 George Cheney is an independent contractor working with RMFU Cooperative Development Center on cooperative literacy, co-op development, and training.
"... George draws upon wide experience in group facilitation, analyzing communication patterns in workplaces, the crafting of key organizational documents such as mission statements, and in working through complex problems. Together with colleagues in the US, Japan, Canada, and Spain, he is working on a book about how employee ownership and co-ops in general can play bigger roles in societies of the future. As George sees it, “Out of the current crises—the pandemic, the economic crash, racial injustice, and environmental urgency--we are seeing more openness to experimenting with different ways to do business and work together. That gives me hope.” Read More About George Here.
WORKER COOPERATIVES: THE DEMOCRATIC BUSINESS OPTION HIDDEN IN PLAIN SIGHT
We knew this business—or corporate group—was different on our first day there for a six-month stay in 1994. Right after we entered the training center of this collection of worker co-ops with over 100,000 worker owners, my wife Sally and I were introduced to everyone who worked in that facility, including custodial staff, delivery persons, the cook and kitchen assistants. All of them, along with the administrative and technical staff, were on equal footing in terms of job security—and worker dignity--as members of the Otalora training co-op.
This was my introduction to worker cooperatives—through spending many months and later many more visits—reading histories, observing work and decision making, attending meetings, interviewing hundreds of people in their shops and offices in addition to on-the-street informal conversations. The Mondragon Cooperative Group, in the Basque Country, Spain, remains the largest single worker-owned corporation in the world, although it is a much larger network of cooperatives in the Emilia-Romagna region of northern Italy. Today we find worker cooperatives in well over 100 nations of the world.
Mondragon is worth mentioning here for another reason: The case has inspired the development of many other worker co-ops, including in the UK, Canada, and the US but also in Latin America, Asia, and Africa. Worker cooperatives can be found in a wide range of fields and industries, from bicycle and machine shops to accounting and marketing firms, to media enterprises and book shops, to food systems and health care, to engineering and technology.
Despite the great success of worker co-ops like Namaste Solar, in Boulder, Equal Exchange in Massachusetts and elsewhere, and Cooperative Home Care Associates in the Bronx, worker co-ops are an option for business start-ups and conversions hidden in plain sight. This is in part because of persistent stereotypes—especially that democracy can’t work for workers.
Worker cooperatives are not the only form of employee-owned business, of course, but they are distinctive in terms of the degree to which they privilege economic control and governance by worker-members. Employee-Stock Ownerships Plans (ESOPs) involve a certain percentage of equity (or the worth of the firm) to be held by employees and may also involve a strong system of employee participation.
Shared equity in practice means that worker-members make modest investments—as a stake-- in the co-op which can be in the form of payroll deduction. Worker-members receive wages or a salary. Importantly, the wage differential is kept fairly narrow. This means, for example, that the highest paid member may not make more than “X” times the amount of the lowest paid member, in contrast with there being no limits in most conventional firms. Patronage dividends are accrued in the member’s account from a significant portion of profits. By statute, worker co-ops also reinvest designated amounts in the firm itself and devote a specified amount to community projects. Formulas vary, but these are the typical ways profits are utilized.
In a worker cooperative, the ultimate decision-making body is the committee of the whole, regardless of the size of a worker co-op. Of course, as we move from a small one to a larger one, then committees or councils become essential. The beauty of the Mondragon system in terms of structure is its dual or “bicameral” nature. Each co-op has both an elected president and a selected manager. Beyond that, though, there are committees that help to create checks and balances. This balanced model has been adapted by many other co-ops, even when they are small in size. In healthy co-ops, participation in any committees—whether standing (for key functions like finance, production, etc.) is high.
Worker co-ops are also known for their commitments to maintaining employment. The International Labour Organization (ILO) found that worker cooperatives were less likely to lay off worker-members in the global economic crisis that began in 2008 than their conventional business counterparts. One reason for this is that major decisions in a worker co-op are made by the entire collective, thus allowing all worker members to weigh in ideas such as voluntary sacrifices in pay or dividends for a year or two in the interest of preserving employment for everybody.
As with any new business, a worker co-op start-up needs to have a sound market and feasibility studies, effective leadership and other key skills represented in the founding workforce, sufficient capital for up-front costs and investments, and a realistic and motivating business plan. Worker cooperatives also place a huge emphasis on mission and core values. A vibrant system of communication, with the transparency sharing of key information, is also important.
