Own The Change: Building Economic Democracy One Worker Co-op at a Time

Own The Change: Building Economic Democracy One Worker Co-op at a Time


The Financial crisis of 2008 sent the U.S
economy reeling and caused many people to go looking for new models for making a living.
One many turned to is the worker cooperative where workers own a share of the company and
have chance to run a business that also serves their community. But co-ops aren’t easy,
and they aren’t for everybody. Own the Change: Building Economic Democracy One Worker Co-op at a Time
takes a look at what it takes to get a worker cooperative off the ground. If you want to
know more, there are materials on our website that you can use to try it yourself. Worker cooperatives can be an effective strategy
to challenge the few companies that dominate the world economy. We really stopped seeing ourselves as an alternative.
We saw ourselves as the viable mainstream option for all the things, all the problems
that everyone had been complaining about through economic troubles throughout the decade. Creating worker owned businesses and creating
them in a network and at a point that can scale, I think can be done anywhere in any
community. I mean it’s really believing that my labor
and what I’m doing is really part of me and who I am. It’s a win when we all succeed, and we make
profit, and we’re on time, and on budget. And we all lose when we take a loss when we
have a learning curve or a project where unforeseen things come up. It becomes like a collective
knowledge. A lot of these things could be solved through
what we have experienced as worker-owners and as people who were able to apply that
model to all these different sectors in cooperatives. Worker cooperatives are part of the international
cooperative movement. Cooperatives are always based around their democratically run enterprises,
so businesses that meet members needs. In the case of a worker cooperative, those members
are actually the people who work there. Those members democratically control the workplace,
not necessarily the day-to-day operations or even the week-to-week operations but at
the very least they elect a board of directors and have a voice in big decisions in the co-op
and also where is this co-op really going, how does it treat its workers, what are our
main business operations, all those big decisions workers have a voice in and also what’s
the management structure. What management structure do we want that best sort of fulfills
the business needs and our personal workforce development needs. We own the business jointly, and we operate
in a democratic way. When we first started off, we did not think
about forming it as a worker owned cooperative. Then it came about, we started thinking we
wanted something different. We wanted something where we would feel empowered. We wanted something
where we were in control of how we structured things. And we wanted something that was beneficial.
We are all organizers in our own right, and we did not want to sucumb to the pressures
of private businesses and it being about money and not taking care of ourselves. We own it and we get to make the decisions
for ourselves. We have the ownership over our space, so we are constantly tweaking it,
creating it, and building it. We pay ourselves rather modestly, especially since we are reinvesting
a lot into the company. But, you know, I feel like we’re all feel really empowered. We
made it out of the typical system, and you can never go back once you’ve done that. We share out part of the surplus, the financial
surplus that is made at the end of the year in good years, so each worker gets a slice
of that pie. But we also get the chance to cross-train. So if I’m a driver I can be
trained to be a dispatcher or a mechanic. We’ve had a number of people gain skills
in other jobs to move around the cooperative. There are a lot of difficulties in launching
any business, including cooperative businesses, and I think that sometimes people can get
so excited about a co-op that they forget all of the unpaid time and labor intensive
thought and expertise that goes into launching any viable successful business. So, we face
that with our eyes wide open, and we began as independent contractors for AORTA. And
we said: how can we take the work that we’re already doing independently and make it work
better by pooling our resources and coming together and eventually forming a cooperative. You can’t start up a worker owned cooperative
with the idea that you’re going to make money right now. You have to start up a worker
owned cooperative with a vision of 10, 15 years from now what you want to leave. We
got our EIN number shortly after we started, and then we said, ok this is official. We’re
going to do this. It took basically almost a year between the conception of the idea
to when we launched. Circle of life started about 6 years ago,
founded by Jo Ann McNerthney in Bellingham, Washington. She was taking care of her father
at home and needed to hire caregivers to come into the home. And, what she noticed was that
in their other jobs, the caregivers were not making that much money, and they had no say
in their working conditions. And she thought, a worker co-op would just be the perfect model
for this group of people. And what she did was put out a public notice and asked caregivers
around the county: Are you interested in starting a business? Do you want to own your own business?
Do you want to work in caregiving under a different model? And people responded. And
this group of people met for about a year and a half and figured out how to start their
co-op and got their business licence, wrote up their bylaws, got licensed by the state
of Washington, and opened their business. One of the biggest challenges that cooperatives
face is that they haven’t really spent enough time thinking through their business model
their business strategy. It’s really understanding the business model, their business strategy.It’s
really understanding the revenue structure–how is it that you’re going to make money? It’s
understanding the customers, what kind of staffing is necessary, what kind of businesses,
or what kind of managerial talent do they need to make the business work. What is the
problem or need that you need to solve for someone because you need to create value for
someone else in this business. And if it doesn’t, then the business doesn’t exist. It’s
not going to survive in the long-run. Are you a viable, successful business that can
create value over the long term and increase the value you’re creating as you grow? All of our lives we’ve been told that we
