co-operatives have a higher survival rate than conventional businesses. Here is one from 2011 about BC
Murray, Carol. Co-op Survival Rates in British Columbia. BALTA (The BC-Alberta Social Economy Research Alliance), June 2011 [PDF]
Behind all of this socialist worker ownership lies a for profit capitalist bank which really owns title.
Unless, of course, like most co-operatives, they bank with a credit union, a member owned financial institutition.
There was this thing called the Soviet Union, but it didn't end well.
Co-operatives are not state run monopolies, so this is a red herring. One of the core co-operative principles is voluntary membership, and another is independence. Co-operatives do not tend to thrive under state ownership, while they do benefit from certain types of legislation.
This is a great talk about the amazing worldwide scope of co-operatives by Peter Couchman of the Plunkett Foundation (given at Co-operative City Conference in Vancouver 2012).
posted by chapps at 10:03 AM on May 12, 2013 [1 favorite]
In Canada there are two studies that show co-operatives have a higher survival rate than conventional businesses. Here is one from 2011 about BC
Murray, Carol. Co-op Survival Rates in British Columbia. BALTA (The BC-Alberta Social Economy Research Alliance), June 2011 [PDF]
Behind all of this socialist worker ownership lies a for profit capitalist bank which really owns title.
Unless, of course, like most co-operatives, they bank with a credit union, a member owned financial institutition.
There was this thing called the Soviet Union, but it didn't end well.
Co-operatives are not state run monopolies, so this is a red herring. One of the core co-operative principles is voluntary membership, and another is independence. Co-operatives do not tend to thrive under state ownership, while they do benefit from certain types of legislation.
This is a great talk about the amazing worldwide scope of co-operatives by Peter Couchman of the Plunkett Foundation (given at Co-operative City Conference in Vancouver 2012).
posted by chapps at 10:03 AM on May 12, 2013 [1 favorite]
Behind all of this socialist worker ownership lies a for profit capitalist bank which really owns title.
Crain's Chicago Business: Republic Windows comes back as worker-owned venture
posted by Golden Eternity at 10:56 AM on May 12, 2013 [2 favorites]
Crain's Chicago Business: Republic Windows comes back as worker-owned venture
The business, rechristened New Era Windows Cooperative, was purchased for about $450,000 in August and now has five customersIt seems unlikely that "Working World" could be described as a capitalist bank in this case, but who knows. In any event, the co-op is much smaller than the original "capitalist" version. Most new businesses need to raise capital or find financing somehow, and it is hard to see how this isn't a problem for a worker owned model. I'm guessing most new businesses fail, and investors would want an exit plan that allows them to cut their losses and sell or shut down the company.
[...]
New Era, now on the Southwest Side, has just 18 worker-owners, compared with 300 employees who worked at Republic nearly five years ago.
[...]
All but one of the 18 owners was involved in the Republic Windows occupation, the spokeswoman said. They paid $1,000 each to purchase an ownership stake. Another 20 workers are on a waiting list to buy in after the company begins operations.
[...]
New Era will likely employ 40 to 80 people in the future, Mr. Martin said. Republic Windows' higher staffing levels were driven by the housing boom.
[...]
The purchase was financed by the Working World, a nonprofit based in Buenos Aires, Argentina, and New York that assists worker-controlled companies.
Executive Director Brendan Martin said that of the 150 companies the nonprofit has financed, roughly 90 percent are profitable.
posted by Golden Eternity at 10:56 AM on May 12, 2013 [2 favorites]
There are some similarities to this and how an ESOP is run, namely in that profit and increased value of the corporation directly benefits employee owners. Traditionally members of an ESOP fare much better in retirement than their peers in non-ESOP companies. By that measure "it works".
It differs from communal ownership in that the "boss structure" still remains in an ESOP. Some ESOP trusts are set up to have line worker representation but in many cases the Trust and the Board of Directors has a lot of overlap. The DOL and ERISA regulations keep the corporation from doing anything egregious but Plans do get terminated by the corporation and the decision would happen by the few decision makers.
A short version comparison would be that an ESOP is a tax favored way to share profits among employees while worker owned companies do a better job of establishing workplace democracy.
I work in the ESOP industry. No intent to derail the thread here, but I wanted to clarify a few things.
posted by dgran at 7:54 AM on May 13, 2013
It differs from communal ownership in that the "boss structure" still remains in an ESOP. Some ESOP trusts are set up to have line worker representation but in many cases the Trust and the Board of Directors has a lot of overlap. The DOL and ERISA regulations keep the corporation from doing anything egregious but Plans do get terminated by the corporation and the decision would happen by the few decision makers.
A short version comparison would be that an ESOP is a tax favored way to share profits among employees while worker owned companies do a better job of establishing workplace democracy.