A major measure of success for a worker co-op is the development and maintenance of a thriving “ownership culture”—which means worker-members all take seriously their stake in the firm and this affects how they approach their jobs and daily activities.
The full extent of what an ownership culture can mean is captured well in the ten core principles of the Mondragon cooperatives:
Open Admission: Meaning no discrimination in hiring
Democratic Organization: One worker, one vote
Sovereignty of Labor: Worker-members are in charge
Participation in Management: Systems for information, consultation, and negotiation
Instrumental and Subordinate Nature of Capital: Jobs and dignified work are privileged
Wage Solidarity: Maintaining a narrow pay scale
Intercooperation: Or cooperation among cooperatives
Universality: In solidarity with other efforts at economic and workplace democracy
Social Transformation
Education: To promote cooperative principles
While there isn’t space here to go into depth on these, it’s important to note how the commitments of the co-ops are both “internal”—to the employee-owners—and to the larger community. The commitment to education, then, goes far beyond supporting the further development of worker-owners, although it includes a comprehensive training program for all worker-members.
Effective worker co-ops integrate several types of training into their work experience. Technical training is assumed but obviously important. Financial training for all becomes important both for transparency and effective participation. A critical piece is ongoing organizational training, especially in terms of values and decision making. In other words, many worker co-ops conduct training in the democratic process itself. Also, some worker co-ops stress the advantages of having everyone complete some kind of training in conflict management.
Today there are many opportunities to transition individual proprietorships or partnerships into co-ops. With the tidal wave of Baby Boomer retirements, many business owners are looking for ways to maintain their firms and the firms’ contributions to local communities. Converting to a worker co-op can help ensure continuity of employment and afford tax benefits as the owner sells her or his business to employees. Conversions are becoming much more common, such that employee-ownership centers in Vermont, Ohio, and Colorado (among other co-op development centers) now devote a great deal of their outreach and workshops to assist with retirement planning and co-op conversions.
The benefits of worker co-ops are summarized below in a list adapted from Co-op Cincy, a network of worker-owned co-ops in the Cincinnati area that also includes significant involvement by labor unions:
1. Fostering meaningful work in positive work climates.
2. Enhancing skills for worker-owners; cultivating leadership.
3. Providing reliable, professional services and products to clients/customers.
4. Building solidarity, both internally and with clients and partners.
5. Strengthening community and regional economic interdependence and joint asset building.
6. Responding to crises and pressing needs: social, economic, and environmental.
7. Being part of a larger eco-system of co-ops, socially inspired private enterprises and non-profits.
A brief but vivid introduction to worker co-ops can be seen in the 12-minute documentary, “Arizmendi’s Secret”. A more in-depth account of Mondragon and numerous worker co-ops in the US can be found in the longer documentary “Shift Change”.
To learn more about worker cooperative start ups and conversions, you’ll find many resources from the US Federation of Worker Co-ops. For broader discussions and examples of employee ownership, consult National Center for Employee Ownership. If you’re interested in exploring worker and other cooperative possibilities in the states of Colorado, New Mexico, and Wyoming, please contact Rocky Mountain Farmers Union Cooperative Development Center at co-op.center@co-ops.org.
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Worker Cooperatives and The Mobile Farm and Food Workforce
In this still relatively new century, labor rights in the United States—the right to a living wage, the right to safe working conditions, the right to fair-labor practices, the right to work-life balance, the right to professional development—are not ubiquitous. Profit-driven corporations continue to create divides between haves and have nots. Profits are not realized in a vacuum—in order to generate profits, a company must leverage intellectual capital, ecological capital (i.e., natural resources), and human resources capital, all visible and quantifiable elements within a supply chain.
A time-tested approach to establishing economic workplace equity is the cooperative model. According to the Democracy at Work Institute (DAWI) and the U.S. Federation of Worker Cooperatives (USFWC), worker-owned cooperatives have seen a 35.7 percent net growth since 2013.
In 2017, Rocky Mountain Farmers Union Cooperative Development Center (RMFU), Veterans to Farmers, the Good Food Collective, and UpRoot Colorado (UpRoot) partnered to pilot a mobile farm workforce project, designed to provide supplemental, on-demand, and efficient labor to Colorado producers.
