What's up with employee-owned companies/co-ops? How does it compare to a strong union?
-
I'm interested in leftist opinions of employee-owned companies. If that's still too broad, could you give some examples of employees buying their employer out? Or are there other ways, like with a union?
Also, what's up with King Arthur's and Bob's Red Mill?
-
A [email protected] shared this topic
-
Scrooge McDuck is an employee of his companies too.
-
The largest arboriculture company here is employee-owned but not unionised at a national level. Their stock isn't publicly traded and each year the permanent employees get to buy shares with a certain percentage of their income. That access to stock options increases with your rank. While they're the only arborists I'd want to work for and set the industry standards for safety, I don't like two things about that:
-
Seasonal employees don't get stock options, nor do new employees without like a year under their belt. This concentrates the internal wealth of the company in upper management and senior employees, making the incentive structure represent them instead of Joe Schmuckatelli risking their life 30m up with a chainsaw.
-
The incentive structure is the same as a public company as a result of that. Make number go up so you get dividends at the end of the year. The only way to make number go up is to do more with less. Productivity is in direct contrast to the welfare of workers because they don't have a union to represent their safety or rights. If I get a small bonus every year from dividends but I spent that year risking my life unnecessarily to boost the stock price, it's just gambling on Russian roulette.
-
-
I've read of a couple small places. Was a coffee shop in the cities around here where they guy running it for 20+ years wanted to get out and the staff decided that rather than a new owner they would raise funds to buy it. Sort of run like a direct democracy with some rules based on seniority and such.
-
I would love to know the answer to that as well. I know Artist & Craftsman Supply is employee owned and the employees are very helpful and seem content. I don't know how it is to work there though:
Come join us! We’re always looking for new talent to join our ever growing team. Artist & Craftsman is a very unique place to work. We’re an employee-owned company, so you can think of it as coming to work each day for yourself.
-
Wall Street brainworms are a pain in the ass to eradicate from companies, even supposedly altruistic ones.
-
A lot of times it takes the form of an ESOP. IMHO, it usually founders trying to cash out from the company. There is still usually a board and CEO, however shares are owned by the employees. The ESOP companies I’ve been involved with did not sell voting shares to employees, which to me was disenfranchising. The benefit was that you had shares and stake in the company, so if the company did well, you did well, however cashing out was tightly controlled.
I suppose they could be great and hope that everyone else has better experiences but to me, I see an employee-owned company and I tend to think it’s a farce.
-
With a Union you still have an adversarial owner who makes company decisions. Coop stuff is voted on by the coop owners, direction of profit is determined by coop mandate.
Eg, we are with a Credit Union for banking, we vote on new policy changes that affect members investments.
For MEC it is coop, we vote who gets to be a board member running the company.
-
It depends on the form of employee ownership as to whether it works out for the employees.
In trucking, the industry uses the owner-operator model as a way to push costs onto employees and skirt labor laws. On paper, the truckers are their own bosses. In reality, they are effectively employees of logistics companies where the logistics companies can pay their employees less than minimum wage and push maintenance costs onto their employees.
In this case, ownership is used as a tool of oppression.
-
In a general sense, the difference between a regular workplace with a union and a worker co-op is that the company is, in part, managed and/or owned by the workers themselves. There's varying degrees of this, but the best co-ops elect their managers. It's my opinion that electing managers is a crucial part of a worker owned economy, but a union is still needed to represent the workers.
-
And you can have a union even in a co-op (would mostly help if the majority / appointed leaders make decisions that break some rules, think enforcing safety rules and such)
-
Wait didn't MEC collapse into / get bought by a regular corporation?
-
Yup, don't be sole owner if you can't afford a lawyer to make sure you get a good deal
-
I thought the same thing.
-
The only good work environment I've had was a municipal parks department. Not even unionised, paid $17/hour for the same work I could get $25-35/hour for at a private landscaper, no benefits for seasonal workers and few super-competitive permanent roles. But in decoupling from the profit motive, production became based on need rather than financial goals. I worked so much harder than I would at a private company because building a public pollinator garden is ecologically critical work that educates people on important things. Clearing snow at 4am in -10c weather was something I did until the point of exhaustion because I use those same bike trails and sidewalks the moment I get off work and each bike is one less car that might kill my neighbours. I got to do eco-Marxism without having to use any of the vocabulary alongside a mixed bag of liberals and radicals who intuitively understood those ideas through observation.
With strong unions and outright syndicalism, that kind of nuance returns to the incentive structure. It's productivity based on socio-ecological need instead of production for profit. We cared about getting people their 40 hours per week and if you came up 5 hours short you'd get paid to study and design sustainable landscapes used by your neighbours. If you needed time off you got it, if you needed a break you took it. You got to spend all days making beautiful de-alienating things for your coworkers, wildlife, and community. When my neighbours hold the power instead of owners and shareholders, it's so much easier to convince them that doing A instead of B will improve our shared conditions.
