Worker Co-ops


are around 300 worker-owned businesses in the United States, totaling
about 10,000 workers, according to recent figures from the Grassroots
Economic Organizing newsletter, the movement’s major organ.
CICOPA, the branch of the International Cooperative Association
that promotes worker ownership (which is known by its French acronym)
says some element of worker ownership reaches about 50 million people

worker-owned businesses represent only a tiny slice of the United
States’ economy. But that, democratic workplace advocates maintain,
can change. Leaders from Midwest worker cooperatives gathered mid-April
2003 at the University of Wisconsin’s Madison campus to talk
through plans for a national worker cooperative federation and strategies
to gain prominence on national and regional stages. The Madison
meeting followed conferences on both coasts last year, the first
gatherings of worker co-ops in decades.  

good share of the weekend conference in Madison, though, was devoted
to discussions of basic business finances and mechanisms for handling
interpersonal conflict—the nuts-and-bolts sharing that shows
how far the concept of worker cooperatives and the alternative economy
they represent has come and how far it has to go.

“Those of us who recognize the economy doesn’t work for
the majority of people need to have a viable alternative that’s
not theoretical,” says Lance Haver of Phoenix Foods, an urban
Philadelphia basil farm transitioning to worker control. “We’re
very aware that we’re the only alternative to the Enron model
that has any type of credibility right now.” 



CICOPA’s international headquarters in Geneva, there is a gaping
hole in North America on the map of worker-owner federations around
the world. Bruno Roelants, CICOPA’s representative at the Madison
conference, would like to see that changed. Lobbying efforts on
behalf of worker cooperatives in international bodies would be taken
more seriously, he says, if the movement showed strength within
the world’s superpower. Participants approved sending representatives
to the national conference next summer, where the structure and
initial tasks of the U.S. federation of worker cooperatives will
be planned. Its supporters see marshaling the political power of
worker-owners in the United States, and, like a trade group, offering
resources and a public face for the movement. 

the appearance of consensus, a major battle over the scope of the
national federation brewed under the surface. Should it focus on
purely worker co-op issues or embrace a “big tent” approach
and broaden its membership beyond worker-controlled firms? 

up the federation to businesses with minority worker control met
resistance. The principal groups the federation could partner with
are Employee Stock Ownership Plans, offered by many corporations
as a loyalty enhancing incentive over the past decade. The stock
sharing plans made headlines recently because right-wing commentators
blamed United Airlines’ bankruptcy on the corporation’s
ESOP, even though portions of the company—including flight
attendants—didn’t participate. ESOPs have been criticized
by democratic workplace activists because very few are designed
for actual worker control—most operate by doling out shares
based on compensation, allowing managers to maintain significant

the nascent federation wants to hold itself out to conscientious
members of the public as representing non-exploitative enterprises,
then it might want to admit only democratic workplaces,” says
Bob Stone, an editorial board member of the GEO newsletter. Leaders
in the worker co-op community downplay the issue, saying it makes
sense for the national federation to restrict membership to worker-
owned businesses, but welcome linkages with other groups pushing
for an equitable society. 

ownership is a very dicey strategy for social change unless people
are aware of the nature of the system in which they’re operating,”
says Charles Derber, a Boston College sociology professor who writes
on the cooperative movement. “They can simply become one more
player in the market economy, very much constrained by the market
system, subject to the same pressures of competition and profit.
They’re too micro a set of changes on their own, beyond the
well-being of their workers, to create the larger change that will
be meaningful.” 

cooperative activists seem to hear that concern, but whether it
becomes an integral part of the federation remains an open question.
“I’m working toward a post-capitalistic future, but it’s
not going to happen without social organizing as well as co-op organizing,”
says Tim Huet, part of the Arizmendi Development & Support Cooperative,
which helps establish worker-owned bakeries in the San Francisco
Bay Area. “People in power would not just allow worker co-ops
to slowly grow and take over the economy. We’ve got to support
other organizing.” 

