RED EMMA'S • INTRO TO WORKER COOPERATIVES
Intro to Worker Cooperatives
Version 0.1, April 2014
RED EMMA'S • INTRO TO WORKER COOPERATIVES
History of cooperatives
There are many antecedents for cooperatives in the
commo...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
History of cooperatives
Cooperatives proper really only get started as a
respons...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
History of cooperatives
Most early cooperatives were consumer cooperatives;
work...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
History of cooperatives
The Rochdale Society of
Equitable Pioneers,
founded in 1...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
1. Voluntary and Open
Membership
2. Democratic Member
Con...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
1. Voluntary and Open Membership
●
Cooperatives are volun...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
2. Democratic Member Control
●
Cooperatives are democrati...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
3. Members' Economic Participation
●
Members contribute e...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
4. Autonomy and Independence
●
Cooperatives are autonomou...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
5. Education, Training and Information
●
Cooperatives pro...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
6. Cooperation among Cooperatives
●
Cooperatives serve th...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
What is a cooperative?
7. Concern for Community
●
While focusing on member needs...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Cooperatives today
●
1 billion people worldwide in cooperatives
●
300 largest co...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Types of cooperatives
●
Consumer cooperatives
– Co-op grocery
– REI
●
Financial ...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: political economy
In a standard capitalist
employment situa...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Mondragón:
Founded during the Franco years
by a Ca...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Emilia-Romagna:
Massive interconnected network of ...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Argentina
Worker cooperative sector
exploded in th...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Isthmus Engineering
(Madison, WI)
Advanced industr...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Equal Exchange (MA)
About 100 worker
owners, dedic...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Cooperative Home Care
Associates (NYC)
About 1000 ...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Evergreen (Cleveland, Ohio)
About 75 worker-owners...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
WAGES (Bay Area)
A nonprofit incubator for
green h...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Real Pickles (MA)
Company operating a 100%
solar-p...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
New Era Windows
After occupying their factory
twic...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: examples
Cincinnati Union Coop Initiative
Multiple unions w...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: legal/financial
Cooperatives?
Some states have
provisions f...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Option #1: Corporation
Each cooperative member owns a share in the business; all...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Option #2: Limited Liability Company (LLC)
Each cooperative member is an equal p...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: management
A default option,
especially for small,
politica...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: management
The collective model doesn't necessarily scale w...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: management
Solution:
Separate management
from governance, w...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: management
One further complication related to scale is tha...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: management
Solution:
Incorporate a more traditional
busines...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: management
Equal Exchange:
Very hierarchical and
traditiona...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
Worker cooperatives: challenges
Education
●
Need the general public to take coop...
RED EMMA'S • INTRO TO WORKER COOPERATIVES
More info....
●
Advocacy &
networking:
●
USFWC
●
NCBA
●
Legal:
●
SELC
●
UB CDC
●...
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Worker Cooperative Intro

  1. 1. RED EMMA'S • INTRO TO WORKER COOPERATIVES Intro to Worker Cooperatives Version 0.1, April 2014
  2. 2. RED EMMA'S • INTRO TO WORKER COOPERATIVES History of cooperatives There are many antecedents for cooperatives in the commons—the many ways that communities have shared control of their means of survival for the majority of human history.
  3. 3. RED EMMA'S • INTRO TO WORKER COOPERATIVES History of cooperatives Cooperatives proper really only get started as a response to the rise of industrial capitalism in 18th and 19th centuries: the basic idea is that by banding together, people have more economic power.
  4. 4. RED EMMA'S • INTRO TO WORKER COOPERATIVES History of cooperatives Most early cooperatives were consumer cooperatives; workers forming associations to purchase larger quantities at better prices, selling them to themselves in cooperatively owned stores.
  5. 5. RED EMMA'S • INTRO TO WORKER COOPERATIVES History of cooperatives The Rochdale Society of Equitable Pioneers, founded in 1844, laid the basis for the modern cooperative movement
  6. 6. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 1. Voluntary and Open Membership 2. Democratic Member Control 3. Member's Economic Participation 4. Autonomy and Independence 5. ● 5. Education, Training, and Information 6. Cooperation among Cooperatives 7. Concern for Community
  7. 7. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 1. Voluntary and Open Membership ● Cooperatives are voluntary organizations, open to all people able to use its services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
  8. 8. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 2. Democratic Member Control ● Cooperatives are democratic organizations controlled by their members—those who buy the goods or use the services of the cooperative—who actively participate in setting policies and making decisions.
  9. 9. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 3. Members' Economic Participation ● Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.
  10. 10. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 4. Autonomy and Independence ● Cooperatives are autonomous, self-help organizations controlled by their members. If the co-op enters into agreements with other organizations or raises capital from external sources, it is done so based on terms that ensure democratic control by the members and maintains the cooperative’s autonomy.
  11. 11. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 5. Education, Training and Information ● Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperative. Members also inform the general public about the nature and benefits of cooperatives.
  12. 12. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 6. Cooperation among Cooperatives ● Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
  13. 13. RED EMMA'S • INTRO TO WORKER COOPERATIVES What is a cooperative? 7. Concern for Community ● While focusing on member needs, cooperatives work for the sustainable development of communities through policies and programs accepted by the members.
