Worker cooperative

A worker cooperative is a cooperative that is owned and self-managed by its workers. This control
may mean a firm where every worker-owner participates in decision-making in a democratic fashion,
or it may refer to one in which management is elected by every worker-owner who each have one vote.

Contents
History
Modern movement
Today
Research on worker cooperatives
Productivity
Pay inequality
Longevity and resilience
Worker satisfaction, trust, health and commitment
Definition of worker cooperative
Internal structure
Worker collectives
Common ownership worker co-operatives
Definition
Promotion and finance
Examples

Political philosophy of workers' cooperatives

An economic model: the labor-managed firm
Worker cooperatives by country
Europe
France
Italy
Spain
United Kingdom
Middle East
Israel
In North America
United States
Canada
Mexico
South America
Argentina
Asia
 India
Comparison with other work organizations
See also
Notes
References
Further reading
External links

History
Worker cooperatives rose to prominence during the
Industrial Revolution as part of the labour movement. As
employment moved to industrial areas and job sectors
declined, workers began organizing and controlling
businesses for themselves. Worker cooperatives were
originally sparked by "critical reaction to industrial
capitalism and the excesses of the industrial revolution."
Some worker cooperatives were designed to "cope with the
Model of Robert Owen's visionary project
evils of unbridled capitalism and the insecurities of wage
for a cooperative settlement (Owenites
labor".[1] fired bricks to build it, but construction
never took place)
The philosophy that underpinned the cooperative movement
stemmed from the socialist writings of thinkers including
Robert Owen and Charles Fourier. Robert Owen, considered by many as the father of the cooperative
movement, made his fortune in the cotton trade but believed in putting his workers in a good
environment with access to education for themselves and their children. These ideas were put into
effect successfully in the cotton mills of New Lanark, Scotland. It was here that the first co-operative
store was opened. Spurred on by the success of this, he had the idea of forming "villages of co-
operation" where workers would drag themselves out of poverty by growing their own food, making
their own clothes and ultimately becoming self-governing. He tried to form such communities in
Orbiston in Scotland and in New Harmony, Indiana in the United States of America, but both
communities failed.

Similar early experiments were made in the early 19th century and by 1830 there were several
hundred co-operatives.[2] Dr William King made Owen's ideas more workable and practical. He
believed in starting small and realized that the working classes would need to set up co-operatives for
themselves, so he saw his role as one of instruction. He founded a monthly periodical called The Co-
operator,[3] the first edition of which appeared on 1 May 1828. This gave a mixture of co-operative
philosophy and practical advice about running a shop using cooperative principles.

Modern movement
The first successful cooperative organization was the consumer-owned Rochdale Society of Equitable
Pioneers, established in England in 1844. The Rochdale Pioneers established the ‘Rochdale Principles’
on which they ran their cooperative. This became the basis for the development and growth of the
modern cooperative movement.[4] As the
mechanization of the Industrial Revolution was forcing
more and more skilled workers into poverty, these
tradesmen decided to band together to open their own
store selling food items they could not otherwise afford.

With lessons from prior failed attempts at co-operation

in mind, they designed the now famous Rochdale
Principles, and over a period of four months, they
struggled to pool one pound sterling per person for a The Rochdale Society of Equitable Pioneers
total of 28 pounds of capital. On 21 December 1844, was established in 1844 and defined the modern
they opened their store with a very meager selection of cooperative movement
butter, sugar, flour, oatmeal, and a few candles. Within
three months, they expanded their selection to include
tea and tobacco, and they were soon known for providing high quality, unadulterated goods.

The International organization representing worker cooperatives is CICOPA. CICOPA has two
regional organizations: CECOP- CICOPA Europe and CICOPA Americas.

Today
When the current cooperative movement resurfaced
in the 1960s, it developed mostly on a new system of
"collective ownership" where par value shares were
issued as symbols of egalitarian voting rights.
Typically, a member may only own one share to
maintain the egalitarian ethos. Once brought in as a
member and after a period of time on probation
usually so the new candidate can be evaluated, he or
she would be given the power to manage the coop
without "ownership" in the traditional sense. In the
UK, this system is known as common ownership. The old Co-operative building behind the
Gateshead Millennium Bridge in Newcastle upon
Some of these early cooperatives still exist, and most Tyne
new worker cooperatives follow their lead and develop
a relationship to capital that is more radical than the
previous system of equity share ownership.