Elephant In The Corner 


the moment, though, co-ops are out of reach for many people. The
apparent inability of worker co-ops to impact low-income and non-white
communities became the topic of heated discussions at the Madison
workshops. Depending on scale and ambition, it takes tens or hundreds
of thousands of dollars to start a small business and banks are
not tripping over each other to line up behind radical bookstores
and worker-run bikeshops. 

course, larger firms and worker buy-outs of failing businesses require
even more massive capital infusions, the source of which is unclear.
Could “socially responsible” investment firms and pension
funds, worker held, at least in theory, be convinced to leverage
their money? 

is a red herring in the worker co-op community, Huet says. “Banks
will give you money if you can show them you can pay them back.
The real concern is building technical capacity so the co-op survives.” 

most worker co-ops start with workers paying thousands of their
own dollars in an initial “membership fee” to get the
new business running. But if you don’t have a fat bank account,
inherited wealth, or friends with MBAs, worker co-ops don’t
look so good. Indeed, Jane and Joe Cooperative Worker are “overly
educated white people who are downwardly mobile,” as Lance
Haver put it. “It shouldn’t surprise anyone. We don’t
make it easy for people of color. You need to have the equivalent
of a degree from Wharton business school to run these businesses.
Why should we be surprised if they don’t jump into it?” 

Brookline, Massachusetts -based ICA Group, a loan fund and consultant
for cooperatives, has built a strategy around increasing access
for minority populations. Concentrating in poor urban areas, it
funds start-ups familiar in the low-wage job market, such as home
health care and day labor/temp agencies that provide better wages
and some elements of worker control. Democratic workplace activists
are also hunting for a revolving loan fund to create new worker
co-ops, which could reduce the initial equity problems.  

A Label On It 


demand for goods produced in egalitarian workplaces could boost
the number of worker co-ops and Lance Haver has an idea how to make
it happen. Organic and fair trade activists put labels on their
goods and markets blossomed for their products. Haver thinks it
is time worker-owned businesses tapped into the labeling game. It
drives up demand and gives incentive to traditional firms to cede
some control to their workers. 

Chavez’s union grapes campaign in the late 1960s also succeeded
with labeling, thanks in large part to the huge activist effort
behind the label, says Jessica Gor- don Nembhard, an economist at
the University of Maryland-College Park and GEO board member. But
businesses with less than majority worker control could still have
their goods labeled, making it hard for consumers to differentiate
between worker-friendly firms and manipulative pretenders. Labeled
goods are typically more expensive, at times explicitly catering
to the Volvo set. These concerns don’t dissuade Haver. 

“Twenty years ago, if you would have said, ‘let’s
label organic food,’ people would have laughed at you,”
he says. Now organic food is a burgeoning $6.3 billion business,
up from $1.8 billion just 5 years ago. Organic food grew a bumper
crop of confusing labels and certifications, smoothed out by the
recent USDA label, whose requirements are set low enough to create
a major ruckus among food activists. 

if the worker-owned label started with less-than-savory businesses
attached, it could be improved over time, Haver says. A compromise
floated in some circles is to have the label list the percentage
of worker ownership. “Some people are anxious to get the (worker)
label moving soon,” Nembhard says. “It has potential,
but I’m more comfortable if it comes out of a national entity,
where issues and standards can be hashed out.” 

The Home Front 


Bay Area is home to the largest concentration of U.S. worker cooperatives
and also the nation’s best-organized cooperative community.
The Network of Bay Area Worker Co-operatives (NoBAWC)—the acronym
is pronounced “no boss”—has attracted about 55 member
co-ops Traditional businesses seek out No- BAWC for help converting
to worker control, enough of them that the network recruited “best
practices” experts to help them find insurance, lawyers, and
other essentials. A network of mutually supportive, like-minded
cohorts helps struggling co-ops and a 10 percent discount card for
members draws business. Thankfully, thinkers behind the national
federation plan to support and not supplant such successful local
networks by allowing co-ops to devote portions of their dues to
regional organizations. 

