Whenever we hear about labor relations it’s easy to focus on the conflict between workers and owners. Whether it’s unionized taxi drivers protesting Uber or Amazon fighting to keep unions out of its warehouses the stories start to sound the same. Labor vs management, workers vs capital, it’s easy to think that this is “just how things have to be.”
But what if instead of two warring sides, workers and owners were just the same side?
What would that mean? How would that even work?
Well, we don’t have to guess, because for hundreds of worker-owned cooperatives across the country that’s just what they call “Wednesday.” And you’ll see they actually work better than you might imagine.
Not a New Idea
Cooperative ownership is one of three fundamental business ownership models. The other two being: state-owned and privately-owned (which includes publicly traded private companies). A worker cooperative (also called a co-op) is a business that is jointly owned and self-managed by its workers.
Because each co-op is a creation of all its members, none are identical. But there are common principles that a co-op may choose to follow. They also, by definition, follow one basic rule: Each worker contributes their labor, gets a say in the co-op’s democracy, and gets an equal share of the co-op’s profits. In other words:
“1 worker, 1 vote, 1 share.”
Coincidentally, if we summarized modern publicly traded corporations like this, the rule would be something like “each owner gets shares and votes equal to how much money they’ve invested.” If you noticed that “workers'' don't even factor into the rule, you’re right - private companies are fundamentally anti-democratic and it’s why some describe them as “mini dictatorships.”
Co-ops Work for Everyone
But why does this matter? So what if some companies make a concerted effort to follow a different ideology entirely? Research shows that it’s not only worker-owners who benefit from a co-op’s democratic ideals, but also the business and its customers.
A 2011 research monograph “Capital and the Debt Trap” found that co-ops tend to be more stable while also being more responsive to the customers and communities they serve than traditional privately-owned businesses. The authors directly attributed this to a co-op’s democratic decision-making process. It seems that when the workers are also the owners, their decisions are more likely to value longevity and sustainability over short-term payoffs that would weaken the co-op while only benefitting a few “at the top.”
Not only does research show that co-ops can out-perform private companies, but successful co-ops can rise from failed private businesses. The workers of a Vermont Gage Carwash in Los Angeles successfully converted it into a worker co-op in 2015 after the owner abandoned it (without paying their workers, of course). They claim to be “the world's first worker cooperative carwash” and are still in operation as of this article’s publishing six years later.
Co-ops and Unions: Comrades in Arms
So what happens when co-ops and unions collide? After all, they both sound pretty different from each other. As part of the broader labor movement, co-ops and unions are natural allies, but sometimes their relationship can be more direct.
As it turns out, The Vermont Gage Carwash is an interesting example for another reason: they successfully unionized before the owner gave up and ran (and yes, they also claim to be the world’s first unionized carwash, too). When that happened, United Steelworkers Local 675 acted to help their members reorganize the carwash into the unionized co-op that it is today.
If a co-op chooses to elect representative management (like the Vermont Gage Carwash) instead of following direct democracy, that co-op can also decide to unionize it’s non-representative members. Essentially this creates a situation where the elected managers negotiate with elected union representatives (selected from the co-op’s members). While this may sound a little complicated, it has a few benefits that can make it mutually beneficial.
The union can provide co-op members with access to more cost-effective benefits like healthcare and retirement plans. This model also more closely emulates a traditional company’s decision making structure, which some worker-owners may be more comfortable with.
Meanwhile, the union gains members and a broader pool of bargaining power. Which ultimately lets unions push for policy change at the state and federal level - something that's understandably out of reach of co-ops that tend to be smaller than 50 members.
What Sets Co-ops Apart?
Worker cooperatives give us a rare chance to demonstrate that with the right support, workers are not only capable of “calling the shots,” they’re often better at it then so-called “high-powered” executives.
Co-ops achieve their success by venerating the power of the average worker, not by exploiting it. Their success proves that a separate class of business rulers is unnecessary for good work to get done.