In the United States, there is no coherent legislation regarding worker cooperatives nationally, much
less Federal laws, so most worker cooperatives make use of traditional consumer cooperative law and
try to fine-tune it for their purposes. In some cases, the members (workers) of the cooperative in fact
"own" the enterprise by buying a share that represents a fraction of the market value of the
cooperative.

In Britain, this type of cooperative was traditionally known as a producer cooperative; and while it
was overshadowed by the consumer and agricultural types, it also made up a small section of its own
within the national apex body, the Cooperative Union. The 'new wave' of worker cooperatives that
took off in Britain in the mid-1970s joined the Industrial Common Ownership Movement (ICOM) as a
separate federation. Buoyed up by the alternative and ecological movements and by the political drive
to create jobs, the sector peaked at around 2,000 enterprises. However, the growth rate slowed, the
sector contracted, and in 2001 ICOM merged with the Co-operative Union (which was the federal
body for consumer cooperatives) to create Co-operatives UK, thus reunifying the cooperative sector.

In 2008, Co-operatives UK launched The Worker Co-operative Code of Governance, an attempt to

implement the ICA approved World Declaration.

In 2018, Google announced a $1 million grant to a platform cooperative development kit in

collaboration with 5 pilot cooperatives, which are all worker-owned.[5]

Research on worker cooperatives

Productivity
According to Virginie Perotin's research which looked at two decades worth of international data,
worker cooperatives are more productive than conventional businesses[6]. Another study by The
Democracy Collaborative found that in the US, worker cooperatives can increase worker incomes by
70-80%.[7] One 1987 study of worker cooperatives in Italy, the UK, and France found “positive”
relationships with productivity. It also found that worker cooperatives do not become less productive
as they get larger. One 1995 study of worker cooperatives in the timber industry in Washington, USA
found that “co-ops are more efficient than the principal conventional firms by between 6 and 14
percent”.[8]

Pay inequality
In Mondragon Corporation, the world's largest worker cooperative, the pay ratio between the lowest
and the highest earner was 1:9 in 2018. The ratio is decided by a democratic vote by the worker-
members.[9] By comparison, the ratio between CEO pay to average (not the lowest) earner in top 350
US companies was 1:321 in 2018.[10]

In France, the pay ratio between the highest and lowest paid 10% of the employees is 14% lower in
worker cooperatives than in otherwise similar conventional firms.[11]

Longevity and resilience

According to an analysis, worker cooperatives in British Columbia, Alberta, and Quebec in the 2000s
were almost half as likely as conventional businesses to fail in ten years.[12] According to an analysis
of all businesses in Uruguay between 1997 - 2009, worker cooperatives have a 29% smaller chance of
closure than other firms.[13] In Italy, worker owned cooperatives that have been created by workers
buying a business when it's facing a closure or put up to sale have a 3 year survival rate of 87%,
compared to 48% of all Italian businesses.[14] In 2005, 1% of German businesses failed but the
statistic for cooperatives was less than 0.1%.[12] A 2012 study of Spanish and French worker
cooperatives found that they “have been more resilient than conventional enterprises during the
economic crisis."[12] In France, the three year survival rate of worker cooperatives is 80%-90%,
compared to the 66% overall survival rate for all businesses[15]. During the 2008 economic crisis, the
number of workers in worker owned cooperatives in France increased by 4.2%, while employment in
other businesses decreased by 0.7%.[16]

Worker satisfaction, trust, health and commitment

According to a study drawing on a questionnaire from the population of the Italian province of
Trento, worker cooperatives are the only form of enterprise that fosters social trust between
employees[17]. A survey conducted in Seoul suggests that in conventional firms, employees become
less committed to their job as their work becomes more demanding; however, this was not the case in
worker cooperatives[18]. In the US, home health aides in worker cooperatives were significantly more
satisfied with their jobs than in other agencies[19]. One 1995 study from the US also indicates that
“employees who embrace an increased influence and participation in workplace decisions also
reported greater job satisfaction”[20] and a 2011 study in France found that worker-owned businesses
“had a positive effect on workers’ job satisfaction.”[21] One 2019 study indicates that “the impact on
the happiness workers is generally positive”.[22] A 2012 study of three Italian towns of similar
demographics, income, and geography found that the town with the most worker cooperatives had:

1. Better mental and physical health, and longer lives, with fewer strokes and heart attacks.
2. Children were less likely to skip school and skipped school less.
3. Less crime, including less domestic violence and greater feelings of safety.
4. Higher rates of ‘social participation’ (joining clubs and charities; giving blood; voting).
5. Perception of a more positive society, more supportive personal networks, and more trust in the
government.[23][a]

