The democratic workplace

Can employees be in full control of their enterprises? Amy Hall explores the possibilities and tensions of worker co-operatives.

Launched in May 2020, the worker-members of ChiFresh Kitchen have been busy throughout the Covid-19 pandemic cooking up healthy, culturally appropriate food for their Chicago community. As well as providing emergency food aid, the co-op – which employs formerly incarcerated people – is also contracted to provide food for schools and social centres and makes several hundred meals a day. Credit: KAI BROWN

When the UK government announced in 2012 that it was shutting down 36 Remploy factories, which were dedicated to employing people with disabilities, it left hundreds of workers looking at an uncertain future.

In West Yorkshire, 12 former employees from the Leeds and Pontefract sites took matters into their own hands, pooling their £5,000 ($6,900) redundancy payments to set up a worker co-operative. Now, Enabled Works is a thriving packing, distribution and storage business run by 22 worker-members. Everyone has different responsibilities but gets the same hourly rate of pay.

‘People said that disabled people couldn’t run their own business,’ John Wormald, Enabled Works’ ethics and integration manager told Co-operatives UK. ‘We took that as a challenge. If you have disabilities life’s a challenge, so this was just another one.’

International co-operative body CICOPA estimates that around 11.5 million people are members of worker co-operatives across the globe, but it’s likely that this number is much higher due to the lack of consistent data. Members are simultaneously the collective owners, bosses and employees of their businesses, controlling resources, setting their own conditions and deciding what happens with any profits. And it seems that increasing workplace democracy pays off: evidence suggests that worker-controlled companies are also more productive than regular businesses.

Worker co-ops can be as small as two members, or as big as tens of thousands. Asiapro Multi-Purpose Co-operative in the Philippines was founded in 1999 by a group of 60 who wanted to provide decent, secure work for marginalized people – it now has around 65,000 members working across industries as broad as construction, IT, education and hotel management.

Worker-run companies like Asiapro and Enabled Works are one part of a much wider co-operative movement, which employs more than 12 per cent of working people worldwide. There are consumer co-ops (like the Co-operative Group in the UK) – producer co-ops or multistakeholder co-ops like New Internationalist, which is run day-to-day by our worker-members, but also has 4,600 reader-owners who can step in if we stray from our values. What all co-ops have in common is a mission to serve their member-owners – workers, customers, producers or the local community.

Workers’ choice

In a worker co-op, it’s up to the staff what happens with the fruits of their labour. If Apple were owned by its workers, it has been estimated that in 2014 its 98,000 employees could each have received $403,000 in dividends on top of their salaries. Or they might prefer to reinvest profits into the business, invest them in the local community or donate to aligned causes. In a co-operative, the workers are in the driving seat; each has equal voting rights and the power within the business is weighted towards those who do the work instead of distant shareholders.

Being able to secure sufficient income remains important, as Diana Dovgan, secretary general of CICOPA, explains: ‘Of course profit is important for co-ops because with profit you pay the wages and make your enterprise function, but it’s what you do with the profits that makes you different from non-co-op enterprises.’

When it comes to salaries, flat-pay structures are commonplace or, if not, a cap on the salary difference between the lowest- and highest-paid staff. Workers can also decide to introduce their own hierarchies of management or employ people outside of the co-operative membership.

Pretty much everybody coming into a co-op has never been in one before and needs to learn to have trust in their fellow workers

Although worker co-operatives are still uncommon in some parts of the world, they are not a new phenomenon. Humans have always survived through co-operation, collectivizing resources and sharing any surplus as a way to survive. But the roots of the co-operative model we’re familiar with today – at least in the West – can be found in the industrial revolution as workers organized to improve their lot. The birthplace of the modern co-operative movement is widely regarded as Rochdale in the northwest of England where, in 1844, a group of artisans called the Rochdale Society of Equitable Pioneers opened a shop to sell food affordable food to its customer-members.