Now in its fourth year, the Farm & Food Mobile Workforce pilot has provided Colorado producers with extra hands that have supported local producers by completing a variety of on-farm tasks, including the harvest of more than 750,000 pounds of market-ready product with a market value of more than $2 million.
The question is answered with respect to whether the mobile workforce idea has merit and value.
To answer the question of Now what?, RMFU and UpRoot held an informational webinar in April to suss out community interest in evolving the pilot into a worker-owned agricultural services cooperative that will also support local processing facilities. The result is a new steering committee and a list of both potential worker-owners and clients.
If you’re interested in following along with the progress of this potential new cooperative, or if you’re interested in becoming a worker-owner of a client, please contact David Laskarzewski at dave@uprootcolorado.org.
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Meet RMFU Co-op Development Center's
Specialists Nancy Van Burgel and Connie Falk
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 Nancy Van Burgel, it was through my friendship with Bill Stevenson that I became more acquainted with the RMFU Cooperative Development Center. His passion for co-ops rubbed off on me.
My previous experience was as a senior level corporate attorney working primarily in the Energy sector. I worked with all levels of the company from field personnel to executive management. My practice included managing a large caseload, directing outside counsel and experts, and leading corporate teams focused on everyday business decisions and regulatory compliance issues nationwide.
As an RMFU member for several years, I continue to learn about the many programs RMFU sponsors that focus on the issues impacting farmers and ranchers. Leaving the corporate world behind, I am thankful that I can now turn my focus to those things about which I am more passionate, namely advocating for local agriculture. I am looking forward to being part of the RMFU Cooperative Development team and contributing in ways that help communities of farmers and ranchers create legal cooperatives leading to securing larger markets for their products and services and reducing barriers for those communities.
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 Dr. Connie Falk joined the RMFU Cooperative Development Center as a consultant in May, bringing with her a background in agricultural economics and business. She retired from New Mexico State University in 2013, after 25 years teaching and conducting research in sustainable and organic agriculture, crop diversification, small farm economics, season extension technologies, and food system issues.
She has a BA degree in English, an MBA, and a PhD in agricultural economics, all from Oklahoma State University. Prior to obtaining her doctorate, she served in the Peace Corps in Honduras, 1982-85, where she worked as a small business advisor, helping groups of seamstresses, shoemakers, furniture makers, potters, weavers, and peanut growers develop new projects, obtain financing, and analyze their businesses.
Dr. Falk first worked with RMFU in the mid-1990s, conducting feasibility and marketing studies for two meat cooperative efforts, Ranchers’ Choice, and the Cattlemen’s Texas Longhorn Registry. Over the years she has worked on financial feasibility studies as a consultant or supervised master’s students’ thesis projects for groups producing and processing goat cheese, mixed vegetables, apples, potatoes, onions, lamb, pork, turkey, tilapia and catfish, wolf-friendly beef, and wool bedding. She helped a group of beekeepers in Nigeria obtain specialized packing equipment to market consumer-size honey packets through the Farmer-to-Farmer program. At NMSU, Dr. Falk taught a class she developed on the fundamentals of financial statements and financial feasibility modeling, for 13 years. She also developed and co-taught an organic production class that used the Community Supported Agriculture model. Read more about Dr. Falk's HERE.
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Democracy & Equity. Self-Help & Solidarity. Concern for Community.
Since 1844, co-operative enterprise been guided by the principles established by the Rochdale Pioneers in the North of England. Well, yes — but not quite. In founding their co-op, the Pioneers were building on many experiments that came before them. And while their model spread rapidly, it was not until 1937 that the International Co-operative Alliance (ICA) distilled their rules into a set of formal guidelines for a diverse, cross-sector movement serving communities around the world. Updated over time in response to changing social, political and economic conditions, these principles were last updated in 1995. In this webinar, we will discuss the evolution of the Co-operative Identity, how co-ops have worked to be responsive to the needs of their time, and how these values and principles will be at the center of the 33rd World Co-operative Congress coming up in December.
Join Erbin Crowell, Executive Director of the Neighboring Food Co-op Association and former Chair of National Cooperative Business Association, and special guest Martin Lowery, U.S. Representative to the Board of the International Co-operative Alliance (ICA) and Executive Vice President, Emeritus, of the National Rural Electric Cooperative Association (NRECA), for this important conversation.
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