Definition of worker cooperative

Many definitions exist as to what qualifies as a workers' cooperative. CICOPA, the International
Organisation of Industrial, Artisanal and Service Producers’ Cooperatives, gives an 8-page definition
in their World Declaration on Workers' Cooperatives, which was approved by the International Co-
operative Alliance General Assembly in September 2005. Below is the section on the basic
characteristics of workers' cooperatives:

1. They have the objective of creating and maintaining sustainable jobs and generating wealth, to
improve the quality of life of the worker-members, dignify human work, allow workers’ democratic
self-management and promote community and local development.
2. The free and voluntary membership of their members, in order to contribute with their personal
work and economic resources, is conditioned by the existence of workplaces.
3. As a general rule, work shall be carried out by the members. This implies that the majority of the
workers in a given worker cooperative enterprise are members and vice versa.
4. The worker-members’ relation with their cooperative shall be considered as different from that of
conventional wage-based labor and to that of autonomous individual work.
5. Their internal regulation is formally defined by regimes that are democratically agreed upon and
accepted by the worker-members.
6. They shall be autonomous and independent, before the State and third parties, in their labor
relations and management, and in the usage and management of the means of production.[24]
Workers' cooperatives also follow the Rochdale Principles and values, which are a set of core
principles for the operation of cooperatives. They were first set out by the Rochdale Society of
Equitable Pioneers in Rochdale, England, in 1844 and have formed the basis for the principles on
which co-operatives around the world operate to this day.

Even though there is no universally accepted definition of a workers' cooperative, they can be
considered to be businesses that make a product or offer a service to sell for profit where the workers
are members or worker-owners. Worker-owners work in the business, govern it and manage it. Unlike
with conventional firms, ownership and decision-making power of a worker cooperative should be
vested solely with the worker-owners and ultimate authority rests with the worker-owners as a whole.
Worker-owners control the resources of the cooperative and the work process, such as wages or hours
of work.[1]

As mentioned above, the majority—if not all—of the workers in a given worker cooperative enterprise
are worker-owners, although some casual or wage workers may be employed with whom profits and
decision making are not necessarily shared equally. Workers also often undergo a trial or screening
period (such as three or six months) before being allowed to have full voting rights.[1]

Participation is based on one vote per worker-owner, regardless of the number of shares or equity
owned by each worker-owner. Voting rights are not tied to investment or patronage in the workers'
co-operative, and only worker-owners can vote on decisions that affect them. In practice, worker co-
operatives have to accommodate a range of interests to survive and have experimented with different
voice and voting arrangements to accommodate the interests of trade unions,[25] local authorities,[26]
those who have invested proportionately more labor, or through attempts to mix individual and
collective forms of worker-ownership and control.[27]

As noted by theorists and practitioners alike, the importance of capital should be subordinated to
labor in workers' cooperatives. Indeed, Adams et al. see workers' cooperatives as "labor-ist" rather
than "capital-ist":

"Labor is the hiring factor, therefore the voting and property rights are assigned to the people who do
the work and not to capital, even though the worker-members supply capital through membership
fees and retained earnings...Any profit or loss after normal operating expenses is assigned to
members on the basis of their labor contribution."[1]

Nevertheless, recent developments in the co-operative movement have started to shift thinking more
clearly towards multi-stakeholder perspectives. This has resulted in repeated attempts to develop
model rules that differentiate control rights from investment and profit-sharing rights.[28] Workers'
co-operatives have often been seen as an alternative or "third way" to the domination of labor by
either capital or the state (see below for a comparison). Co-operatives traditionally combine social
benefit interests with capitalistic property-right interests. Co-operatives achieve a mix of social and
capital purposes by democratically governing distribution questions by and between equal controlling
members. Democratic oversight of decisions to equitably distribute assets and other benefits means
capital ownership is arranged in a way for social benefit inside the organization. External societal
benefit is also encouraged by incorporating the operating-principle of cooperation between co-
operatives.
In short, workers' co-operatives are organized to serve the needs of worker-owners by generating
benefits (which may or may not be profits) for the worker-owners rather than external investors. This
worker-driven orientation makes them fundamentally different from other corporations. Additional
cooperative structural characteristics and guiding principles further distinguish them from other
business models. For example, worker-owners may not believe that profit maximization is the best or
only goal for their co-operative or they may follow the Rochdale Principles. As another example,
worker cooperatives’ flattened management structure and more egalitarian ideology often give
workers more options and greater freedom in resolving work-place problems.[29]

Profits (or losses) earned by the worker's cooperative are shared by worker-owners. Salaries generally
have a low ratio difference which ideally should be "guided by principles of proportionality, external
solidarity and internal solidarity"[1] (such as a two to one ratio between lowest and highest earner),
and often are equal for all workers. Salaries can be calculated according to skill, seniority or time
worked and can be raised or lowered in good times or bad to ensure job security.

