By By Victoria N. Alexander Mar 26, 2015 in Politics A worker-owned business that gives workers a share of the profits and a say in how the company is run is better than a union, better than right-to-work legislation. A hybrid of socialism and capitalism, a workers' co-op offers the best of both and none of the worst. A cooperative corporation is a for-profit company, owned by and run by the workers. In this type of business, each individual, from production worker to top management, gets one vote in major decision-making processes. Co-operative corporations can differ in terms of how a “major decision,” one worthy of group vote, is defined, but some kind of democratic process is at the heart of any cooperative corporation. Co-ops are becoming more popular in this world of economic inequality. As Shaila Dewan If we study the example of one of the largest and oldest cooperatives in existence, Mondragón Cooperative Corporation (MCC) in Spain, we see that a cooperative structure can indeed be an extremely successful way of providing goods and services profitably. Mondragón co-ops have turned a formerly depressed area of Spain into a thriving community, producing, among other things, computer chips, high-tech machinery, and large appliances. As with Mondragón, most cooperative corporations tend to be invested in a particular locality. They are not inclined to outsource or relocate. They tend to favor sustainable business practices that protect the local community and environment, which is, after all, home to the worker-owners. Both entry-level and management workers in co-operatives tend to get equitable pay, eliminating the need for any kind of government-set minimum wage. Workers vote to implement procedures and practices that both protect themselves as individuals and protect the economic viability of the business that provides their income. Co-ops tend to create long-term and stable jobs with better working conditions and better pay, especially for jobs that are typically low-wage. Co-op managers tend to come from the rank and file, working through various departments, training on the way up, earning salaries that are commensurate with their experience. They may earn ten times that of an entry-level person in the company, but not one hundred times or more, as in some traditional corporations. Co-ops probably will not make their owners very, very rich, but they may make them relatively happy, secure, and self-respecting. When corporations are worker-owned and run, there is little need for outside regulation—other than the laws that govern the population generally, laws against theft, abuse, neglect and fraud. Top-down government regulation, with its cumbersome bureaucracies and lack of flexibility, cannot be as effective or as fair and adaptable as bottom-up regulation within a corporation itself. Co-ops are more transparent, since they have to keep the whole company informed on affairs. If a cooperative corporation is negligent and causes harm to its consumers or its community, all the worker-owners share responsibility for reparations. Negligence is not as likely to occur in a corporation whose operations are openly discussed and decided upon by a large group of people. Furthermore, top-down regulation—whether from CEOs, union bosses, or legislation—is more prone to corrupting influence. And top-down regulation hasn’t worked. Good union jobs have been outsourced and minimum wage is pitifully low. Both crony capitalism and unionization tend to concentrate power at the top. Capitalism needs more capitalists If anti-capitalists aren’t careful, they may find themselves free of corporate control, but under the rule of the same old masters with new names, which is what happened with the Soviet Union. More government control does not lead to greater democracy; it leads to an increase in oligarchical control. The problem with capitalism is really just that there aren’t enough capitalists in the system. If more workers were also owners, capitalism would work better and power would be distributed among more people. The 2012 documentary The response to "Shift Change" has been overwhelmingly positive, and we get notified often about people who are inspired to start a coop after watching our film, as well as cities considering following the Cleveland example after seeing "Shift Change." The documentary So why aren’t there more co-ops? The opposing forces of capital and labor enable each other. In the United States, both groups depend upon the existence of the other to justify the Republican and Democrat political machines behind them. To resolve the tensions between capital and labor would negate the raison d'etre of both parties. If labor unions are seen as a scary threat, Republicans get more donations and votes. If capitalists are seen as ruthless money masters, Democrats get more donations and votes. Neither party would survive without the other. In the U.S. there are only several hundred cooperative companies. Little discussion about co-operative corporations can be found in the mainstream discourse, either positive or negative. The belligerent voices of capital and labor drown out the more sensible voice of co-operation. Only the co-operative approach truly embraces the actual ideals that the Republican and Democratic parties pretend to represent. Espousing free market capitalism, co-operatives encourage the worker-owners to strive harder for efficiency, higher quality and profitability so that their company competes well in the marketplace. Embracing labor