Madison Post Capitalist Business Association, created in February,
draws together nine worker co-ops into a sort of shadow Chamber
of Commerce. So far they have published a map of the association’s
members, and two—Union Cab Company and grocery cooperative
Mifflin Street Co-op—have pooled funds to start a bookstore. 

want to do something socially responsible, putting your money where
your values are,” says Valeria Benner, a worker- member at
Mifflin. “And having a socially just, ecologically responsible
way of doing things is very positive as a model for other businesses.” 

Madison’s association is not yet on the larger map, which speaks
to the weakness of some U.S. worker co-ops. They are small, often
fewer than 15 members. Some struggle—surviving only with volunteer
labor—and even in small lefty towns like Madison that should
be their natural habitat they can be ignored. “I don’t
know much about them, honestly,” says Robert Brennan, president
of the Greater Madison Chamber of Commerce. “Anybody that’s
doing the kind of work that improves the quality of life in Dane
County, we’re in favor of them.” 

people who want to do away with capitalism? “It isn’t
going to happen,” Brennan says. “To make a community work,
not one single element can force the others along with it”—evidently
missing the irony of modern capitalism’s grinding tendency
toward monoculture. “The American economic system has worked
a long ways and is the envy of the world. We’ll be here forever.”



war on Iraq proved an ugly truth about the worker-owner community’s
weakness as an organized political force. Debate raged over a national
email listserv —would issuing a statement alienate people,
especially customers? But with no national federation, there was
no unified response and a lot of confusion. Finally, several Bay
Area worker cooperatives signed a “no business as usual”
statement and shut down the day after the war started, as did a
few other scattered co-ops. As a political force, worker cooperatives
are only beginning to find their voice. Because they have been historically
linked to progressive causes, they may put off people hostile or
indifferent to the slate of causes that motivate the left. Tim Huet
does not like that argument. “I don’t think we’ve
alienated ourselves,” he says. “But I tend to the proposition
that it’s smart not to be drawn into divides over every international

cooperatives are inherently political, Huet says, because they train
people to be self-managing and give them greater confidence and
skills they can employ in social activism. “As we learn to
have more control over our worksite, we learn to have more control
over our government,” Haver says. 

cooperatives may be points of light in the darkness of antisocial
market behavior, but how long can they stay lit on their own? Derber,
the Boston College sociologist, says worker co-ops are easy to co-opt,
unless they stay close to social movements with concerns outside
their own. “It’s a little like what happened to labor
unions,” he says. “They developed relationships with managers
instead of maintaining relationships with social movements. Without
explicitly embracing a social agenda, cooperatives will be assimilated
into the larger system.” 

experience of the plywood worker cooperatives in the Northwest provides
a cautionary example. After decades of success, the worker-owners
sold their stakes to multinational corporations—making themselves
rich, but dooming the next generation of timber workers, who could
not afford to buy out the old members, to punching a time clock. 



think we’re on a wave right now and it’d be nice to ride
that wave,” Jessica Nembhard says. Activity is building around
worker ownership and perhaps the biggest question is how to channel
that energy into a successful economic and political force. 

manufacturing left the United States over the last two decades,
democratic workplace advocates paid much attention to worker buy-outs
of failing factories and other large-scale efforts. Huet thinks
it is time to use the successful models worker cooperatives have
developed to grow and link thousands of small service-sector and
community-based businesses, instead of focusing on big industries.
At the same time, the national and regional federations should look
outward. “We can’t just realize we’ve gotten what
we want,” he says. “We’ve got to be concerned about
people who can’t get a job at all—and see ourselves as
part of the larger labor movement.” 

first, Nembhard says, people need to know that worker ownership
can work. “I don’t think we can get far off the margins
unless peoples’ understanding of businesses change,” Nembhard
says. “We think only profit and greed motivate people. We need
to change what people understand is possible.” 


Gaus is a freelance journalist based in Seattle.