Internal structure
Worker cooperatives have a wide variety of internal structures. Worker control can be exercised
directly or indirectly by worker-owners. If exercised indirectly, members of representative decision-
making bodies (e.g. a Board of Directors) must be elected by the worker-owners (who in turn hire the
management) and be subject to removal by the worker-owners. This is a hierarchical structure similar
to that of a conventional business, with a board of directors and various grades of manager, with the
difference being that the board of directors is elected.

If exercised directly, all members meet regularly to make—and vote on—decisions on how the co-
operative is run. Direct workers' cooperatives sometimes use consensus decision-making to make
decisions.[30] Direct worker control ensures a formally flat management structure instead of a
hierarchical one. This structure is influenced by activist collectives and civic organizations, with all
members allowed and expected to play a managerial role. Such structures may be associated with
political aims such as anarchism, libertarian socialism and participatory economics.[31][32]

Some workers' cooperatives also practice job rotation or balanced job complexes to overcome
inequalities of power as well as to give workers a wider range of experiences and exposure to the
different jobs in a workplace so that they are better able to make decisions about the whole workplace.
The Mondragon Bookstore & Coffeehouse is a good example of a workplace that does this.

Worker collectives
The term 'worker collective' is sometimes used to describe worker cooperatives which are also
collectives: that is, managed without hierarchies such as permanent manager roles.[33]

Common ownership is practiced by large numbers of voluntary associations and non-profit

organizations as well as implicitly by all public bodies. Most co-operatives have some elements of
common ownership, but some parts of their capital may be individually owned.

Common ownership worker co-operatives

Definition
The principle of common ownership was codified in UK law in the Industrial Common Ownership Act
1976 (https://www.legislation.gov.uk/ukpga/1976/78/contents) which defines a "common ownership
enterprise" as:

a body as to which the registrar has given, and has not revoked, a certificate stating that he is satisfied
—

(a) that the body is—

(i) a company which has no share capital, is limited by guarantee and is a bona fide co-
operative society; or

(ii) a registered society within the meaning of the Co-operative and Community Benefit
Societies Act 2014; and

(b) that the articles of association or rules of the body include provisions which secure—

(i) that only persons who are employed by, or by a subsidiary of, the body may be
members of it, that (subject to any provision about qualifications for membership which is
from time to time made by the members of the body by reference to age, length of service
or other factors of any description which do not discriminate between persons by
reference to politics or religion) all such persons may be members of the body and that
members have equal voting rights at meetings of the body,

(ii) that the assets of the body are applied only for the purposes of objects of the body
which do not include the making over of assets to any member of the body except for
value and except in pursuance of arrangements for sharing the profits of the body among
its members, and

(iii) that, if on the winding up or dissolution of the body any of its assets remain to be
disposed of after its liabilities are satisfied, the assets are not distributed among its
members but are transferred to such a common ownership enterprise or such a central
fund maintained for the benefit of common ownership enterprises as may be determined
by the members at or before the time of the winding-up or dissolution or, in so far as the
assets are not so transferred, are held for charitable purposes; and

(c) that the body is controlled by a majority of the people working for the body and of the people
working for the subsidiaries, if any, of the body.

The principle is typically implemented through inserting two clauses in a company's Memorandum of
Association, or an industrial and provident society's rules:

The first provides that the company’s assets shall be applied solely in furtherance of its objectives
and may not be divided among the members or trustees.
The second provides for "altruistic dissolution", an "asset lock", whereby if the enterprise is wound
up, remaining assets exceeding liabilities shall not be divided among the members but shall be
transferred to another enterprise with similar aims or to charity.
British law has been reluctant to entrench common ownership, insisting that a three-quarters
majority of a company’s members, by passing a "special resolution", have the right to amend a
company’s memorandum of association. This three-quarters majority above applies to most limited
companies, except that it is possible since 2006 to entrench altruistic dissolution in an industrial and
provident society registered as a "community benefit society" ("bencom"). This statutory asset lock is
not available to societies registered as 'bona fide' co-operatives. However, such entrenchment has also
been written into the community interest company (CIC), a new legal status that was introduced in
2005.