I work in the ESOP industry. No intent to derail the thread here, but I wanted to clarify a few things.
posted by dgran at 7:54 AM on May 13, 2013
One way I discovered to get an answer to my question via the internet was to earnestly ask it in this thread--and, lo!, I received a shit-ton of great replies
Agreed, maxwelton - we are, after all, producing the internet. In fact, when I couldn't point to a good resource to answer a question in a previous thread, I went out and built one and brought it back to mefi projects: American Worker Cooperative and its library of academic articles on worker cooperatives (previously). So keep asking!
One of the unanswered questions you raised was about how a participatory democracy can avoid decaying into an oligarchy of elites. This is a question for all democracies, not just democratic businesses, of course. A term often used is to describe a shrinking subset of owners eventually transitioning the business to a non-democratic form is "demutualization." Stemming demutualization seems to need to be prevented in the organizational structure, ie the bylaws. However there are also cultural and business factors. A few examples help illustrate.
Sunset Scavenger was a worker cooperative that held the monopoly contract for San Francisco's garbage collection for 70 years. Having owners driving their own routes was considered a business advantage because those same drivers did direct, door-to-door bill collection and built relationships with customers. When the company began to bill by mail in the 1970s they also began to close the door on new employees joining as owners, and eventually the company demutualized. From a structural perspective, this transition was aided by the fact that a) the bylaws did not require that the cooperative offer ownership to all employees, and b) the bylaws allowed for owners to retire, but still hold on to membership, essentially becoming absentee owners.
From the 1930s through the 1990s(?) There were 30 plywood manufacturing cooperatives in the Pacific Northwest that had as much as 25% of the national market. Among their myriad stories was the problem of having created "too much" value. Workers from several of these firms surrendered their shares in corporate acquisition. Their forest holdings, in particular, were rising in value. The structural issue here is the the degree to which members' equity can increase. Some worker cooperatives' shares are designed not to increase with market value (like limited equity housing does not), so the workers have less incentive to sell out.
Some more recent demutualizations were those of the former cooperatives Burley Design and Good Vibrations. In both instances navigating growth seemed to spur the decision. Burley grew successfully as a democratic firm, but sold out when sales contracted. Good Vibrations demutualized because the managers convinced the shop floor that the business couldn't expand nationally and maintain democratic organization.
These are negative examples, I know, but they illuminate some of the issues that need to be addressed as cooperatives mature. For a positive example (disclosure: I'm a former co-owner), the Arizmendi Association spins off small, decentralized stores that establish strong customer relationships, requires all employees be offered membership after 6 months, limits the value of equity, and has mandatory leadership and participation workshops for all new workers.
posted by ioesf at 10:01 AM on May 13, 2013 [6 favorites]
Agreed, maxwelton - we are, after all, producing the internet. In fact, when I couldn't point to a good resource to answer a question in a previous thread, I went out and built one and brought it back to mefi projects: American Worker Cooperative and its library of academic articles on worker cooperatives (previously). So keep asking!
One of the unanswered questions you raised was about how a participatory democracy can avoid decaying into an oligarchy of elites. This is a question for all democracies, not just democratic businesses, of course. A term often used is to describe a shrinking subset of owners eventually transitioning the business to a non-democratic form is "demutualization." Stemming demutualization seems to need to be prevented in the organizational structure, ie the bylaws. However there are also cultural and business factors. A few examples help illustrate.
Sunset Scavenger was a worker cooperative that held the monopoly contract for San Francisco's garbage collection for 70 years. Having owners driving their own routes was considered a business advantage because those same drivers did direct, door-to-door bill collection and built relationships with customers. When the company began to bill by mail in the 1970s they also began to close the door on new employees joining as owners, and eventually the company demutualized. From a structural perspective, this transition was aided by the fact that a) the bylaws did not require that the cooperative offer ownership to all employees, and b) the bylaws allowed for owners to retire, but still hold on to membership, essentially becoming absentee owners.
From the 1930s through the 1990s(?) There were 30 plywood manufacturing cooperatives in the Pacific Northwest that had as much as 25% of the national market. Among their myriad stories was the problem of having created "too much" value. Workers from several of these firms surrendered their shares in corporate acquisition. Their forest holdings, in particular, were rising in value. The structural issue here is the the degree to which members' equity can increase. Some worker cooperatives' shares are designed not to increase with market value (like limited equity housing does not), so the workers have less incentive to sell out.
Some more recent demutualizations were those of the former cooperatives Burley Design and Good Vibrations. In both instances navigating growth seemed to spur the decision. Burley grew successfully as a democratic firm, but sold out when sales contracted. Good Vibrations demutualized because the managers convinced the shop floor that the business couldn't expand nationally and maintain democratic organization.
