On worker cooperatives and workplace democracy

This traditional relationship between an employer and employee is the only relationship that most of us know. These social relations seem fundamental and immovable, but they can be changed. (Tømas/Flickr Creative Commons)

Think about the last job you held. As long as your check cleared, how much did you care about the company’s success? How much did you care about their goals and ambitions? Maybe a little, if you were a committed employee. Conversely, how much do you think the CEO or owner of the company cared about you? Did they view you as a person to invest in and nurture? Or, more likely, did they view you as an asset which they were trying to squeeze the most labor out of at the least cost?

This traditional relationship between an employer and employee is the only relationship that most of us know. These social relations seem fundamental and immovable, but they can be changed. By allowing employees to own and run their companies, we can break the status quo and create a more equitable economy. Employee-owned businesses are motivated by worker welfare and community building rather than profit and efficiency.

The most common way to promote employee ownership is the Employee Stock Ownership Plan (ESOP), which gifts or allows employees to buy stock options in their company. Large companies like Publix, the hugely popular Florida grocery chain, operate under ESOPs and are over 50% employee-owned. Employee-owned businesses can also take the form of worker cooperatives — a much more holistic solution, in my opinion. In this setup, workers — and workers only — vote on company decisions. Imagine electing your boss, for instance. It’s a tantalizing model, particularly if you believe that workers are being crushed under the heel of wage stagnation and hobbled by collective bargaining power (I know, I know, I sound like I’m paraphrasing Das Kapital right now).

The appeal of worker cooperatives is clear. Who wouldn’t want to be able to fire their boss? Who doesn’t think they could improve the way their company works? Who doesn’t want to control their pay? And there’s sound evidence that worker cooperatives can be extraordinarily effective. A wide-ranging study of literature on worker cooperatives, conducted by Virginie Perotin of Leeds University, found that worker cooperatives create more sustainable jobs and integrate into communities more seamlessly, while maintaining similar or better levels of production than their top-down counterparts. The workers are happier and more committed to the company, which engenders a collaborative, productive atmosphere. Worker cooperatives are more likely to innovate by incorporating a broad range of ideas. A 2009 case study of worker cooperatives in Uruguay found they responded to economic crises in a more socially efficient manner. Worker cooperatives are more likely to make decisions which benefit all community members — like committing to a low-pollution business model. Think about it: Would you vote to continue a practice that is harmful to the surrounding community if you were a member of the surrounding community?

On the other hand, this management style raises concerns about efficiency. Many critics think the current model of top-down control is perfectly streamlined and that any democratic mechanisms would be clunky and slow down decision-making processes. Can a company even function without a boss? Who would make the “executive decisions?” Critics cite anecdotal evidence , like the Austin, Texas based restaurant which debated the addition of a patio for years before agreeing to build it, or the Occupy Wall Street movement, which reportedly took hours to decide the location of their next meeting.

But these concerns, while reasonable, are unfounded. We have to view these worker cooperative hiccups in the same lens as we view our countrywide democracy. America could surely make quicker decisions if the president was imbued with ultimate power — but we would lose the vital checks and balances which help our country avoid authoritarianism. And even if worker cooperatives were significantly less efficient (which they aren’t), a bit of clunky decision making would be a fine price to pay for sustainable, community-based, worker-oriented decision making.

During the last election cycle, we were often told that the country should be run more like a business. The people who said this got it twisted: it’s time for our businesses to be run a bit more like a country — democratically, beholden to its citizens and committed to their welfare.


Harry Zehner is a staff columnist for The Daily Campus. He can be reached via email at harry.zehner@uconn.edu.