Labor Unions and Co-ops, part 5

There and Back Again: Unions and Worker Co-operatives

In October 2009, the United Steelworkers and Mondragón Co-operative held a joint press conference to announce a partnership to create worker-owned unionized factories in the United States (Witherell, 2013). This marked the first time that the national leadership of a US labor union openly endorsed worker ownership since the days of the Knights of Labor. Likewise, for Mondragón, it marked as new effort to directly engage the US marketplace and build relationships with labor as opposed to contracting with the management of organizations such as General Motors.

The Union-Co-op Model exists as more of a paradigm than a model. No one form of union-co-operative partnership exists, although some proponents might claim superiority of their model. The unions involved tend to be from the MGU and SMU models (SEIU, CWA, United Electricians) but there are a few traditional Business Unions in the mix as well (UFCW). As the recovery from the Great Recession continues, the idea of creating synergy out of these disparate parts of the labor movement continues to intrigue academics and community organizers alike with the model seen as a key part of building a more sustainable commonwealth (Gordon-Nembhard, 2016) and overcoming income inequality (Huertas-Noble, 2016).

For many in the traditional worker co-operative community, labor unions seem as an unnecessary layer of bureaucracy and potential source of conflict when the workers already own the means of production; however, as pointed out in a 1953 National Labor Board ruling (Everett Plywood), “The mere fact that an employee also has rights and privileges of a stockholder is not sufficient to deny him from availing himself in his capacity as an employee.” (Lund, 1990).  Employee owned business can have a number of unique legal issues and conflicts of interests and the laws are not written to consider the unique nature of workers enjoying the position of both employee and employer (Dilts, 1990). Certainly, some worker co-operative models do create questions as to their authenticity and ability to adequately protect worker rights (Davis, 2016), however, as the NLRB noted in Everitt v. Union Cab,  when “shareholder-members of a co-operative corporation were excluded from coverage of the Act because they, as a group, had an “effective voice in the formulation and determination of corporate policy,” making them managerial employees.” (Gottshalk, 2013).

There is no inherent aspect of either worker co-operatives or labor unions that makes them progressive. Both organizations can be motivated for purely material gain regardless of the larger ethical issues as play. Likewise it should not be assumed that when worker co-operatives and labor unions work together that the outcome will lead toward a more progressive or socially engaged movement (Ji, 2015). The role of unions within an employee owned business can take on several roles as loyal opposition, strategic partner, or safety net (Ellerman, 1988). For worker co-operatives, which do not depend on the majority stockholder to ensure good working conditions or the democratic management scheme, the engagement with labor unions can be quite varied. So far, I have discussed the various dynamics in American society, culture, and labor movements that have brought these two forms of the labor movement back together. The material benefits for workers through either the labor union or worker ownership model have been well documented, but don’t necessarily offer a great reason for these groups to merge. This brings the discussion back to the social and community needs of the members that they experience through the unique myth of the American Dream. This dream offers more to people than material wealth, it also offers a sense of humanity and shared community that helped expand the civil and human rights from a narrow group of White Anglo-Saxon Protestant Men to include women, people of color, indigenous communities, all-religious faiths, and most recently to sexual and gender identity. It has not always been an easy (or safe) pathway, and at many times, the progress made seems under attack. However, the core myth of the American Dream provides a inspiration and motivation for continued progress towards social and economic justice.

Next Week: part one of a discussion about the American Dream, Unions, and Co-ops.

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update on this site

I had a few minutes this morning to fix some things with this site.

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Read about this site in more detail on the site information page.

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Labor Unions and Co-ops, part 4

The New* Worker Co-operatives

Worker owned businesses have always existed in the in the United States. They may be as small as a single proprietorship or as large as Google. Depending on the definition of worker ownership, organizations such as Google and Microsoft (Blasi, Freeman, & Kruse, 2013), which offer significant stock options along with traditional ESOPs such as WinCo Foods and their “millionaire cashiers” (Josephs, 2014). The workers in these organizations tend to do better than workers in competing organizations; however, the workers do not have any control over the workplace. The ownership is purely transactional. A different type of worker ownership, the co-operative, has also engaged workers in the United States for centuries. As stated earlier, worker owned factories were the primary vehicles for the Knights of Labor. Other laborers (both industrial and agricultural) turned to the co-operative model to meet their economic and social needs. The American Grange championed co-operatives throughout the United States and many of the top Agriculture firms today are producer or “shared-service” co-operatives in which the members of the co-operatives may be a single farmer (and his or her family) or an incorporated farm and use the co-operative to engage in bulk purchasing of supplies and marketing the product of each farm (Welch’s, Sunkist, Land o’ Lakes, Cenex, etc.). Worker co-operatives, in the laborers of a business own the business, however, largely disappeared during the second Industrial Revolution with the exception of a few fishing and logging co-operatives in the Pacific Northwest.