Co-operatives have also played a part in the story of the British Empire. They were used by anti-colonial movements, including by the Uganda African Farmers Union, as a way to challenge the colonial economy and pool the resources of farmers to take control of the cotton and coffee markets.

But the model was also exploited by the British from the 19th century onwards. Colonial authorities heavily promoted co-operatives as an economic tool in India and in several countries in Africa. As historian Aaron Windel has documented, these co-operatives were often set-up with deliberately weak democratic structures weighted in favour of colonial administrators and against collective resistance: ‘Community development of the 20th century is this insistence that development has to come from the grassroots, so here’s the co-operative to teach people how to do this… The British meanwhile are harvesting… commodities and repatriating them to Britain for their own purposes.’

As UK-based co-operative organizer Cath Muller explains: ‘They were promoted as a way for people to “do better” under capitalism.’

The C-word

Co-operatives and capitalism have a chequered relationship; as Muller puts it: ‘We’re trying to operate counter-cultural organizations within capitalism.’ While workers might have better jobs as part of co-operatives, there may not be much scope for co-ops to change much else about society. A worker co-op can refuse to devalue people’s labour based on their job title and offer an alternative way of doing things in a world where jobs are often focused on individual success and institutionalized workplace hierarchies. But co-operatives in themselves are not going to bring about the kind of wider transformative change that their members might want, just by virtue of existing.

Muller, who is part of Radical Routes – a network of UK co-ops for whom social change is an explicit aim – first came to co-operatives through environmental activism: ‘There was a moment when I realized that some co-ops are just an end in themselves and that’s fine. They’re just a nicer way of doing capitalism… in fact that’s what most co-ops are.’

Described by socialist economist Rosa Luxemburg as ‘small units of socialized production within capitalist exchange’, co-operatives are still operating within a capitalist economic system and are subject to the rules of the market.

For example, a fruit-and-veg co-op might have excellent conditions for its workers and suppliers, and sell food at a reasonable price to its neighbourhood. If another fruit-and-veg shop with lower prices and more variety were to open a few doors down, the co-op might struggle to bring in enough customers to maintain income and pay bills.

When other businesses hit financial trouble, bosses and shareholders can shift the risk onto workers, often by laying them off. When a worker co-operative is struggling, the members have to decide for themselves how they’re going to keep the business going (or if they’re going to shut it down). This makes worker co-ops better at preserving jobs during financial crises but does not insulate them from cuts altogether. Workers can also exploit themselves: work without pay, do long hours or forgo any of their employee benefits.

One thing co-operatives can do well is provide some kind of challenge to individualistic organizing. Good communication, effective collective decision-making and an ability to compromise with others are essential. ‘There’s just something about a solidaric way of organizing,’ says Muller. ‘When the shit hits the fan and everybody’s there together, you’re in a position where you still somehow have to meet everybody’s needs. You have to decide together how to get through it and give people the agency to come to their own compromises.’

Trust in workers

Despite their limitations, being a member of a co-op is still incredibly different from working in a more hierarchical or less democratic business and, as Muller explains, this can involve a mindset shift: ‘The idea that you could have agency is quite hard to fathom for a lot of people. You’re used to either being the boss or being bossed.

‘Pretty much everybody coming into a co-op has never been in one before and needs to learn how to behave, think and prioritize differently. To have trust in their fellow workers. It takes a while for people to let go of fears and self-defences.’

For Dovgan, worker co-operatives have a lot to teach us about the wider world of employment, including how workers are best placed to know what’s best for them, as well as their businesses. ‘There’s a lot of mistrust about workers,’ she says. ‘People think that they are just interested in doing their jobs, getting paid and that’s it.

‘What worker co-ops teach us is, yes, it’s possible [for workers to run their business]. The cleaning person in a co-op can be the owner and take part in the decision-making process, together with the engineer.

Back at West Yorkshire’s Enabled Works, Wormald echoes this sentiment: ‘We work with each other’s strengths and cover each other’s weaknesses: the pieces of the puzzle need to fit together – and everyone has a contribution to make.’