Intro to Worker Cooperatives
What’s a worker cooperative ?
A worker cooperative is a kind of business model. In Québec and many places around the world it’s also a specific legal entity. Worker cooperatives can be for-profit or not-for-profit — the important aspect is that they are democratically run by their workers. This means that leadership is elected and that the business itself is owned by the people who work there. Each worker-owner (or member) has a single vote. A worker cooperative puts the needs of its workers first and its main purpose is to provide jobs to its members.
Worker ownership means that unlike other business models, there are no shareholders or external capitalists who own the company and passively earn profits from exploiting its activity. Workers have full ownership of what they produce — and the value they create after selling it remains theirs and theirs alone.
Worker cooperatives are managed by a set of core rules — its bylaws — that outline everything necessary to run the coop. Bylaws are written by the workers and might define, amongst other things, how surplus revenue is managed, how the board of directors is elected, and a code of conduct. These rules can be modified by voting during General Assemblies when a quorum is met.
What a worker cooperative is not
There are many misconceptions out there about what a worker cooperative is (sometimes repeated by business owners who enjoy their position above workers), and it’s important to keep in mind that the core principle of a worker coop is that the business is owned by the workers.
A worker cooperative is not a business where everyone is paid the same rate. Members can decide to run their worker cooperative in this way, or they can decide to offer different salaries for positions that are more or less difficult to fill or for people who have more or fewer special needs or dependents.
A worker cooperative is not defined by its management structure. Worker cooperatives can have a complex hierarchy of roles and titles with positions of authority, or they can be run more informally and “horizontally.” The important thing about management positions in a worker cooperative is that they are ultimately accountable to the workers, who are the ones who vote on how the company is run, as opposed to answering only to a special class of business owners separate from the workers as a whole.
One thing to watch out for is that “cooperatives” can come in many other forms — it’s important to remember that other cooperative models are not essentially pro-worker in the way that worker cooperatives are. MEC (in Canada) and REI (in the US) are examples of consumer cooperatives. In these co-ops, workers are regular employees while the consumers are owners and decide the direction of the business (source). In fact, when MEC workers in B.C. were unionizing in 2019, they were subjected to a harsh union-busting campaign by management. Perhaps even more pernicious is the “producer cooperative,” an organization where the voting members are all businesses. Assuming these businesses are not themselves all worker cooperatives (an arrangement more commonly known as a cooperative federation), these “members” are effectively the business owners — that is, the ones who hire employees and profit from their work. In many cases, that means producer cooperatives occupy a position closer to cartels and act in direct opposition to the interests of their members’ workers. “La Guilde du jeu vidéo du Québec” is an example of such a producer cooperative: some of its members include Ubisoft, Square Enix, WB games, Eidos, and Bethesda.
Why are worker cooperatives better for workers than other businesses ?
Because leaders (the board of directors) are elected by the workers, the business isn’t gridlocked by its bosses’ whims and egos. Founders of a worker coop can be removed from leadership if they are found unfit to be there. In contrast, other businesses’ toxic bosses have no legal obligations to make space for better leaders and this can hurt workers (and the business!) in many ways. Worker cooperatives prioritize leadership based on the skills and experience to run a business, instead of on who invested the most capital.
Perhaps most importantly, management in a worker cooperative represents the workers and its job is to serve them, not to serve a class of owners who are separate from the workers as in capitalist business models.
Worker cooperatives have the freedom to structure their business as they like. If the members work better with a more organized hierarchy it’s absolutely possible to have a full blown vertical structure as you see in most traditional game studios (directors, producers, etc.). This also means that they have the freedom to have a more horizontal hierarchy or to change directors on project basis, etc.
Since workers are also owners, it creates a completely different work dynamic: workers are working for each other and for themselves, not for separate business owners who act as their bosses. Critically, worker-owners have the freedom to decide what to do with money surplus from sales. A percentage of it can be divided among workers and paid out as dividends; part of it can also be saved up in a retirement fund to be paid out to workers when they leave the coop. Usually there will be some part that stays under the control of the firm as operating funds — but those funds are still owned by the owners of the company, who are the workers! The important point here is that members are the direct beneficiaries of the entire value they create.
In contrast, in businesses that are not worker coops, the workers don’t own the company or what they produce. Any profits created by the workers goes directly to the owners, who decide how to spend it. The more money they pay to workers in the form of wages, salaries, or benefits, the less profits the owners make. This creates a conflict of interest between owners and workers. Worker co-ops resolve this by making workers equal owners of the company.
Worker cooperatives follow their bylaws and policies, but these can be democratically altered. In other businesses, the way the business works is dictated directly by the higher-ups: workers that don’t fit certain models or “cultures” are most often simply fired. Since a worker cooperative is built for its workers and by its workers, it has the power to make decisions that accommodate individual and collective needs. This means worker co-ops can help leave the door open for those who are often pushed out of the game industry — including parents, people with disabilities, and anyone over 34.
Worker cooperatives can’t be acquired
That’s right, you read that right. In Québec, worker cooperatives cannot be sold to another entity: they either exist in perpetuity under the ownership of its workers, or they dissolve (Traditionally giving what’s left of their bank accounts to other coops).
Fortunately, studies show that worker cooperatives tend to remain in business longer than capitalist businesses: a 2008 study in Québec demonstrated that the survival rate of cooperatives was 62% after 5 years, and 44% after 10 years, compared to 35% after 5 years and 20% after 10 years for other forms of Québec business enterprises.
Of course, worker cooperatives can still sell what they produce: intellectual properties, software, etc. This mechanism ensures that the firm remains a worker cooperative owned by the people who work for it, and that ownership of the cooperative can’t be passed around like ownership of a capitalist startup can be. Ownership changes often result in massive restructuring that then leads to job losses — not to mention that it’s always only the owners who get to cash in on these business acquisitions, never the employees!
If you want more examples of how some existing video game coops are lead and affect change, this article relates the experience of workers from cooperatives that were described during a panel from the Game Dev of Color Expo on how worker cooperatives operate.
How do I get started?
If you are working for a studio that is owned by someone who claims to value a more just and less exploitative approach to making video games, maybe they could benefit from learning about worker coops? Or if you are such an entrepreneur yourself or are thinking of starting a new studio and you want to ensure it will be based on mutual respect and trust rather than exploitation of workers: the answer is a worker coop!
In recent years, Québec has seen quite a few worker cooperatives crop up in the videogame industry, and many more are coming! Some of the workers who work at these studios are members of GWU Montréal, and we would be very happy to help you start your own worker cooperative or transform your business into one!