union principles, co-operatives allow workers to organize and negotiate (directly with each other) for higher workplace standards, reasonable hours and fair pay. Whereas traditional capitalism and unionization concentrate power among the few, the co-operative approach decentralizes power and thereby discourages corruption. Cooperative corporations may not be suited to all types of industries. Not all workers want to be part owners; there will also be a place for wage workers. But there is a need for a greater number of worker co-ops in our society if only because they provide greater stability in economic downturns. If the economy continues to decline, and more companies fail, laid-off workers should examine the option of continuing the business as its owners. Cooperative corporations are typically formed when a corporation goes bankrupt, and the employees, who don’t want to lose their only source of income, pool their capital and/or take out a loan to buy the failing company. In coming years if more people find themselves unemployed, they may want to think about networking with other unemployed people in order to use their collective sweat equity to start up new businesses. Cooperative corporations also tend to spring up where little or no capital is available, but labor is. Movie production is a type of business that lends itself to the co-operative corporation model, as are agriculture and local food production, high-quality artisan products, repair service industries, and cleaning services. Changing our ideas about how businesses can be structured, would, I believe, be a good first step in the direction of improved society. While actually increasing the number of cooperative corporations might not be on the horizon for decades, for the time being we might put an end to useless debate between capital and labor—because it’s getting us nowhere—and start talking about co-operation instead. Earlier this month Wisconsin became the 25th state in the U.S. to pass “right to work” legislation, which allows workers in unionized companies to avoid paying membership dues while still benefiting from union negotiations, and this, according to Think Progress, will weaken the power of unions. Forbes reports that unions hit a 97-year low in 2013. Meanwhile last Saturday , hundreds of fast-food service workers in Chicago marched from a McDonalds to a Kroger-owned grocery called Food 4 Less, where non-union employees make $8.25 per hour. Although minimum wage will increase to $13 an hour by 2019, the protesters demand a living wage of $15.00 per hour now. A much larger protest is scheduled in Chicago on April 15th, as disempowered workers struggle to find a solution to the age-old problem of labor versus capital.A hybrid of socialism and capitalism, a workers' co-op offers the best of both and none of the worst. A cooperative corporation is a for-profit company, owned by and run by the workers. In this type of business, each individual, from production worker to top management, gets one vote in major decision-making processes. Co-operative corporations can differ in terms of how a “major decision,” one worthy of group vote, is defined, but some kind of democratic process is at the heart of any cooperative corporation.Co-ops are becoming more popular in this world of economic inequality. As Shaila Dewan reports in her recent New York Time Magazine article, "Who Needs a Boss?" a worker at a co-operative bakery earns $24 an hour (twice the average wage for bakers), receives benefits and has flexible hours.If we study the example of one of the largest and oldest cooperatives in existence, Mondragón Cooperative Corporation (MCC) in Spain, we see that a cooperative structure can indeed be an extremely successful way of providing goods and services profitably. Mondragón co-ops have turned a formerly depressed area of Spain into a thriving community, producing, among other things, computer chips, high-tech machinery, and large appliances.As with Mondragón, most cooperative corporations tend to be invested in a particular locality. They are not inclined to outsource or relocate. They tend to favor sustainable business practices that protect the local community and environment, which is, after all, home to the worker-owners. Both entry-level and management workers in co-operatives tend to get equitable pay, eliminating the need for any kind of government-set minimum wage. Workers vote to implement procedures and practices that both protect themselves as individuals and protect the economic viability of the business that provides their income. Co-ops tend to create long-term and stable jobs with better working conditions and better pay, especially for jobs that are typically low-wage.Co-op managers tend to come from the rank and file, working through various departments, training on the way up, earning salaries that are commensurate with their experience. They may earn ten times that of an entry-level person in the company, but not one hundred times or more, as in some traditional corporations. Co-ops probably will not make their owners very, very rich, but they may make them relatively happy, secure, and self-respecting.When corporations are worker-owned and run, there is little need for outside regulation—other than the laws that govern the population generally, laws against theft, abuse, neglect and fraud. Top-down government regulation, with its cumbersome bureaucracies and lack of flexibility, cannot be as effective or as fair and adaptable as bottom-up regulation within a