Forum Post: How Worker-Owned Companies Work

How Worker-Owned Companies Work

Saturday, 30 March 2013 10:03 By Theresa Riley, Moyers & Company | Interview and Video

http://truth-out.org/news/item/15425-how-worker-owned-companies-work

Economist Richard Wolff is a proponent of democracy at work: an alternative capitalism that thrives on workers directing their own workplaces. In the documentary film Shift Change, producers Mark Dworkin and Melissa Young tell the stories of successful cooperative businesses from Spain to San Francisco. We caught up with Dworkin and Young to find out what makes cooperative businesses work.

Theresa Riley: What drew you to this topic as filmmakers? Why did you want to make this film?

Mark Dworkin and Melissa Young: As filmmakers we don’t just expose problems. We want to help people find solutions. In 2002 we were in Argentina at the height of their economic crisis, and in hundreds of workplaces which had closed, workers took over the company, went back to work, and made a go of it. These examples made quite an impression on us, and we featured their stories in two films: Argentina — Hope in Hard Times and Argentina Turning Around. A friend who saw the Argentina documentaries suggested that we learn more about the Mondragon cooperatives in the Basque Country of Spain. When we did, we were moved and inspired by this successful model of worker ownership and its potential to change the culture of work — not just in Spain but around the world. Our investigations revealed that there are hundreds of thriving worker cooperatives that promote economic democracy right here in North America, but they are little known.

Riley: How many businesses in America are worker-owned?

Dworkin and Young: Employee ownership in the U.S. is much more widespread than usually understood, with at least 11,000 such businesses in operation. Many are Employee Stock Ownership Plans or ESOPs, where employees own part or all of the company. Introduced under President Nixon, this is one way for private companies to transition to employee ownership. ESOPs may or may not be democratic and participatory places to work. Worker cooperatives are both owned and managed by their workers — one worker, one vote. According to the U.S. Federation of Worker Cooperatives, currently there are about 400 worker cooperatives in the U.S. They operate many types of businesses, mainly services, and are growing especially among Latino immigrants and in working class communities.

Riley: Most of the businesses you visited in the film seemed to have weathered the economic downturn of recent years. But have some co-ops failed? How do privately-owned small businesses and worker-owned businesses compare? Do they fail less often?

Dworkin and Young: One of the challenges faced by cooperative businesses is that they have to survive in the larger economic system, over which they have little control. Worker co-ops in Mondragon and in the U.S. have done better than other similar sized businesses in the current economic crisis. When sales and profits are down, worker owners don’t just close the doors. People take a hard look and try to figure out what they can do to make things better – such as adding new products or finding ways to improve efficiency and productivity. At any given time some co-ops are doing better than others, depending on the industry in which they operate. So in Mondragon each year co-ops that are profitable pay into a “rainy day fund,” and co-ops that are going through hard times are able to withdraw funds to help them out. In co-ops where business is slow, members can often find temporary work in co-ops that are doing better. And since workers own and manage the company, they may agree to reduce their pay on a temporary basis until business picks up again. That way nobody has to lose their job. Cooperative networks that function in a similar way are just beginning in the U.S.