The social upheaval caused by the Civil Rights Movement and the Anti-Vietnam War movement sparked renewed interest in worker owned co-operatives, but outside of a few enclaves such as San Francisco, Minneapolis, Madison and Boston, the worker co-operative model was often ignored in favor of consumer, agricultural, housing and financial co-operatives. This began to change in the new century. The collapse of the Argentina economy in the early 00’s sparked a new movement of workers who took over their closed factories, claiming the building and equipment in exchange for back-pay (Lewis, 2004) sparking a similar take over in Chicago at the Republic Windows Company in 2007. This movement sparked similar ideas of worker ownership in the United States. By 2004, momentum among the existing 300 or so worker co-operatives built to create the US Federation of Worker Co-operatives and they held their first meeting in Minneapolis. On the international level, the International Organization of Industrial and Service Co-operatives published a Declaration on Worker Co-operatives that defines a worker co-operative as meeting these key elements (CICOPA, 2005):

  1. They have the objective of creating and maintaining jobs that provide a living wage or better and contribute to the quality of life, dignity of human work, and provide for democratic self-management while promoting community and local development.
  2. Free and voluntary membership/
  3. A majority of the workers are members and a majority of the members are workers.
  4. The worker-members relation with their co-operative should be different than waged-based labor and more akin to autonomous individual work.
  5. Internal governance is democratic.
  6. They have autonomy and independence from the government and third parties.

The CICOPA definition along with the simpler concept provide by Bowles and Gintis (1996) in which they define a democratic firm as one in which labor chooses the administration and administrative structure through a democratic process. The worker co-operatives in the United States run a gamut of industries from retail such as bicycle shops, bakeries, and book stores, to service industries such as cleaning, home care, and taxi operations, to industry with coffee roasters, industrial bakeries, and machine engineering. Governance models range from the true collective (generally in smaller co-operatives) to traditional hierarchical top-down management command-and-control. However, at the base of all of these organizations is either a board of directors or the general meeting in which the workers collectively decide the key aspects of the organization. Worker co-operatives have a lot to offer the labor movement and their development at this critical juncture in the US labor movement offers new potentialities for workers to reengage with the American Dream.

While traditional industrial relations theory tend to disregard, if not distrust, the ability of workers to self-manage in an effective means (Perlman, 1970) more recent research has shown that worker co-operatives can out-perform their competitors even while spending capital on improved working conditions and wages. In general, worker co-operatives operate at a higher level of productivity than conventional firms (CF) (Bowles & Gintis, 1996; Craig & Pencavel, 1995) although the causes of increased productivity may not always be completely understood and may even be a result of work practices that might not be permitted in conventional firms with or without labor union representation due to the “entrepreneurial nature” of the worker and a higher degree of risk-acceptance (Craig & Pencavel, 1995). In any event, traditional comparisons need to be adjusted with the nature of the workplaces. Co-operatives exist to benefit their members just as CFs exist to benefit their shareholders. In an employee owned firm, then, many of the benefits (higher wages, better insurance, safer and more humane working conditions) translate economically into the expense side of a traditional profit-and-loss statement. For example, Union Cab of Madison Co-operative  provides health insurance to its members by paying up to 70% of the premium in an industry that never provides health insurance to its drivers. In 2009, this benefit cost the co-operative approximately $360,000 for the co-operative’s contribution or approximately 5% of annual sales (Siegfried, 2009).

Wages compose the primary driver for labor unions and worker co-operatives alike, so it should come as no surprise that worker owned business tend to have higher wages as the wages become the primary source of return to the worker-owner (Craig & Pencavel, 1992). However, the more interesting dynamic arises from mechanisms to adjust to changes in the market place where co-operative engage a positive wage-employment relationship (they adjust to the market more slowly and tend to protect employment) (Burdín & Dean, 2009). In addition, pay differential within the co-operatives tend to be exceptionally small (Craig & Pencavel, 1992; Levine, 1990) as work tends to be considered equitable in order to meet the needs of the organization. The ability to control wages and benefits and using a compressed wage scale creates an elasticity within the labor system that helps lengthen the life span of the co-operative and allows them to weather economic downturns better than CFs (Ben-ner, 1984).  However, the life cycle of worker-owned firms does not follow similar patterns of CFs, which may be for a multitude of reasons that can vary by nationality. Some of these reasons include risk-aversion among the ownership required to address changes in the marketplace, the conversion of a CF already near the end of its life cycle, and increased competition during economic upswings (Ben-Ner, 1988).

