Worker Cooperatives: An Economic Alternative

by Matthew Krausse, LUTU member

We cherish democracy in our government and hold it in the highest esteem. Democracy in the workplace should be equally cherished. No one likes being told what to do and having no say in it. People have been losing their jobs for years because decision makers saw an opportunity to make more money by moving jobs overseas. Many people want to be their own boss, make their own decisions, and create their own future with their own hands. That is why so many people dream of entrepreneurship in these economic times. The solution to this desire is simple: worker cooperatives.

A worker cooperative is a general term for an enterprise that is cooperatively owned and managed by its workers. This control can take many forms. In a workplace democracy, every worker-owner participates in making decisions about the firm. Alternatively, worker-owners can elect managers, who are considered and treated as workers. According to the International Cooperative Alliance, “co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.” All worker cooperatives embody the Rochdale Principles, first laid out in 1844 by the Rochdale Society of Equitable Pioneers. These principles include voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training, and information, cooperation among cooperatives, and concern for community. These principles are at the heart of cooperatives around the world.

It’s important to understand the system we currently live in. What most people are familiar with is an employer/owner and an employee relationship. Employers or owners typically take out a loan, purchase the necessary tools and information to produce a good or service, and then hire employees who know how to operate or use those resources. Employees then create that good or service, giving everything they produce back to the employer, and are paid less than the value of what they produced. This is the basis of a capitalist system. A capitalist enterprise is characterized by private ownership of the means of production. Decision making is solely up to those who own the business and benefit from maximizing profits.

Richard D. Wolff, a professor of economics at the New School University in New York City, believes that “we ought to have stores, factories, and offices in which all the people who have to live with the results of what happens to that enterprise participate in deciding how it works.” This is the basis of an economy that works for everyone. How can we expect a select few people who are extremely wealthy to make decisions that will benefit everyone? This process of decision making has led to some of the largest inequalities in human history.

Overseas we find some thriving examples of worker cooperatives. The economies of Spain, Italy, Germany, Japan, and many other countries have large cooperative sectors. Spain is home to the most well-known cooperative in the world, the Mondragon Corporation. This umbrella of worker cooperatives employs 74,117 people in 257 companies and organizations. In Italy’s most prosperous region, Emilia Romagna, worker cooperatives make up 40 percent of the region’s gross domestic product (GDP). Finally, Japan has the largest collection of fishery co-ops in the world. Their fisheries are all collectively owned and operated, and while worldwide fish populations are being depleted, Japan has an extremely stable supply. 
 Here in the United States, we have around 300 worker cooperatives with over 7,000 worker-owners, generating over $400 million in annual revenues. Tillamook County Creamery Association (TCCA), a dairy cooperative headquartered in Tillamook County, Oregon, is the 44th largest dairy processor in North America, with their brand selling in all 50 states. This farmer co-op has 110 dairy farms with hundreds of members and supports a vibrant community in the gorgeous Oregon countryside. Wheatsville Food Coop is a full-service, natural foods cooperative grocery store that has been serving the central Austin community since 1976. Wheatsville is the only retail food cooperative in Texas and has over 20,000 invested owners. Invested owners participate democratically and financially in the co-op. Pedernales Electric Cooperative (PEC), in the Texas Hill country, is a utility co-op that delivers electricity to more than 270,000 active accounts throughout 8,100 square miles, an area larger than the state of Massachusetts.

When it comes to cooperatives, knowing really is half the battle. Many people don’t know that there are viable options other than the traditional companies that we’re all familiar with. The first step to moving toward a more democratic economy is talking about it and helping people understand it. According to a study at the University of California, Davis, while 80 percent of Americans surveyed had heard of cooperatives, only one-third could identify one or more characteristics of them. People think that co-ops are just hippie places where you go and buy your granola, but they are so much than that and are a strong alternative to the types of companies that have given us such gross inequalities.

The Austin Co-op Directory (austincooperatives.coop) lists strong local co-ops. Please visit their site and support some of the great cooperatives around town.

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