Information about Worker Cooperative

A worker cooperative is a cooperative owned and democratically controlled by its employees. There are no outside or consumer owners in a worker cooperative -- only the workers own shares of the business. Only one membership share may be issued to a member. One membership share is the equivalent of one vote. Membership is not compulsory for employees, but only employees can become members.^[1][2] But in India there is a most progressive application of worker cooperative which insists compulsory membership for all employees and compulsory employment for all members. That is the form of the famous Indian Coffe House movement. This system is the brain child of the legendary communist leader of India A. K. Gopalan.

History of worker cooperatives

Historically, worker cooperatives rose to prominence during the industrial revolution as part of the labour movement. As employment moved to industrial areas and job sectors declined, workers began organizing and controlling businesses for themselves. Most early worker co-ops did not adhere to clear cooperative structures or ideologies. Starting in the 1830s, worker cooperatives were formed by hat makers, bakers, and garment workers.

In the United States there is no coherent legislation regarding worker cooperatives nationally, much less Federal laws, so most worker cooperatives make use of traditional consumer cooperative law and try to fine-tune it for their purposes. In some cases the members (workers) of the cooperative in fact "own" the enterprise by buying a share that represents a fraction of the market value of the cooperative.

When the current cooperative movement resurfaced in the 1960s it developed mostly on a new system of "collective ownership" where par value shares were issued as symbolic of egalitarian voting rights. Once brought in as a member, after a period of time on probation usually so the new candidate can be evaluated, he or she was given power to manage the coop, without "ownership" in the traditional sense. In the UK this system is known as common ownership.

Some of these early cooperatives still exist and most new worker cooperatives follow their lead and develop a relationship to capital that is more radical than the previous system of equity share ownership.

In Britain this type of cooperative was traditionally known as a producer cooperative, and, while it was overshadowed by the consumer and agricultural types, made up a small section of its own within the national apex body, the Cooperative Union. The 'new wave' of worker cooperatives that took off in Britain in the mid-1970s created the Industrial Common Ownership Movement (ICOM) as a separate federation. Buoyed up by the alternative and ecological movements and by the political drive to create jobs, the sector peaked at around 2,000 enterprises. However the growth rate slowed, the sector contracted, and in 2001 ICOM merged with the Co-operative Union (which was the federal body for consumer cooperatives) to create Co-operatives UK, thus reunifying the cooperative sector.

Trade Unions

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Unions are often unnecessary in worker cooperatives as the workers have direct control over the management and ownership of the business - they are negotiating with themselves. Some worker cooperatives still choose to become members of local unions to demonstrate their support for the labor movement and to working conditions that have resulted from years of struggle. While an unusual situation, there is no contradiction in doing so. Worker cooperatives that join unions often benefit from the trade that comes their way from the community of union members and those who support unions for political reasons. The labor contract negotiated becomes the baseline of benefits due to the membership and guarantees to the community that the working conditions are not unfavorable. Union membership also guarantees that the worker cooperative will not operate on the basis of typical small business sacrifice, where owner(s) sometimes work overtime to keep their business afloat and expect similar sacrifices of their workers. Union membership for worker cooperatives gives the enterprise a legitimate standard of operations.^[3]

Firms converting to worker ownership may benefit from union membership because a union provides an experienced structure for integrating the needs of business with democratic influence from workers on management decisions.

Internal Structure

Worker cooperatives may have a wide variety of internal structures. Many co-ops use a hierarchical structure similar to that of a conventional business, with a board of directors and various grades of manager, with the difference that the board of directors is elected. Some co-ops, however, use a structure based on activist collectives and civic organizations, with all members allowed and expected to play a managerial role - and sometimes using consensus decision-making. Such unconventional structures may be associated with more radical political aims such as anarchism and parecon.^[4][5]

Worker cooperatives in Europe

Worker co-operation is well established in most countries in Europe, with the largest movements being in Italy, Spain and France.