While data on the actual number of worker co-operatives is severely limited, the incidence of the creation of worker co-operatives has been increasing since 2010. Many of the new co-operatives are being started by new immigrants and younger people who do not see the pathway to a career that their parents had even twenty years ago. In addition, the model has received a significant amount of attention recently through films such as Shift Change (Dworkin & Young, 2013) and new organizations such as the Democracy Collaborative. Significant barriers exists to the creation of worker co-operatives, not the least of which includes access to capital (Lawrence, 2002) and connection to larger networks. Labor unions provide one such network. Traditional relationships between the two models of the labor movement in the United States tend to run from indifference to distrust that workers can adequately manage disputes without union leadership (Lanze, 1992).  The Industrial Workers of the World has historically mistrusted worker co-operatives as a form of “self-exploitation” worrying that they will push wages down to compete with unionized firms (X344543, 2010).

* By “new” I mean the new era of worker ownership that began in the 1970’s and continued building through the neoliberal attack on labor unions (post-PATCO) and the social safety net. Some of these co-ops have celebrated their 40th anniversary, but they are new in the sense that they marked a return to worker ownership that had largely been ignored for much of the 20th Century.

 

References:

Ben-ner, A. (1984). On the Stability of the Cooperative type of Organization. Journal of Comparative Economics, 8, 13.

Ben-Ner, A. (1988). The Life Cycle of Worker-Owned Firms in Market Economies. Journal of Economic Behavior and Organization, 10, 26.

Blasi, J. R., Freeman, R. B., & Kruse, D. L. (2013). The Citizen’s Share: Putting Ownership Back Into Democracy. New Haven & London: Yale University Press.

Bowles, S., & Gintis, H. (1996). The Distribution of Wealth and the Assignment of Control Rights in the Firm. Amherst, MA.

Burdín, G., & Dean, A. (2009). New Evidence on Wages and Employment in Worker Cooperatives Compared with Capitalist Firms. Journal of Comparative Economics, 37, 16. doi:10.1016/j.jce.2009.08.001

CICOPA. (2005). World Declaration on Worker Co-operatives. Retrieved from http://www.cicopa.coop/World-Declaration-on-Worker.html

Craig, B., & Pencavel, J. (1992). The Behavior of Worker Cooperatives: The Plywood Companies of the Pacific Northwest. The American Economic Review, 82(5), 1083-1105.

Craig, B., & Pencavel, J. (1995). Participation and Productivity: A Comparison of Worker Cooperatives and Conventional Firms in the Plywood Industry. Retrieved from Washington, DC:

Dworkin, M., & Young, M. (Writers). (2013). Shift Change. In M. Young (Producer). Seatle, WA: Bullfrog Films.

Josephs, M. (2014, November 5, 2014). Millionaire Grocery Clerks: The Amazing WinCo Foods Story. Forbes.

Lanze, L. B. (1992). Attitudes of Labor Union Leaders Toward Worker Cooperatives: A survey of the United States, the United Kingdom and Italy. Annals of Public and Coopertive Economics, 63(1), 77-102.

Lawrence, J. W. (2002). Democratic Worker Cooperativs: An Organizational Strategy Reconsidered for the 21st Century. New Politics, Summer, 116-122.

Levine, D. I. (1990). Participation, Productivity, and the Firm’s Envrionment. California Management Review, 32(4), 86-100.

Lewis, A. (Writer). (2004). The Take. In B.-A. Productions, K. L. Productions, N. F. B. o. Canada, & C. B. Corporation (Producer). Toronto: Celluloid Dreams.

Perlman, S. (1970). A Theory of the Labor Movement. New York: Augustus M. Kelley.

Siegfried, D. (2009). [Board Meeting Packet].

X344543, M. (2010). Collectives, Workers’ Cooperatives and the IWW. Retrieved from http://www.iww.org/en/join/collectives.shtml

 

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Labor Unions and Co-ops, part 3

A Labor Movement for the New Guilded Age

When Ronald Reagan stood before the Brandenburg Gate on June 12, 1987, he not only invoked the rising supremacy of the United States by demanding “Mr. Gorbachev, tear down this wall!”, he ushered in a new era of individualism focused on the “freedom”(Bruner, 1989) that was libertarian in nature and encouraged the material success of the US economic model. This beginning of a new “Guilded Age” focused on the creation of individual wealth and individual prosperity. Roy H. Williams sees this moment as the zenith of the “Me Generation” (Williams, 2016), in which the relative strengths of individual achievement turn back on themselves. In this continuum between the “we” and the “me”, observers can understand the general debate over labor between the collective nature of the Republic and the desire for individualism. .