These are negative examples, I know, but they illuminate some of the issues that need to be addressed as cooperatives mature. For a positive example (disclosure: I'm a former co-owner), the Arizmendi Association spins off small, decentralized stores that establish strong customer relationships, requires all employees be offered membership after 6 months, limits the value of equity, and has mandatory leadership and participation workshops for all new workers.
posted by ioesf at 10:01 AM on May 13, 2013 [6 favorites]
Cross posting from here on adamvasco's suggestion (why I didn't think of it when I first read this thread, I don't know...)
In one region of Italy they've been doing the co-op thing since the 1860's, and it's not gone too badly for them:
also:
Finally: a talk by John Restakis, Executive Director of the British Columbia Cooperative Association, on the Emilia Romagna model
posted by titus-g at 3:46 AM on May 22, 2013 [2 favorites]
In one region of Italy they've been doing the co-op thing since the 1860's, and it's not gone too badly for them:
"The Emilia Romagna region is home to a population of 3.9 million people (seven percent of the national population). Italy is divided into 103 provinces which make up 20 regions. The regional capital of Bologna is both a city and a province and has a population of 380,000.
By 2003 the dreams of cooperators had created an impressive reality. There are thousands of cooperatives of all types in Emilia Romagna.
Cooperatives make up over 40% of the GDP of the ER region
In Bologna two out of three citizens are members of a cooperative
In Bologna over 85% of the city's social services are provided by social co-ops
Per capita income in ER has risen from 17th to second among Italy's 20 regions
Per capital income is 50% higher than the national average
Of the European regions, ER is number 11 of 122 regions in terms of GNP per inhabitant
Bologna has the highest disposable income of any of Italy's 103 provinces
Bologna has the highest per capita expenditure on the arts of any city in Italy
The unemployment rate of 4% is virtually full employment
70% of Bologna's households have home ownership"
also:
"Perhaps the most interesting aspect in relation to the UK today is the use of co-ops in social care. In Italy there are now over 3,000 social care co-operatives, employing nearly 60,000 people, many of whom are handicapped or were formerly marginalised from mainstream society. In Emilia most of these are workers co-ops. They range in size from 10 or 12 members to over 500 in the case of CADIAI, which provides a range of health services and elderly care.and
First organised in the early 1970s, social care co-ops were formed by care-givers and families to provide services to the disabled that were not available from the state. Today, their turnover is over 1.3 billion euros, amounting to 13 per cent of Italian expenditure for social services. In Bologna, over 85 per cent of the city's social services are provided through social care co-ops.
In a recent study of elderly care in Emilia Romagna, it was shown that social co-ops provided a superior service at 50 per cent of the cost of state programmes. This can be traced to a number of factors, including more flexible working conditions, lower labour costs and greater commitment among workers resulting. "
"Small businesses in Emilia-Romagna are also structurally different from the typical small business in the United States. They're not simple suppliers of components to a big companies that lay down the law. In Emilia-Romagna, small firms compete for contracts. But, as a matter of custom and practicality, the winners hire the losers as subcontractors. And there is none of our famous industrial dualism, where workers in small firms must put up with low wages and slim benefits. In exchange for Italy's highest benefits and wages, workers are flexible: They move easily among firms. Similarly, skills and marketing information travel easily among local suppliers.
In U.S. cities, urban planners have tried to make industrial workers and manufacturing go away as fast as possible so they can be replaced by upscale professionals and office buildings. Not surprisingly, the number of our manufacturing jobs has shrunk. In Emilia-Romagna, where there is no higher economic priority than keeping manufacturing, industrial jobs have grown. In the past twenty years, the region's overall economy has grown faster than that of any state in the United States; 17 percent of its income is from manufacturing. That's more than half again as high as the U.S. share.
Emilia-Romagna's small manufacturing companies don't require tariff protection to survive. Roughly half of the regional agricultural and industrial output is exported, chiefly in the form of machinery -- $14 billion worth. But innovative agricultural products also swell the export total. Worldwide, the region's best-known brand name may be Parmalatta -- milk from Parma that doesn't need to be refrigerated and has a shelf life of around six months. Sales are $1.7 billion worldwide."
Finally: a talk by John Restakis, Executive Director of the British Columbia Cooperative Association, on the Emilia Romagna model
posted by titus-g at 3:46 AM on May 22, 2013 [2 favorites]
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And I might add, having worked at a company going through bankruptcy, the law regarding who gets paid first really needs to change. Companies have the money to fight for their share, individuals don't. And I've watched how money can magically disappear as bonuses and severance packages before the filing, ensuring no possibility of workers seeing any payout.
posted by [insert clever name here] at 4:56 PM on May 11, 2013 [5 favorites]