  14. 14. RED EMMA'S • INTRO TO WORKER COOPERATIVES Cooperatives today ● 1 billion people worldwide in cooperatives ● 300 largest co-ops have annual revenues of $1.6 trillion ● 130 million people in co-ops in the US ● ●
  15. 15. RED EMMA'S • INTRO TO WORKER COOPERATIVES Types of cooperatives ● Consumer cooperatives – Co-op grocery – REI ● Financial cooperatives – Credit union ● Producer cooperatives – Organic Valley, Land of Lakes, Ocean Spray ● Purchasing cooperatives – ACE Hardware ● Housing cooperatives ● Worker cooperatives – Red Emma's! ● Hybrid cooperatives
  16. 16. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: political economy In a standard capitalist employment situation, a worker receives a wage, but the product of their labor is worth more than what they are paid. That surplus is turned into profit, and the owner of the capital controls its distribution. ● In a worker cooperative, the workers jointly own and control the capital, and they can decide how to allocate any surplus themselves in a democratic fashion. Strictly speaking, there is no profit and no wages.
  17. 17. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Mondragón: Founded during the Franco years by a Catholic priest and a handful of workers, now a major complex of cooperatives that acts at multinational scale.
  18. 18. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Emilia-Romagna: Massive interconnected network of coops in an area of Italy that was a few decades ago one of the poorest, now one with the least unemployment and highest average standard of living. Multiple (Communist, reformist, and Catholic!) co-op federations building regional power, with support of government policies encouraging reinvestment in the co-op economy.
  19. 19. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Argentina Worker cooperative sector exploded in the wake of the 2001 financial crisis.
  20. 20. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Isthmus Engineering (Madison, WI) Advanced industrial automation, about 30 worker-owners. ●
  21. 21. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Equal Exchange (MA) About 100 worker owners, dedicated to providing a platform for large scale truly fair trade coffee sales in the US ●
  22. 22. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Cooperative Home Care Associates (NYC) About 1000 worker-owners in a company of 2000; women of color (primarily) doing formerly precarious domestic care work. Institutionalized the gains of an innovative SEIU organizing drive. ●
  23. 23. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Evergreen (Cleveland, Ohio) About 75 worker-owners in three co-ops, designed to service stable demand for goods & services from large non-profits like universities & hospitals, and to create green jobs in underserved communities. ●
  24. 24. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples WAGES (Bay Area) A nonprofit incubator for green housecleaning cooperatives for immigrant women. ● ●
  25. 25. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Real Pickles (MA) Company operating a 100% solar-powered local organic pickle factory crowdfunded a conversion to a worker cooperative to lock in its social mission for the long haul. ●
  26. 26. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples New Era Windows After occupying their factory twice, a portion of the UE workers in Chicago decided to go the worker cooperative route, and successfully bought out enough the old company to restart production cooperatively. ●
  27. 27. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: examples Cincinnati Union Coop Initiative Multiple unions working together to create green worker-owned jobs ● ●
  28. 28. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: legal/financial Cooperatives? Some states have provisions for cooperative ownership structures, these may or may not be suited to worker cooperatives. In states like Maryland, you have to fake it, by using other business structures and tweaking them for use as the legal basis of a cooperative.
  29. 29. RED EMMA'S • INTRO TO WORKER COOPERATIVES Option #1: Corporation Each cooperative member owns a share in the business; all shares are equally valued and have equal voting power. Advantages: Lower corporate income tax, separate corporate person which can do things like own the assets of the company, possibility of using shares to raise external (none-voting) equity Issues: Corporations are required by law to have certain governing structures, which may not be compatible with all models of workplace democracy. Worker cooperatives: legal/financial
  30. 30. RED EMMA'S • INTRO TO WORKER COOPERATIVES Option #2: Limited Liability Company (LLC) Each cooperative member is an equal partner in the business; an operating agreement spells out cooperative rights and responsibilities. Advantages: Much more flexibility to define a structure that reflects you actual concrete commitment to workplace democracy. Issues: All profit and ownership of property passes through to members at the individual level, where it's taxed at a potentially higher rate. Worker cooperatives: legal/financial
  31. 31. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: management A default option, especially for small, politically motivated cooperatives, is the collective structure, where management and governance are both maximally horizontal and everyone does everything.
  32. 32. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: management The collective model doesn't necessarily scale well: ● In a collective of 5, there are just 10 person-to-person relationships that need to work well for the project to function ● In a collective of 10, there are 45 ● In a collective of 25, there are 300 ● In a collective of 50, there are 1,225 ● In a collective of 100, there are 4,950 ● …. ●
  33. 33. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: management Solution: Separate management from governance, with management happening collectively at a departmental level, and governance happening through a representative elected body.
  34. 34. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: management One further complication related to scale is that while small collectively managed teams work well for some kinds of work, they aren't necessarily the best option for running an efficient business in certain situations. ● Sometimes tighter coordination is needed to match production to sales demand ● Sometimes cooperative members lack necessary business expertise ● Sometimes the business has other priorities besides maximal internal democracy (i.e. higher wages, more jobs created, or more ethical products in the marketplace)
  35. 35. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: management Solution: Incorporate a more traditional business structure, with a board of directors governing the project, possibly including external advisors who aren't worker-owners, and with that board hiring management to direct business operations.
  36. 36. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: management Equal Exchange: Very hierarchical and traditional business structure, but with ultimate democratic control of the company located in the worker-owners.
  37. 37. RED EMMA'S • INTRO TO WORKER COOPERATIVES Worker cooperatives: challenges Education ● Need the general public to take coops seriously ● Need more technical expertise and know-how Capital Access ● Starting sustainable businesses isn't cheap, but most sources of business credit don't work easily for cooperatives Policy ● Need incentives for co-ops ● Need public support for co-op infrastructure and development
  38. 38. RED EMMA'S • INTRO TO WORKER COOPERATIVES More info.... ● Advocacy & networking: ● USFWC ● NCBA ● Legal: ● SELC ● UB CDC ● Policy : ● Democracy Collaborative ● BCWB ● ● Other support: ● Union Coops ● Shift Change ● Grit TV/Yes! ● Financing: ● The Working World ● NCDF ● Technical assistance: ● DAWN & DAWI

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