Promotion and finance

Section 1.2 of the Industrial Common Ownership Act authorised the Secretary of State for Industry to
make grants and loans to bodies "constituted for the purpose of encouraging the development of
common ownership enterprises or co-operative enterprises" up to a total of £250,000 over a period of
five years, with the proviso that grants should not exceed £30,000 in any year. Grants to promote
common ownership enterprises were made to the Industrial Common Ownership Movement and the
Scottish Co-operatives Development Committee, while loans were administered through Common
Ownership Finance Ltd.[34] This section was repealed in 2004.

In 1978, the UK government set up the national Cooperative Development Agency and in subsequent
years common ownership was promoted as a model to create employment, and approximately 100
local authorities in the UK established co-operative development agencies for this purpose.[35][36]

Examples
A very significant early influence on the movement has been the Scott Bader Commonwealth, a
composites and specialty polymer plastics manufacturing company in Wellingborough,
Northamptonshire, which its owner Ernest Bader gave to the workforce in installments through the
late 1950s to early 1960s. Contrary to the popular concept of common ownership organizations as
being small organizations, this is a high-technology chemical manufacturer whose turnover has
exceeded £100 million per annum since the early 1990s with a workforce of hundreds. In London,
Calverts is an example of an established worker co-operative with a policy of pay parity. From the
collective movement, one of the most successful ventures is probably Suma Wholefoods in Elland,
West Yorkshire.

Political philosophy of workers' cooperatives

The advocacy of workplace democracy, especially with the fullest expression of worker self-
management such as within workers' cooperatives, is rooted within several intellectual or political
traditions:

The alleviation of alienation in the workplace, especially in regard to Marxist thought

The encouragement of participatory or direct democracy
Radical but popular-democratic strategies for the overthrow of capitalism, for example, several
strains of socialist and anarchist thought
Autonomy and self-control, especially within anarchist thought.
Cooperating with other worker cooperatives
Workers' cooperatives are also central to ideas of autonomism, distributism, mutualism, syndicalism,
participatory economics, guild socialism and libertarian socialism, among others.

An economic model: the labor-managed firm

Economists have modeled the worker cooperative as a firm in which labor hires capital, rather than
capital hiring labor as in a conventional firm. The classic theoretical contributions of such a "labor
managed firm" (LMF) model are due to Benjamin Ward and Jaroslav Vanek.[37]

In the neoclassical version, the objective of the LMF is to maximize not total profit, but rather income
per worker. But such a scenario implies "perverse" behavior, such as laying off workers when output
price rises so as to divide increased profits among fewer members.[38] Evidence supporting such
behavior is lacking, however; a review of the empirical economics literature is found in Bonin, Jones,
and Putterman.[39] But alternative behavioral models have been proposed. Peter Law examined LMFs
that value employment and income.[40] Nobel Laureate Amartya Sen examined pay according to work
and according to need.[41] Nobel Laureate James Meade examined behavior of an "inegalitarian"
LMF.[42] Worker cooperatives tend to have a more compressed wage distribution, which can
potentially turn off high-ability workers, potentially causing the cooperative to suffer a "brain drain"
as they leave to seek higher wages elsewhere, though this effect is less of an issue in a cooperative with
a less compressed wage distribution.[43] Hiring managers from capitalist firms can be very difficult
because of the lower wages. [44]

Generally, the evidence indicates that worker cooperatives have higher productivity than conventional
companies although this difference may be modest in size.[45] Research indicates that employee
ownership can improve company performance, increase firm stability, increase survival rates and
reduce layoffs during a crisis, though the effect is small and only an average, meaning it is not
necessarily guaranteed to bring benefits.[46] A 2016 metanalysis concluded that employee ownership
had a small positive effect on firm performance but no effects on efficiency or growth-related
outcomes.[47] However some researchers have argued that while cooperatives can have higher
performance in some circumstances, there is generally little difference in performance between
cooperatives and conventional firms and that ultimately they are, on average, just as productive as
each other.[48][49] Economists have explained the clustering of worker coops through leagues or
"supporting structures"[50] Regions where large clusters of worker cooperatives are found supported
by leagues include Mondragón, in the Basque region of Spain, home of Mondragón Cooperative
Corporation and in Italy, particularly Emilia-Romagna. Leagues provide various kinds of scale
economies to make coops viable. But as leagues need coops to start them the result is a chicken or egg
problem that helps explain why few coops get started.[51] Research has suggested that the primary
appeal of a cooperative for its members is in security of employment, as workers can actually become
decoupled from a cooperative's ostensible worker ownership (due to a mixture of interests and the
more individualistic values of more recent workers), making secure employment, particularly in
economically precarious times, a major draw.[52] While it has been suggested that cooperatives could
be a solution to unemployment, research indicates that this is unlikely to be the case.[53]