were only this, and we were only that. And New Era Cooperative allowed us to see that
we were much more than that. Actually, what really surprised all of us, because we surprised
ourselves, at Republic we only thought we only knew how to make windows because this
is what we were, which is that we were window makers. When we moved into our own plant,
we found out that we were electricians. We found out that we were plumbers. You know,
we found out that we were people of industry. I found out I was a salesman. I would say the biggest factor for success
for a cooperative during the start off phase is rooted in this relationship of the founders
and the understanding and agreement they have with each other and their level of education
and training on: number one, how to run the business. So there is just purely the business
thing that any business needs to be successful. But number two, the democratic processes and
structures that they’re going to need moving forward to make the co-op be a successful
cooperative democratic business and to get really clear on what each founder expects
to get out of it. Having those really open, honest discussions amongst that group is really,
really important. When we first started working together as
a group, we weren’t a co-op. We were just a group of friends working to get a permit.
But as we worked together we realized each one of us had a skill or a talent that balanced
the whole group. No one of us individually could have gotten us a permit. A lot of organizations toying with the idea
or maybe getting into co-op development in low-income communities have experience in
community organizing, social work, things like that that are very valuable compliments
for cooperative businesses. They’re important pieces of the puzzle, but they don’t necessarily
have experience developing businesses. So key to effective co-op development is developing
great businesses and developing people and the combination of effective human and business
development. And most co-op developers emphasize one or the other, so I think building capacity
to do both is a key need for the sector. There’s too many times where cooperatives
have started up and just been like, we can do this, and then people realize their whole
lives they haven’t been practicing democracy. Democracy isn’t something that you do once
every four years. Democracy is something you have to do everyday in order to be good at
it and to actually run a business with it. So the important thing is, you know, learning
how to be in meetings. So, meeting before you start your cooperative, meeting about
what your decision making process is going to be like. The old phrase, “deciding how
to decide” actually discussing what your vision is, what your bylaws are going to be.
People have to learn how to be note-takers, have to learn how to facilitate meetings.
There are too many times that co-op groups fall apart because people just don’t know
how to talk to each other, don’t know how to have democratic conversations. And that’s
a process. It’s not something that’s going to happen over night. And maybe some people
have some of those skills already from other experiences, but too many times in our society
that’s just not something that we learn. Being a co-owner of a small business is a
really intimate thing. And so we first of all are structured. Our organizational structure
is that we’re all equal. We function on a consensus basis. We share tasks and responsibilities
to the greatest extent that makes sense. We also believe in specialization and support
one another. Our intent is to be checking in when something
is proposed, making sure that every single person is ok with going forward with that
decision. Somebody can stand aside if they feel a little tentative about it, or they
can say let’s try this for a little while and then revisit it later. What we learned was, or I learned, from one
of our coaches was vertical implementation in the field and horizontal decision making
at the board level. So, what does that mean? We’re not all equal. Oh, no! Co-ops don’t
want to hear that. No we’re not all equal. Some people have more skill and knowledge
than others. We all have an equal vote. We all have an equal say, but we don’t all
have equal skills and knowledge. So, what that means is that when you’re working on
a board level, everyone sits on an equal level around a circle or however. And we speak and
vote and treat each other as equals. But when we get into the field, it could change a lot
because one person has a whole lot of knowledge and has to impart that to a lot of other people.
And you don’t necessarily want everyone in the decision-making process in the field.
You want their inclusion, and you want them to look out for ways to make things easier,
or quicker, or more profitable. But you don’t want a conversation at every fork in the road.
You want to have a leader who takes you through the process in the field, meaning on the construction
site. But when you come into the office, it’s kind of like you leave that. You hang those
hats up, and you all wear the same hats in the office. To actually get the capital to start a cooperative
is a difficult process. You can try to scrape to get the little bits you have–what I call
the cracks in the sidewalk strategy. You can go to a traditional bank and face the incredible
amount of prejudice you’ll get there. But not just prejudice, but the desire of the
financial industry to get the spoils of your work. That’s the point of the capital industry.
So to get at the terms you need, if you’re actually going to own your own company and
own the surplus of your work, is difficult. There are options, like The Working World.
There are some other loan funds for worker cooperatives in the United States. There is
the Cooperative Fund of New England, North Country Development Fund. But right now the
other options–people have used crowdsourcing. Again, that’s actually another form of getting
people to have capital. I mean it’s only 50 bucks but getting them to have that be
for the benefit of others, have that be so that the people can use capital to their own
ends. There were a couple of issues that Union Cab
faced when starting, that had they gone a different way would have resulted in the failure
of the enterprise. The first one was just raising enough capital. And the original founders
really dug deep into their pockets, hit up their family members, and were, again, lucky
enough to get this publicly financed community development block grant to help with their
initial capitalization. And that was, you know, touch and go, I think, for a while. Our wages are not as simple as saying, we