The ensuing years after Reagan’s speech saw the wall and the entire Warsaw Pact nations with planned economies fall. The rise of capitalism on a global scale ushered in a new era of globalism through international agreements such as the North American Free Trade Act and creation of the World Trade Organization. Both major party leaders in the United States embraced free trade, which allowed corporations to move capital across international borders with few obstacles. The attack on organized labor under the Reagan administration became a flight from organized labor under the Clinton administration. Further modernization of industry and relaxing New Deal era regulations on finance and monopolies allowed networks such as Wal-Mart, and practices such as “just-in-time” production to further erode the labor ecosystem as the nation switched from an industrial to a service economy (Klein, 2000, 2007; Meyer, 2016). Union coverage in the United States dropped by 17% during the Clinton Administration compared to 25% during the Reagan era[1] (Hirsch & MacPherson, 2012). The neo-liberal model of “flexible” capitalism, which allows capital to move quickly and help enhance just-in-time production, weakened the ability of the Wagner-model labour movement to hold corporations (often transnational) accountable or to meaningfully engage in negotiations (Meyer, 2016).

The reasons behind worker’s desire to unionize (Farber & Saks, 1980) have not changed. Job security, fair treatment and better wages and benefits remain core issues and over a million US workers join unions every year (Chaison, 2006) even while total union membership and coverage continues to decline. In addition to formal trade unions which have come under increasingly heavy regulation through amendment to the Wagner Act, workers and community organizers have begun to engage in non-traditional means to change working conditions through unofficial labor groups, social movements, and new mass organizations such as the Fight for $15, Chicago Jobs and Living Wage Campaign, and other grass roots organizations (Meyer, 2016).

This has led to a rediscovery non-business union models such as Mutual Gains Unionism (MGU) or Value-Added Unionism (VAU) and Social Movement Unionism (SMU). The MGU model found limited success as labor unions attempted to engage in partnerships with the employers of their members in which traditional bargaining over wages and benefits gives way to participating in the growth of the company to the benefit of workers overall, the most successful example being the Saturn automotive plant in Tennessee, a project of General Motors. SMU theorists urge the labor movement to reunite with non-labor organizations to make common cause in the defense of workers and all people who suffer under the dominant economic system. Recent attempts such as SEIU’s Jobs with Justice campaign for New York City Janitors and CWA’s efforts with living wage campaigns demonstrated the power of SMU with marginalized communities outside of the traditional “union zone” (Devinatz, 2008; Nissen, 2003). SMU helped propel the labor movement throughout the first third of the 20th century and helped create the environment that allowed business unionism to exist (Nissen, 2003).

A number of community organizers have created worker centers to press the rights of workers. These centers are “community-based and community led” (Fine, 2005) and evade the regulations of the NLRA. This allows workers and their allies to use community campaigns to press demands for better wages, working conditions, and local regulations that protect workers. The worker centers, as not-for profit organizations that are independent of a collective bargaining unit, have the ability to go where unions cannot. They can engage secondary boycotts, provide informational pickets to publicly shame employers, and even protect workers during and after wildcat strikes. (Duff, 2014; Eidelson, 2013). Further, the National Labor Relations Board under the Obama administration included non-unionized workers in its purview. The NLRA has always covered all workers, but traditionally the NLRB has not considered cases brought by unrepresented workers (or the ability to bring a case has been too difficult).

These new movements look and act like the social movements of the late 1800’s: the Eight Hour Day, the rise of the NAACP, the push for regulation such as the Sherman Anti-Trust Act and other efforts to bring the Robber Barons of the day to heel. While the traditional Wagner model labor unions may seem to be in retreat (and their numbers decrease daily), the modern technology of the social media, smartphones and encrypted messaging services along with the renewed interest in worker rights through Fair Trade abroad and Living Wages at home have created a powerful foundation for workers to engage employers as never before. The modern labor movement may seem fractured (and in many ways it is), but it has not devolved into a disorganized mess, but a mosaic of multiple organizational models. This has created a multi-model line of attack and defense for the modern worker that has brought new relevance to old organizations such as the Industrial Workers of the World and their protracted fight against the Jimmy Johns sandwich franchise (Jamieson, 2016) and brought to life the worker co-operative model.

As Nissen (2003) argues, either model, MGU or SMU, can provide new potentialities for labour unions. The MGU model works best with an employer engaged to see the union as a partner. The SMU model connects the labor union to a larger social movement and can provide significant support to the union from outside. Both models, however, require a paradigm shift on the part of union leadership. In terms of the union-co-op model, a merger of the models into a Value-Added/Social Movement framework would work well within a worker-owned organization.

Post script: I wrote this a couple of years ago before the 2016 Presidential election. That election demonstrated the limitations of electoral politics to the labor movement. What one administration gives, another can take away. A responsive government requires more than voting, but constantly working to move the needle. The recent advance of the Main Street Employee Ownership Act comes from a lot of hard work and a recognition that the worker ownership in particular and the labor movement in general needs to engage elected representatives from a non-partisan position. