Category Archives: Worker Cooperatives

Efficiency in Employee-Owned Enterprises: An Econometric Case Study of Mondragon

Source: Saioa Arando, Monica Gago, Derek C. Jones, Takao Kato, ILR Review, Vol. 68 no. 2, March 2015
(subscription required)

From the abstract:
The authors undertake the first econometric study of efficiency for Eroski, the largest member of the Mondragon group of worker cooperatives. Three types of stores are found within Eroski: 1) cooperatives with significant employee ownership and voice; 2) cooperatives with modest employee ownership and limited voice (known as GESPAs); and 3) conventional stores with no employee ownership. Key data are monthly observations—9,800 for supermarkets and 2,150 for hypermarkets (large superstores combining supermarkets and department stores). By estimating first-difference models, the authors find that hypermarket stores with cooperative ownership have significantly faster sales growth than do GESPA stores. For supermarkets overall, they find no significant differences in performance among the three types of stores. For a subgroup of small supermarkets, however, cooperatives outperform conventional stores. To investigate the mechanisms that help explain why cooperatives perform better, the authors provide additional evidence that takes into account the more extensive opportunities for employee involvement, training, and stronger economic incentives in cooperatives. While cooperative members are better paid than peers in comparable firms, individual data show that job satisfaction is lower for cooperative workers than for GESPA workers. Though this may reflect higher worker expectations in cooperatives, alternatively cooperatives may constitute a “high-stress work system.”

Solidarity, PA

Source: Abby Scher, Dissent, Vol 62 no. 1 (whole no. 258), Winter 2015

…Before I arrived, civic leaders warned me that because of its good bones, I wouldn’t be able to tell at first glance that Reading was under Act 47, the Pennsylvania law governing municipal bankruptcy, or that it is one of the poorest cities of its size in the nation. Just over 39 percent of its 88,000 residents lived in poverty in 2013. Many of them are the working poor: Reading’s unemployment rate in the summer of 2014 was about 6 percent…. Like most cities, Reading lures employers with tax incentives. It is tempting to give subsidies to bring even a hundred jobs into town, but that overlooks small businesses that have been the nation’s top job generators over the past fifteen years. …. A more obvious stream of inspiration for Reading’s civic activists is “localism,” a largely middle-class movement, often of small-business owners, which challenges the inevitability of globalization by promoting local small enterprises, municipal ownership, and sustainable local economies. Like solidarity-economy activists, localists are trying to rebuild social relations in communities hurt by disinvestment, not just create jobs and growth. Localism is visible in the growing prominence of the forty-year-old “think and do tank” Institute for Local Self-Reliance and organizations such as the 22,000-member Business Alliance for Local Living Economies (BALLE), which the City of Reading has joined. Like solidarity-economy activists, localists are refusing to accept their weakened influence on the economy and public policy in the face of corporate power. Like solidarity-economy activists, many embrace municipal ownership of utilities or even champion cooperative ownership. But it is a diverse movement and at its worst, localism can be “reduced to shopping at farmers markets and local stores” and “turning your back on the world’s environmental and social problems,” as scholar David Hess warns. In addition, some localists are skeptical about the role of unions in building economic alternatives…..

Co-ops a Growing Form of Economic Activity

Source: Jennifer Burnett, Council of State Governments, The Current State, Issue: 3, February 9, 2015

Co-ops are gaining in popularity as a new form of business creating economic activity in the states. Based on their unique structure, some studies suggest that cooperatives may have a greater economic impact than their more traditional counterparts, including paying higher wages.

Identifying Co-op Allies: A Framework for New Economy Organizing

Source: Giles Simon, Grassroots Economic Organizing, December 15, 2014

So, what I want to do here …. is to try to stand back from the co-operative movement as we know it and think about what other organisations, networks and groups are out there who have similar purposes. I don’t have any simple answers, but what I hope to offer is a framework for discussion….

A Co-op State of Mind

Source: Ajowa Nzinga Ifateyo, In These Times, Vol. 38 no. 9, September 2014

New York City jumpstarts worker cooperatives. …. The worker cooperative model, in which a business is owned and controlled by its members, is rarely taught in U.S. business schools, but it is gaining a reputation as a way for social service agencies and city councils to provide jobs for workers marooned by the current economy. ….

“What Then Are We To Do?”: Understanding Co-ops And The IWW

Source: Industrial Worker, #1770, Vol. 111 no. 10, December 2014
(scroll down)

Could cooperatives usher in the next American Revolution? Historian, political economist, activist, and writer Gar Alperovitz argues that they could. I heard Alperovitz speak this past October at the Annual Membership Meeting of the natural and organic grocer, La Montañita Co-op (LMC) in Albuquerque, N.M. I was interested to learn if Alperovitz could offer some insight that would aid the IWW in its efforts to promulgate worker-owned cooperatives under the 2014 revision of co-op rules in our Constitution. I also wanted to observe the reaction that this speaker would receive from a consumer co-op, as not all co-ops are created equal. ….. Gar Alperovitz’s work on the New Economy Movement presents some exciting models of how to democratize wealth and move “Beyond Corporate Capitalism & State Socialism.” The capacity of models like Evergreen to build and democratize wealth offers something not covered in the IWW Organizer Training 101. It also offers a model for organizing among the unemployed and underemployed. …. The website http://www. community-wealth.org is a good starting point. An assessment of whether or not and how to partner with truly worker self-managed co-ops and activists within the New Economy Movement should also be considered….

Founding Worker Cooperatives: Social Movement Theory and the Law

Source: Ariana R. Levinson, University of Louisville School of Law Legal Studies Research Paper Series No. 2014-18, April 24, 2014

From the abstract:
This is the first legal article, to the author’s knowledge, to apply social movement theory to the foundation of worker cooperatives in the United States. It also begins a series of articles with three goals. First, the application of social movement theory to worker cooperatives should suggest further areas of inquiry in developing the various social movement theories. Second, unions and others can seek guidance from social movement theory as they seek to give workers a voice at work by establishing worker cooperatives. Finally, social movement theory may suggest how the law can be reformed to aid in creating movements to establish cooperatives. This first article applies three social movement theories to five historical examples of worker cooperatives in the United States. It focuses on the establishment of the cooperatives rather than their success over time. The article proceeds in six parts. Part I introduces the subject. Part II describes worker cooperatives generally and provides five historical examples of worker cooperatives. Part III describes three social movement theories, applies them to various of the movements to found worker cooperatives, and draws conclusions and suggests further areas of inquiry. Part IV provides insights for those wishing to establish cooperatives, emphasizing the importance of the cooptation of structures intended for other purposes, education of leaders, internal organizing, availability of resources, and government support. Part V briefly mentions potential legal reforms, and Part VI concludes.

NYC Worker Cooperative Conference 2014

Source: NYC Network of Worker Cooperatives, June 2014

The New York City Network of Worker Cooperatives will hold its first annual conference of presentations and discussions about economic democracy and the road to economic justice.

1. Welcome + What is a Worker Cooperative?

2. Working at a Worker Cooperative

3. Connecting to Social Justice

4. Building a Worker Cooperative Economy

5. City Support for Economic Democracy