One of the world's best known example of worker cooperation is the Mondragón Cooperative Corporation in the Basque Country.^[6]

In the United Kingdom, the Labour Party's enthusiasm for worker cooperatives was at its highest in the 1970s and 1980s, with Tony Benn being a prominent advocate. A number of such co-operatives were formed during the 1974 Labour Government. However, this usually took place following the bankruptcy of a private firm in a desperate attempt to save the jobs at risk, and the change in ownership structure was usually unable to resist the underlying commercial failure. This was true in particular of the best known, the Meriden motor-cycle cooperative in the West Midlands which took over the assets of the ailing Triumph company, although there were instances of successful employee buy-outs of nationalised industries in the period, notably National Express.

The European Cooperative Statute, which has been in force since 2006, permits worker cooperatives to be created by individuals or corporate bodies in different EU countries. It is a loose framework which devolves much detail to the national legislation of the country in which the European Cooperative Society (ECS) is registered. It permits a minority of shares to be held by 'investor members' which are not employees.

In North America

USA

The United States Federation of Worker Cooperatives is the only organization in the U.S. representing worker cooperative interests nationally. There are local networks and federations throughout the U.S. in the San Francisco Bay area, Minnesota, Portland, Oregon, and Boston, Massachusetts, and the Pioneer Valley region of New England.^[7]

Canada

Worker co-ops in Canada are represented by the Canadian Worker Co-op Federation(CWCF). Members of the CWCF are found throughout English Canada^[8]. Quebec has a distinct worker co-operative history, and is presently organised into a number of regional federations.

South America

Venuezuela

See also List of Venezuelan Cooperatives.

The Chávez government in Venezuela has a policy of financing worker cooperatives, resulting in a growing number in that country. ^[9]

Argentina

In response to the economic crisis in Argentina, many Argentinian workers occupied the premises of bankrupt businesses and began to run them as worker-owned cooperatives. As of 2005, there were roughly 200 worker-owned businesses in Argentina, most of which were started in response to this crisis. ^[10] The documentary film The Take is the best-known document in English about this phenomenon.

See also recovered factory.

India

India owns the largest co-operative in the world which is also a more progressive worker co-operative. They are running Indian Coffee Houses in the country. The Coffee Houses in India were started by the Coffee Board in early 1940s, during British rule. In the mid 1950s the Board closed down the Coffee Houses, due to a policy change. The thrown-out workers then took over the branches, under the leadership of A. K. Gopalan and renamed the network as Indian Coffee House. This history is recorded in Coffee Housinte Katha, a book in Malayalam, the mother tounge of A. K. Gopalan. The author of the book is Nadakkal Parameswaran Pillai one of the leaders of the ICH movement.

See also

• Employee-owned corporation
• Industrial democracy
• Workers' control
• Workers' self-management
• Workplace democracy

External links

• Cicopa - International Cooperative Organization
• US Federation of Worker Cooperatives
• Network of Bay Area Worker Cooperatives - (NoBAWC, pronounced "No Boss")
• History of Work Cooperation in America
• Beyond Capitalism: Leland Stanford's Forgotten Vision
• David Ellerman: Papers on political economy arguing in favor of worker cooperatives
• Worker cooperative forum
• Collectives, Workers' Cooperatives, and the IWW
• Worker Cooperatives Mapped on Platial.
• Federation of Workplace Democracies-Minnesota
• Worker Co-ops on the National Cooperative Business Association
• Article on difference between worker cooperatives and unions in Dollars & Sense magazine
• Valley Alliance of Worker Cooperatives

References

Part of the series on
Cooperatives
Types of Cooperatives
Agricultural cooperative Building cooperative Credit union Consumers' cooperative Cooperative banking Cooperative federation Cooperative union Cooperative wholesale society Housing cooperative Mutual insurance Retailers' cooperative Social cooperative Utility cooperative Worker cooperative
The Rochdale Principles
Voluntary and open membership Democratic member control Member economic participation Autonomy and independence Education, training, and information Cooperation among cooperatives Concern for community
Political and Economic Theories
Anarchism Cooperative federalism Owenism Socialism Social enterprise Socially responsible investing
Key Theorists
Robert Owen William King The Rochdale Pioneers G. D. H. Cole Charles Gide Beatrice Webb Friedrich Raiffeisen David Griffiths
Organizations
List of cooperatives List of cooperative federations International Co-operative Alliance Co-operative Party
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