get paid. You know, we charge a certain amount per hour, and we get paid that, and we keep
it moving. In our model, and this took a long time to go back and forth and negotiate with
each other, we had people that would help us. We did a retreat dealing specifically
with this. We had a Green Worker Cooperative, through it’s co-op academy, provide support
with this decision, and we had an attorney from the Urban Justice Center that does cooperative
law, basically, help us through this as well. So it wasn’t just as simple as, oh– A lot
of people might think that it’s like you just get together and develop your own stuff.
We do, but we also ask for support from the different skill community that’ out there
to support worker owned cooperative. Well, everybody here makes the same wage,
so there’s no hierarchy between members at all. Everybody makes the same wage, and
everybody’s probably given–everyone’s given the same amount of respect. At Union Cab our pay disparity is 1 to 2.2
so from the very beginning phone answerer to the business manager. Personally, I took
a huge pay cut, but the benefits really outweighed the money. In the worker cooperative kind of scene, the
term profit is not always used in the same way. We sometimes think of it as surplus.
Like, what is the surplus money after we’ve paid all of our electricity bills, all our
things we’re selling, and even our wages. So then we have the surplus of what’s left
over. We divvy up our profit at the end of the year,
going through what we made as a whole and putting back in what it takes to run the business
for the next year to come. And we find out how much profit we can play with, and we divide
it up to each employee in the cooperative. Our buy-in is $3,000, so we will take a paycheck
deduction. And then once that is started, the worker will then get health care benefits
as well as other things like company paid cell phones. And at the end of the year we
will give out a bonus, so to speak, if the shop were to make money. The profits that
we make for the year will be divided equally amongst the worker-owners and the shop. It’s important for a startup co-op to be
connected in networks of other co-ops because there are a ton of resources out there for
people trying to get something like this started. Free resources that you don’t have to pay
for. The U.S. Federation of Worker Co-ops has just compiled this amazing database of
documents of other co-ops documents, process documents, startup documents. And if you live
in a part of the world where there are other co-ops and you’re wanting to start a co-op,
I would just go hang out there. Talk to the people because really, just as an individual
co-op enterprise can only be successful if there is good relationships amongst the members,
the co-op movement as a whole can only exist as a movement if the co-op businesses are
engaged in these ever-expanding layers and levels of networks and cooperating with each
other. That brings a value that is not financial or even quantitative but that is life giving.
It’s really the life of the co-op. I do feel that the small cooperative initiatives
and the small cooperatives have a really important place in our ecosystem, and actually when
they come together they can kind of create something that’s bigger than the sum of
it’s parts as well. But I feel that the greatest need is for larger cooperatives within
our ecosystems and for systems change. We really do want to encourage businesses
that are of scale, and scale can mean a lot of different things. So, one of the most fabulous
ways is it’s a business that employs a lot of people. So there are some example like
that. Like Cooperative Home Care Associates has over 2500 members, over 2500 members,
and that’s a business of scale. There are other examples of scale, which are businesses
that are part if a network. And so a good example of that is the Arizmendi bakery. They
are a network of small businesses, but as a group they employ a whole lot of people
and create real jobs and real economic opportunities for a large set of workers through a series
of interconnected small businesses. Project Equity, the group that I’m currently
co-founding is collaborating with other stakeholders to develop a blueprint for increasing worker-ownership
in the Bay area. And we’re actually looking at multiple pathways. So, we’re doing a
co-op academy to support small-scale cooperative startups and growing cooperative because we
think with a little extra support, business coaching, legal advice, and for co-op developers
some education on how to do co-op development effectively, that those initiatives can be
more effective. And then we’re also looking business opportunities for larger scale worker
cooperatives. So Allison, my co-founder, and I are focused on developing cooperatives that
can employ 50-100, or more, people. So looking at scale very explicitly. And in the Bay area
at bluprint, we’re also looking at opportunities for conversions of existing businesses into
worker-ownership. Within Puerto Rico, they actually have a cooperative
development commission, and this is part of the governor’s cabinet–there is a position.
And they’ve partnered with the Department of Education, and they have a goal to have
a student owned cooperative within every single school in Puerto Rico. If you read the legislation,
it really gets into the idea of developing an understanding of the cooperative model
and how it can be used so when these students get into and start contributing to the economy,
it will be part of their foundation. It’s not an alternative. It’s part of what they
believe in and what the economy can do for them and using the cooperative model to achieve
their goals and the community’s goals. I’m somebody who does economic democracy.
I’m somebody who does cooperatives. And I want to see cooperative development lift
up communities throughout the Delaware Valley and throughout my region. We’re part of this bigger movement. We actually
represent so much just by existing, just by showing people that it’s possible,being
successful and being a living , breathing, working example of a better way to do things–a
better way to do business. I was in another form of a cooperative, but
it wasn’t my cooperative. It was called sharecropping. I come from sharecroppers.
And now I have my own company, and it feels so great. It feels so good. This documentary was made possible by The
National Cooperative Bank, The Surdna Foundation, The Fund for Democratic Communities, and all
our contributors to our crowdfunding campaigns. Find out more. We have how-to guides prepared.
Go to either of these websites to learn more.