Worker cooperatives do not seem to differ in innovation or management capabilities from

conventional firms.[54] Workers at cooperatives tend to report higher levels of involvement in their
tasks, more positive evaluations of supervisors and greater fairness in their perception of the amount
of wages they received and methods of payment.[55] Employment in worker-owned firms tends to be
more stable than conventional firms, which fluctuate more. This was attributed to conventional firms
fixing wages and having to lay off employees during times of economic difficulty, as workers would
not accept a wage cut since they could not guarantee restoration of their original wages at a later date,
requiring workers to be laid off instead. In a cooperative, workers can accept a wage cut since they
know they can restore it at a later date.[56] Cooperatives have a higher survival rate than traditional
firms, which seems to be down to greater employment stability and willingness of workers to make
adjustments to allow the firm to survive, rather than other possible explanations like greater
productivity or financial strength.[57] Worker cooperatives and conventional firms tend to have
similar wages after controlling for other possible variables, with any wage differentiation being due to
other characteristics aside from firm organization.[58] If the workers are not satisfied with their work
and participation, they can express their disengagement with higher rates of absenteeism.[44]
Managers can refrain from proposing controversial, needed changes if they feel that they would be
rejected by the workers.[44]

Worker cooperatives by country

Europe
Worker co-operation is well established in most countries in Europe, with the largest movements
being in Italy, Spain, and France.

The European Cooperative Statute, which has been in force since 2006, permits worker cooperatives
to be created by individuals or corporate bodies in different EU countries. It is a loose framework that
devolves much detail to the national legislation of the country in which the European Cooperative
Society (ECS) is registered. It permits a minority of shares to be held by 'investor members' which are
not employees.

France
Workers' associations were legalized in 1848 and again in 1864. In 1871, during the Paris Commune,
workshops abandoned by their owners were taken over by their workers. In 1884 a chamber of
workers' cooperatives was founded. By 1900 France had nearly 250 workers' cooperatives and 500 by
1910. The movement was to rise and fall throughout the twentieth century, with growth in 1936, after
the Second World War, between 1978 and 1982 and since 1995.

In 2004 France had 1700 workers' co-operatives, with 36,000 people working in them. The average
size of a co-operative was 21 employees. More than 60% of co-operative employees were also
members.[59] French workers' co-operatives today include some large organisations such as Chèque
Déjeuner and Acome. Other cooperatives whose names are generally known to include the magazines
Alternatives économiques and Les Dernières Nouvelles d'Alsace, the driving school ECF CERCA and
the toy manufacturer "Moulin Roty".

Italy
The cooperative movement in Emilia-Romagna, Italy, successfully melds two divergent philosophical
currents: Socialism and Catholicism.[60] With more than a century of cooperative history, the region
includes more than 8,000 cooperatives.

Spain
One of the world's best known examples of worker cooperation is the Mondragón Cooperative
Corporation in the Basque Country.[61]
United Kingdom
In the United Kingdom, the Labour Party's enthusiasm for worker cooperatives was at its highest in
the 1970s and 1980s, with Tony Benn being a prominent advocate. A small number of such co-
operatives were formed during the 1974 Labour Government as worker takeovers[62] following the
bankruptcy of a private firm in a desperate attempt to save the jobs at risk. However the change in
ownership structure was usually unable to resist the underlying commercial failure.[26] This was true
in particular of the best known, the Meriden motor-cycle cooperative in the West Midlands which
took over the assets of the ailing Triumph company, although there were instances of successful
employee buy-outs of nationalized industries in the period, notably National Express.[63] Meanwhile,
many more worker co-operatives were founded as start-up businesses, and by the late 1980s, there
were some 2,000 in existence. Since then the number has declined considerably.

Co-operatives are typically registered under either the Companies Act 2006 or the Co-operative and
Community Benefit Societies Act 2014 (IPS), though other legal forms are available. A number of
model rules have been devised to enable cooperatives to register under both acts; for workers'
cooperatives, these rules restrict membership to those who are employed by the workplace. Most
workers' co-operatives are incorporated bodies, which limits the liability if the co-operative fails and
goes into liquidation.[30]

The largest examples of a British worker cooperatives include, Suma Wholefoods, Bristol-based
Essential Trading Co-operative and the Brighton-based Infinity Foods Cooperative Ltd.[64]

Middle East

Israel
In Israel, worker cooperatives emerged in the early 20th century alongside the Kibbutz, the collective
farming movement. The Kibbutz is a cooperative movement that was founded on Zionist ideas, with
the intention to cultivate land and increase the number of Jewish settlements. By the 1970s, the
Histadrut (Israel Labour Federation) controlled a significant number of corporations, including
Israel’s largest bank—Bank Hapoalim (literally the Worker’s Bank). By the 1990s, the Histadrut had
lost its power and influence and many worker cooperative corporations were sold or became public
companies. Israel’s biggest public transportation company, Egged, is still a workers cooperative.
However, Egged employs workers who are not cooperative members and are paid at a lower wage
than worker-members.

