About co-ops
What is a worker-owned cooperative?
Cooperatives are businesses that are owned and governed by their workers, NOT by shareholders or corporate CEOs. There are co-ops all over the US, and throughout North America and the rest of the world. In many places, cooperatives are organized as non-profits that deliver critical services such as health care, education, or environmental conservation. Other co-ops, like ours, are businesses that produce goods or services for sale in the market place.
How is a coop different from a regular company?
Governance, y’all. In an ordinary company the proprietor or a board of directors make decisions about the business—like what products or services to produce, what working conditions are like (including safety), how much to charge, where to sell, how much to pay the employees, etc. Also: profits, y’all. In a regular company, after meeting expenses, the board can decide to re-invest in the business, make charitable contributions, or give out lavish bonuses to top executives (even when they mismanage the firm). (Yes, the board could decide to give out lavish bonuses to its workers at all levels, but guess how often this happens?) In a typical company, most of these decisions are usually made with an emphasis on the bottom line. In the case of publicly traded firms in the US, corporations are legally obligated to make decisions that maximize profits—whether the true cost of that decision is moving a factory overseas, paying a wage below the cost of living, or despoiling the environment (we recommend the film The Corporation for more about corporations in the US).
In a co-op, we the workers/producers are in charge. As a grammatically challenged erstwhile leader of our free country might say (though he would probably never join a co-op), “We are the deciders.” We determine how much to get paid for our efforts as well as what to do with our profits after meeting expenses (paying taxes, rent, capital-stock costs, etc.). True, worker-owners still engage in business to earn a living—but their “bottom line” motivations are different than publicly-traded companies. For example, worker-owned enterprises would not outsource their factory overseas in an effort to maximize profits. Worker-ownership places the people doing the labor in a position to ensure that they labor under conditions that are safe. Given that worker-owners typically live where they work, they also have a vested interest in making sure that their enterprise does no harm to the local environment, but this is only the beginning of the potential for worker-owned businesses to think and behave quite differently than their capitalist counterparts.
What do we do with profits?
We can only speak for ourselves; all cooperatives are at liberty to decide what to do with the money they make. At Co-Op One-Oh-Eight, we re-invest in our business; we pay ourselves a living wage; we make charitable contributions to organizations that support other worker-owned co-ops. We do what we want, because we can!
Tell me more!
One important thing that worker-owned companies do quite effectively is cooperate. Our cooperative’s products are marketed in food co-ops and other worker-cooperative businesses. We are committed to getting locally sourced supplies and supporting small businesses in our area. In other places in the world inter-cooperation has allowed for the construction of regional economies characterized by strong interconnections among source suppliers. Mondragon, possibly the world’s best-known cooperative, is famous for having started a bank that pools profits from member worker-cooperatives as a basis for starting new cooperative ventures, allowing it to grow from a five workers in the early 1950s to a hundred interconnected firms, one hundred thousand workers, and assets in the tens of billions of euros.
There is still plenty of room for the growth of worker cooperatives in the United States. While this form of the cooperative is relatively few in number, the US has many other forms of cooperative institutions. In addition to worker-cooperatives, there are four other major categories of cooperatives:
- Consumer cooperatives where members buy shares in exchange for the discounts that accrue from purchasing goods and services in bulk—from energy to food (locally, think River Valley Market or Green Fields Market)
- Producer cooperatives, common in the agricultural sector, that allow individual farmers to exercise the same power of cooperation through both the discounted aggregate purchasing and/or shared marketing of products (like Our Family Farms)
- Financial sector cooperatives like credit unions
- Public sector cooperatives that provide services like education or health care
While the degree of democratic participation and levels of involvement in the day-to-day operation of these enterprises and efforts vary, in principle it is possible to imagine a future where cooperation amongst these different cooperative sectors might facilitate the proliferation of worker-owned firms in many additional sectors of the US economy.
How can I learn more?
General resources
- Co-op FAQs at the Valley Alliance for Worker Cooperatives, a Pioneer Valley organization dedicated to advancing the cooperative economy
- http://www.com/munityeconomies.org/Home
- http://populareconomics.org/ussen/
