Workers’ Cooperatives are Cooperative Capitalism
A solution for today’s economic problems with Independent Contractors
Identification of the Problems: (Many problems are in terminology)
Katie Johnston, Boston Globe, “State labor groups split over gig drivers’ rights…. Mixed messages about the best way forward. … Many drivers prefer the current arrangements, Independent Contractors. Giving drivers collective bargaining rights without employee status would set a dangerous precedent.”
My response: Independent Contractors are self-employed businesses that bargain with other businesses. Collectives with economics are like cooperatives. ‘Collective bargaining’ can be done by any who form a group, a partnership, and cooperate to gain power to bargain.
Senator Lydia Edwards, Boston Globe, “We need a comprehensive response to this growing unregulated economy. Drivers’ misclassification is also costing the state money”.
My response: Imbalances between workers and businesses have always created problems in the economy. But over-regulation is a nightmare for small businesses, as we fought for change in the “White House Conference on Small Business” that I was elected to in 1986. Independent Contractors are responsible for their own “income taxes”.
Chrissey Lynch, president of AFL-CO, “Safety net that jobs traditionally provide could further unravel.”
My response: Unions talk about “safety nets” to protect workers, but what or who protects businesses, especially small businesses. Everyone involved needs to see the whole picture”.
Thomas A. Kochan, MIT. “The division leaves every worker-friendly lawmaker unsure of what to do.”
My response: Lawmakers (government) cannot be just for workers. They must be democratically able to understand and work with opposing differences, such as small businesses.
Larry Edelman, Boston Globe, “Inflation squeezes small businesses …reasons: increased expenses for labor, materials, taxes and regulatory costs. … Small businesses, which employ 45% of the Massachusetts workforce, are especially vulnerable … with 80% being single person operations, and another 16% having fewer than 20 employees.”
My response: Thank you, Larry Edelman, for understanding the importance of small businesses.
David C. Adams, New York Times, “Capitalists are now an economic lifeline in Cuba …an explosion of thousands of private businesses… not permitted in communism, which were determined to eliminate capitalist notions such as private enterprise. … Paval Videl, professor in Columbia, ‘The government is bankrupt, so it must invite other actions in’.”
My response: Why is it that others in the world see the need for Capitalism, and small business, and the U.S. is now failing on them, systems we were once known for?
Terminology and Definitions (New Oxford American Dictionary):
Collective: “A group of entities that share, or are motivated by at least one common issue or interest, or work together to achieve a common objective. Collectives make decisions on a consensus-driven and egalitarian basis”.
Worker Cooperative: “A type of horizontal collective wherein a business functions as a partnership of individual professionals, recognizing them as equals and rewarding them for their expertise. They aim to reduce costs, by eliminating the operating costs that are needed to support levels of management. The worker-members’ relation with their cooperative shall be considered as different from that of conventional wage-based labor and to that of autonomous individual work, and in a given worker cooperative enterprise are worker-owners. Worker cooperatives’ flattened management structure and more egalitarian ideology often give workers more options and greater freedom in resolving work-place problems. Direct worker control ensures a formally flat management structure instead of a hierarchical one. This structure is influenced by activist collectives and civic organizations, with all members allowed and expected to play a managerial role.”
Independent Contractor (Wikipedia): “An issue that arises in most companies, especially the ones that are in the gig economy, is the classification of workers. To categorize a worker as an independent contractor rather than an employee, an independent contractor must agree with the client on what the finished work product will be and then the contractor controls the means and manner of achieving the desired outcome. Secondly, an independent contractor offers services to the public at large, not just to one business, and is responsible for disbursing payments from the client, paying unreimbursed expenses, and providing his or her own tools to complete the job.”
My response: From 1960s to 1980s, I owned Shirley Willett, Inc., a fashion clothing design and manufacturing business. Although I had 25 employees, there were times I needed more help, and some stitchers asked for work to do at home, often because they had children. I studied the legality, and set them up as a contract business, and gave them a business name to pay them, especially since they were often a group of two or three. I told them they were not employees, so got no benefits, and they were responsible for income taxes. They were also given rigorous quality control, when bringing in their resulting garment products, as would happen with any contractor. Interestingly, when I sold my business, but not the name, I reincorporated as a “Small Business Consultant” — to help all small fashion businesses.
Capital: “Wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing”. (Wikipedia: “The durable produced goods used for further production.”) … Internal Capital Accounts (ICA’s), also known as Member Buy-Ins, are shares of capital distributed equally and exclusively to workers. Economists have modeled the worker cooperative as a firm in which labor hires capital, rather than capital hiring labor as in a conventional firm.”
My Response: The word “Capitalism” has encountered such hate recently, that the misinterpretation has caused critical problems. A person, business, or organization who “retains earnings” to pay expenses is a capitalist. If retained for their own pockets, it is greed, not capitalism.
I implore journalists and academia to understand and communicate better the value of economic systems of Independent Contractors, Worker Cooperatives, and Cooperative Capitalism.
Thank you for listening. Best wishes to all.