In North America

United States
National organization

The United States Federation of Worker Cooperatives is the only organization in the U.S. representing
worker cooperative interests nationally. Offering a voice on national level, promoting the worker co-
operative model, uniting co-ops at conferences and providing a base of support and technical
assistance to the worker co-operative community.[65]
Regional organizations

The Eastern Conference for Workplace Democracy[66] and Western Worker Co-operative
Conference[67] hold conferences every other year for their respective regions. In addition, there are
national and regional nonprofit organizations that focus on providing technical support and
assistance to both create new worker cooperatives (start-ups) and conversions of existing businesses
into worker cooperatives, usually when the business owner is retiring and wants to sell the company.
These organizations include Democracy at Work Institute (created by the U.S. Federation of Worker
Cooperatives), Cooperative Development Institute, Ohio Employee Ownership Center, Vermont
Employee Ownership Center, Project Equity, and others.

Cooperation Jackson is a federation of cooperatives based in Jackson, Mississippi, which seeks to

build worker-owned coops and other locally-operated institutions.[68][69]

Canada
Worker co-ops in Canada are represented by the Canadian Worker Co-op Federation (CWCF).
Members of the CWCF are found throughout English Canada.[70]

Ontario has its own federation with well-developed standards.[71][72] Quebec has a distinct worker co-
operative history, and is presently organised into a number of regional federations.

Mexico
After the revolt on 1 January 1994 from EZLN, the indigenous people in Chiapas started the
reconstruction of their Zapatista coffee cooperatives.[73]

South America

Argentina
In response to the economic crisis in Argentina, many Argentinian workers occupied the premises of
bankrupt businesses and began to run them as worker-owned cooperatives. As of 2005, there were
roughly 200 worker-owned businesses in Argentina, most of which were started in response to this
crisis.[74] The documentary film The Take described this phenomenon.

According to a recent statement by the International Co-operative Alliance, cooperative businesses in

Argentina employ nearly 20 million people across a number of business sectors from health care to
housing to factory work and beyond. These businesses are increasing in number at a drastic rate, with
over 6000 having been created in 2012 alone.[75]

See also recovered factory.

Asia

India
India has a substantial set of laws, rules & regulations for enterprises in the co-operative sector.

The Indian Coffee Houses in India were started by the Coffee Board in the early 1940s, during British
rule. In the mid-1950s the Board closed down the Coffee Houses, due to a policy change. The thrown-
out workers then took over the branches, under the leadership of A. K. Gopalan and renamed the
network as Indian Coffee House. This history is recorded in Coffee Housinte Katha, a book in
Malayalam, the mother tongue of A. K. Gopalan. The author of the book is Nadakkal Parameswaran
Pillai one of the leaders of the ICH movement. Another very large network of worker coops is Kerala
Dinesh Beedi, originally started by exploited beedi rollers.[76]