corporation itself. Co-ops are more transparent, since they have to keep the whole company informed on affairs. If a cooperative corporation is negligent and causes harm to its consumers or its community, all the worker-owners share responsibility for reparations. Negligence is not as likely to occur in a corporation whose operations are openly discussed and decided upon by a large group of people. Furthermore, top-down regulation—whether from CEOs, union bosses, or legislation—is more prone to corrupting influence. And top-down regulation hasn’t worked. Good union jobs have been outsourced and minimum wage is pitifully low. Both crony capitalism and unionization tend to concentrate power at the top.If anti-capitalists aren’t careful, they may find themselves free of corporate control, but under the rule of the same old masters with new names, which is what happened with the Soviet Union. More government control does not lead to greater democracy; it leads to an increase in oligarchical control. The problem with capitalism is really just that there aren’t enough capitalists in the system. If more workers were also owners, capitalism would work better and power would be distributed among more people.The 2012 documentary Shift Change by Mark Dworkin and Melissa Young was widely aired on public television this January and has been changing public opinion about unions and capitalism. The documentary looks at Mondragón and several cooperative businesses in the U.S., particularly Cleveland, from laundry services, solar system installers, farmers, bakeries, equipment manufacturers for the medical, automotive and energy industries, and coffee roasting. The producers told Digital JournalThe documentary Together , produced by Cecop-Cicopa, similarly gives examples in Europe, further supporting the idea that cooperatives are resilient forms of doing business and can often better survive, and even prosper, in widespread economic downturns. Both these documentaries seek to show how cooperatives are fundamental to democracy and real free market capitalism.The opposing forces of capital and labor enable each other. In the United States, both groups depend upon the existence of the other to justify the Republican and Democrat political machines behind them. To resolve the tensions between capital and labor would negate the raison d'etre of both parties. If labor unions are seen as a scary threat, Republicans get more donations and votes. If capitalists are seen as ruthless money masters, Democrats get more donations and votes. Neither party would survive without the other.In the U.S. there are only several hundred cooperative companies. Little discussion about co-operative corporations can be found in the mainstream discourse, either positive or negative. The belligerent voices of capital and labor drown out the more sensible voice of co-operation.Only the co-operative approach truly embraces the actual ideals that the Republican and Democratic parties pretend to represent. Espousing free market capitalism, co-operatives encourage the worker-owners to strive harder for efficiency, higher quality and profitability so that their company competes well in the marketplace. Embracing labor union principles, co-operatives allow workers to organize and negotiate (directly with each other) for higher workplace standards, reasonable hours and fair pay. Whereas traditional capitalism and unionization concentrate power among the few, the co-operative approach decentralizes power and thereby discourages corruption.Cooperative corporations may not be suited to all types of industries. Not all workers want to be part owners; there will also be a place for wage workers. But there is a need for a greater number of worker co-ops in our society if only because they provide greater stability in economic downturns. If the economy continues to decline, and more companies fail, laid-off workers should examine the option of continuing the business as its owners. Cooperative corporations are typically formed when a corporation goes bankrupt, and the employees, who don’t want to lose their only source of income, pool their capital and/or take out a loan to buy the failing company.In coming years if more people find themselves unemployed, they may want to think about networking with other unemployed people in order to use their collective sweat equity to start up new businesses. Cooperative corporations also tend to spring up where little or no capital is available, but labor is. Movie production is a type of business that lends itself to the co-operative corporation model, as are agriculture and local food production, high-quality artisan products, repair service industries, and cleaning services.Changing our ideas about how businesses can be structured, would, I believe, be a good first step in the direction of improved society. While actually increasing the number of cooperative corporations might not be on the horizon for decades, for the time being we might put an end to useless debate between capital and labor—because it’s getting us nowhere—and start talking about co-operation instead. Follow Victoria N. Alexander so you don’t miss an article in her DiY political change series. Alexander is the author of Locus Amoenus, a post-9/11 political-satire novel. This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com More about right to work, unionization, worker owned corporation, shift change, worker coop More news from right to work unionization worker owned corpora... shift change worker coop