-
Yeah it’s Mountain Equipment Company now
-
-
Here is a transcript from a panel discussion on this topic held last year at Baltimore's museum of industry.
https://therealnews.com/baltimores-co-ops-show-the-power-of-a-solidarity-economy
They have a few examples represented. One is a coffee shop that the owners closed after the workers started a union, but then the union raised the money to buy it out and the owners agreed.
Another is a hardware store that was owned for decades by a family, and when the owners wanted to retire they converted it into a worker-ownership model because they didn't want to ever see a subsequent owner sell to a private equity group or big corporate chain.
There're some great insights provided. The long and short is that it's a lot of work, but very rewarding for those who have the appetite for it.
-
Workers, who possess intimate knowledge of their tasks and the specific challenges they face, are best positioned to make informed decisions about how to optimize their work processes and achieve their goals. Worker ownership not only enhances efficiency and productivity but also fosters a sense of individual fulfillment and empowerment. In contrast, the top-down, hierarchical structures prevalent in capitalist enterprises often stifle creativity, initiative, and motivation. Workers, alienated from their labor as outlined in Das Kapital, are reduced to mere cogs in the machine, their creative potential and autonomy stifled. Their alienation manifests in several ways. Firstly, workers have little to no say in the decision-making process, breeding a sense of powerlessness and disenfranchisement. Secondly, they are frequently performing repetitive and monotonous tasks, leading to a lack of fulfillment and a sense of detachment from the fruits of their labor. Thirdly, the products of their labor are owned by the capitalist, further reinforcing their estrangement from the process of production.
Embracing a cooperative ownership model empowers workers and leads to better use of their expertise, promoting innovation, adaptability, and resilience. This approach aligns with the principles of delegation and decentralization observed in nature, where local control mechanisms play an indispensable role in the overall health and well-being of the organism. Furthermore, cooperative ownership fosters a more equitable distribution of power and resources, ensuring that the benefits of economic activity are shared more broadly among the community.
These theoretical advantages are also supported by empirical evidence. Research indicates that some cooperatives are not only more productive than traditional companies but also better at preserving jobs during economic downturns. Their resilience stems in part from the increased worker participation in decision-making processes, which allows cooperatives to respond more effectively to market fluctuations and other challenges. By giving workers a stake in the company’s success and a voice in its operations, cooperative ownership models create a more engaged and motivated workforce, leading to improved performance and greater adaptability.
This phenomenon is illustrated in Virginie Pérotin’s study, “The Performance of Workers’ Cooperatives,” that highlights the benefits of cooperative ownership compared to traditional firms. The study emphasizes that the unique features of cooperative enterprises, such as worker participation and shared ownership of capital, are key strengths contributing to their success. Substantial evidence across various contexts demonstrates that these cooperatives are at least as productive, and often more so, than conventional firms. Notably, the study finds a direct correlation between the level of worker participation in a cooperative and its overall productivity.
Pérotin’s research reveals that cooperatives with measures like asset locks and collective capital accumulation tend to be more productive (as seen in French cooperatives) or better at preserving jobs (as in Italian cooperatives) than conventional capitalist enterprises. Much of their success can be attributed to the fact that in a labor-managed firm, members actively participate in decisions that directly affect their employment and income risks. A participatory structure mitigates the potential for managerial moral hazard, leading to more informed and responsible decision-making regarding investment, strategy, and human resources.
Furthermore, worker participation in profit-sharing and decision-making allows for greater flexibility in adjusting pay rather than resorting to layoffs during economic downturns. This adaptability not only benefits the workers but also contributes to the overall stability of the company.
Notably, the benefits extend far beyond the confines of individual companies. When business profits are equitably distributed among the workers, a ripple effect is set in motion that strengthens the entire economy. This occurs because money remains in circulation, flowing back into local communities as workers spend their earnings on goods and services, supporting other businesses and leading to a virtuous cycle of economic activity. Equitable distribution of wealth also ensures that the working majority has sufficient savings and disposable income to weather economic downturns, thus creating a more resilient economy that is less susceptible to boom-and-bust cycles.
It’s important to note that the success of worker cooperatives is not a new phenomenon. While often overlooked in mainstream economic discourse, cooperative models have a rich history and have proven effective in various contexts. The Mondragon Corporation in Spain, for instance, is a federation of worker cooperatives that has thrived for over six decades, demonstrating the long-term viability and resilience of this model.
-
Yeah, I failed to expand on the example. During COVID they faced bankruptcy and the board sold out (without consulting members) I assume there could have been a lawsuit over that but due to bankruptcy a lawsuit would probably not gain anything. Prior to the sellout though we as members got info and choices on voting who ran it, and profit sharing rebates when times were good. In the final years it seemed people voted in CEO types rather than enthusiast outdoor types. Not sure if that led to the collapse, or it was already headed that way.
When it was operating as a coop years back items were affordable and we still had profit, something changed toward covid era though, maybe markets shifted and MEC didn't adapt. They still sell some good stuff but a lot of it now is MEC branded AliExpress stuff. Also don't buy their MEC branded inner tubes they barely last a few rides.
