Note: this is a guest posting from Jim Anderson of the OEOC and George Cheney of the University of Texas.
WORKER COOPERATIVES OFFER ONE KEY TO ECONOMIC REVIVAL
Jim Anderson and George Cheney
The Great Recession has taken a huge toll at all levels of society. We have little time to debate the causes. We need pragmatic solutions for economic development, job creation, collective wealth building and bold, creative leaders who can build momentum in our communities. Intensive employee involvement within a culture of success makes enterprises work. Employee-owned businesses, organized as cooperatives, offer great potential for serious consideration across the country. Yet, there are a number of myths that persist regarding cooperatives. We discuss these myths and offer our ideas on how to get beyond them.
Myth #1: Worker cooperatives are a form of socialism. Fact: At a time when all citizens are concerned with job creation, it’s important to stress that co-ops are not centralized programs but rather grassroots economic development initiatives. Worker cooperatives are capitalist enterprises. However, their equity or worth is not publicly traded in the stock market; nor are these firms subject to the whims of distant owners. Worker co-ops distribute ownership among members, who are all invested equally in the company and its successes. Employees are also nearby residents and consumers; they build on local pride through being owners in their workplace and they keep earnings in the community, creating a multiplier effect in the local economy.
Myth #2: Worker cooperatives are not-for-profit. Fact: Most worker coops are private for-profit firms. They need viable product or service niches and therefore must be profitable to survive. If there’s no margin, there’s no mission. At the same time, if there’s no mission, there’s no soul to the enterprise. Financial solvency is essential, but so is the thoughtful commitment to customers, stakeholders, and community.
Myth #3: Worker cooperatives do not have managers and other experts. Fact: Worker co-ops enlist various kinds of expertise while also encouraging worker-owners to develop their skills to advance in the company. Effective worker co-ops employ an array of professionals, including experienced managers, accountants, engineers, attorneys, marketers, and so forth, along with workers who are close to the basic products or services. Worker-owners have opportunities for advancement and leadership, and they also benefit from the company’s commitment to them.
Myth #4: Worker cooperatives suppress creativity and innovation. Fact: Worker cooperatives are all about entrepreneurship and innovation, while meeting community economic and social needs and growing toward the future. Beyond mere survival, worker cooperatives use a mix of individual and group incentives to encourage new ideas and their applications. The array of incentives actually makes worker cooperatives more resilient than many traditional firms in both good and bad economic scenarios.
Myth #5: Worker cooperatives cannot grow to have a big impact on community economic development. Fact: The cooperative economy focuses on small- and
medium-size business development, but many of these businesses grow through acquisitions, mergers, and strategic alliances. In fact, most large businesses began as smaller enterprises. Ultimately, through collaboration as well as competition, worker cooperatives can become stable parts of urban as well as rural economic mixes.
Myth #6: Worker cooperatives are short-term enterprises. Fact: Stakeholders in businesses, whether traditional or cooperatively owned, are committed to long-term success. Very few organizations of any kind, regardless of sector or industry, last more than a few decades. Some worker cooperatives are large, well-established enterprises that have become part of the economic bedrock of their communities and regions. There are sound examples of this in the United States and Canada as well as in many other countries around the world.
Myth #7: Worker cooperatives are feasible only for a few kinds of business. Fact: There are thriving worker cooperatives in U.S. businesses ranging from agriculture and food and beverage services to clothing and household appliance manufacturing to law and journalism to transportation to high tech and alternative energy development. The worker-cooperative model is not one-size fits all but rather one that can be adapted to specific business, sector, and community needs.
In sum, the worker cooperative is a flexible and well-tested model that should be part of the tool kit of inventive responses by policy makers and business leaders to today’s community and global economic needs. Worker co-ops can be designed to take advantage of market niches, fit community needs, and build stable, prosperous, and just enterprises.
For further information, please consult the following resources:
Cooperative Curriculum http://cooperative-curriculum.wikispaces.com/
Industrial Cooperatives Association (ICA Group) http://www.ica-group.org/
Ohio Employee Ownership Center http://www.oeockent.org
Mondragón Cooperative Corporation http://www.mondragon-corporation.com/ENG.aspx
National Cooperative Business Association http://www.ncba.coop
Third Coast Workers for Cooperation http://www.thirdcoastworkers.coop
US Federation of Worker Cooperatives http://www.usworker.coop
Jim Anderson, Program Coordinator, Ohio Employee Ownership Center, Kent State University, Kent, Ohio 44242. Tel.: 330-672-0999 (o); 330-265-4109 (c). Jander77@kent.edu
George Cheney, Professor, Department of Communication Studies, The University of Texas at Austin, 1 University Station A1105, Austin, TX 78712. George.firstname.lastname@example.org