Comparison with other work organizations

There are significant differences between ends and means between firms where capital controls labor
or firms where the state controls both labor and capital. These distinctions are easily seen when
measured by essential elements of commerce: purpose, organization, ownership, control, sources of
capital, distribution of profits, dividends, operational practices, and tax treatment. The following
chart compares the commercial elements of capitalism, state ownership, and cooperative worker-
ownership. It is based on US rules and regulations.[1]
Commercial
For-profit corporations
criteria
a) To earn profit for owners, to
Purpose
increase the value of shares.
a) Organized and controlled by
investors
b) Incorporated under relevant
incorporation laws – varies by
country
Organization
c) Except for closely held
companies anyone may buy
stock
d) Stock may be traded in the
public market
Ownership a) Stockholders
a) By Investors
b) Policies set by stockholders
or board of directors.
Control
c) Voting on basis of shares
held
d) Proxy voting permitted
a) Investors, banks, pension
funds, the public
Sources of
b) From profitable subsidiaries
capital
or by retaining all or part of the
profits
Distribution a) To stockholders on the
of net basis of the number of shares
margin owned
Capital a) No limit, amount set by
dividends owner or Board of Directors
a) Owners or managers order
production schedules and set
wages and hours, sometimes
Operating
with union participation
practices
b) Working conditions
determined by labor law and
collective bargaining.
Tax a) Subject to normal corporate
treatment taxes
See also
Employee-owned corporation
Industrial democracy
Workers' control
Economic democracy
Democratic Education
Housing Cooperative
State-owned enterprises Worker cooperatives
a) To provide goods and
services, or hold and a) To maximize net and real worth of
manage resources for all owners.
citizens.
a) Organized and controlled by
a) Organized and worker-members
controlled by state b) Incorporated under relevant
b) Chartered by relevant incorporation laws – varies by
level of government country
c) No stock c) Only worker-members may own
d) n/a stock, one share per member
d) No public sale of stock
a) State a) Worker members
a) By worker-members
a) By state
b) Policy set by directors elected by
b) Policy set by
worker-members, or by assembly of
government planners.
worker-members
c) n/a
c) One person, one vote
d) n/a
d) Proxy votes seldom allowed
a) By members or by lenders who
have no equity or vote
a) The state
b) From net earnings, a portion of
which are set aside for reinvestment
a) To members after funds are set
a) To the State aside for reserves and allocated to a
collective account
a) Limited to an interest-like
a) n/a
percentage set by policy
a) Managers order a) Workers set production schedules
production schedules and either through elected boards and
set wages and hours, appointed managers or directly
sometimes with union through assemblies
participation b) Working conditions determined by
b) Working conditions labor law and assembly of worker-
determined by labor law members, or internal dialogue
and collective bargaining between members and managers.
a) Special tax treatment in some
a) n/a
jurisdictions
Economics of participation
Voluntary association
Collectives
Benefit Corporation
Other workers' cooperative thinkers

Michael Albert Robert Owen

Hilaire Belloc James Meade
Kevin Carson Mario Bunge
G. K. Chesterton Carole Pateman
G.D.H. Cole Friedrich Wilhelm Raiffeisen
Robert A. Dahl The Rochdale Pioneers
Sam Dolgoff David Schweickart
Noam Chomsky José María Arizmendiarrieta
John Stuart Mill E. F. Schumacher
Gregory Dow Stephen C. Smith
David Ellerman Roger Spear
Charles Gide Leland Stanford
David Griffiths Jaroslav Vanek
George Holyoake Beatrice Webb
Derek C. Jones Sidney Webb
William King William Foote Whyte
Naomi Klein Richard D. Wolff
Michael Moore

Videos about workers' cooperatives

Anarchism in America
Capitalism: A Love Story

Notes
a. This particular study only proved correlation between worker cooperatives and better community
quality of life, and failed to prove a causal relationship between the two. As per page 5 of the
study, "This study does not prove anything—only establishes an association, and there may be
unidentified other factors at work."

References
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24. ICA (2005) World Declaration on Worker Cooperatives, Approved by the ICA General Assembly in
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35. Having failed to become self-supporting, the national agency was wound up in 1989. Cornforth,
Chris (1984). The role of local co-operative development agencies in promoting worker co-
operatives. Annals of Public and Cooperative Economics, 55(3) pp. 253–280 (http://oro.open.ac.u
k/15866/)
36. Manuela Sykes (1981) Co-operating in Employment Creation. The role of common ownership
enterprise in the economic and social regeneration of areas of high unemployment: a request and
a challenge to local authority leadership, Leeds: ICOM.
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University Press, 1970; Ward, Benjamin, 1958. "The Firm in Illyria: Market Syndicalism," American
Economic Review, 48, 4, 1958, 566-89.
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Syndicalism," American Economic Review, 48, 4, 1958, 566-89.
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"perversely"; Peter J. Law, "The Illyrian firm and Fellner's union-management model, "Journal of
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20091130030151/http://www.legacoop.it/) 30 November 2009 at the Wayback Machine and
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Further reading
For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and
Communalism in America, PM Press, by John Curl, 2009, ISBN 978-1-60486-072-6
(in French) Créer en Scop, le guide de l'entreprise participative, Ed Scop Edit 2005 (disponible
gratuitement sur le site de la CG SCOP (http://www.scop.coop))
(in French) Histoire des Scop et de la coopération, Jean Gautier, Ed Scop Edit, 2006 (DVD)

External links
Official website (http://www.cicopa.coop/)
GEO.Coop (http://www.geo.coop/about)
NYCWorker.Coop (https://nycworker.coop/)
USWorker.Coop (https://usworker.coop/about/)

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