Author:

22 thoughts on “Own The Change: Building Economic Democracy One Worker Co-op at a Time”

  • This is quite frankly, Native American culture. We had this figured out a long time ago. Happy that Americans are finally waking up to other modes of existence.

  • Simple Living says:

    Excellent vid on co-op. Looking for easy system to start small co-op.   First need to find demand, or even from members themselves. Start one and you can say that I am a business owner.
    Questions and details on primarily for California.
    1. Recruit employees, members and worker owners.
    2. Benefit structure, profit sharing, salary (higher than average market or lower?)
    3. Initial funding, personal loans from founders?
    4. Conflict resolution
    5. Management, run meetings, org structure
    6. Worker relation
    7. Manager salary, 3-4 times lowest worker salary, base on Mondragon model.
    8. Benefits over other business models.
    9. Create tightly connected co-op network of different businesses to support each other, locally, nationally, and globally.

  • I wish that the documentary had addressed following issues.

    1) How do Co-ops deal with the Free Rider problem and Adverse Selection? All I heard was some vague rhetoric about learning to function in a democracy and sharing the workload.

    2) It sounds like Co-ops need significant upfront capital or expertise. How are young or poor workers suppose to get involved?

    3) One could argue that successful Co-ops utilize workers who could have made far more money in the private sector. These skilled workers have merely traded money for flexibility, group benefits such as insurance, and job security. This sounds like a solution to making the lives of skilled middle class lives better, not solving income disparity and other economic woes.

    4) Do Co-ops successfully compete with other businesses in the same field? Or are they basically charity cases that live off the pity purchases of hippies with real jobs?

    For those reasons I don;t really care a lot for this guide.

  • If only there was a way for wealthy people to invest in both workers co-ops and corporations and then pit them against each other on a level playing field. The evidence has shown that worker co-ops may be the most efficient form of business because workers who are part owner work harder and don't social loaf as much.

    I know most of us consider the ultra rich to be the enemy, but there must be some out there who ONLY want the most efficient form of business.

  • Can cooperatives work without endless meetings? That's the bane of inefficiency in most workplaces. Is there a balance between democratic decisions on some things and not on others, that is, by entrusting someone to manage certain things, or even have more of an authority. Some people don't want to consider everything, to think about choosing everything about everything. The reason I ask is that most of these images include single interviews and meetings. I hate meetings, most people I've ever been to meetings with hate meetings.

  • Prashant Kumar says:

    Cooperative movement is the only answer to Capitalism. This is the revolution. This is also an answer to top to down governance, trickle down economy and the global POVERTY. As it seems communist the international agencies have come up with Micro credit and micro finance.
    This is a just, democratic and empowering way of doing business. But it needs to be prioritized by the state intervention. Without support of state its may not achieve large scale impact. In India, initially we had a planned socialist model of development planing then agricultural cooperatives were used in order to ensure that the bottom 98% could get hand holding of the state for coming out of poverty. But today we are a part of global capitalism.
    Anyways thanks a lot for bringing this here. Gratitude.

  • Free Information says:

    Not to quench the enthusiasm, but… there will come a time when you become fed up with process and want to outsource your engagement in the planning and decision-making to someone competent in those fields. The direct democracy of a coop only goes that far. You would need to make a choice about what your own role in the company should be, because you can't be everywhere all the time. And noone is good at everything neither. You have your strengths and weaknesses and it would be better if someone else took care of or represented you in the weak areas.

    I have met a lot of folks who are awful at planning, yet see themselves as excellent. I wouldn't want to be in a company where delusional people were part of the decision-making and planning. I would want professionals, not amateurs who think they are clever. How to you deal with that in a coop? Or do you just have to live with it?

  • gftusd اتحاد عمال صلاح الدين says:

    اين التعاونيات اي المؤسسات التعاونية في العراق حان وقتها الان

  • Downtown's Uptown says:

    This:

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  • anas mohammad.alsaeed says:

    could you please provide me with some resources, the websites are not working, maybe it will be a good idea if you attached some links
    .
    thank you from the Netherlands!

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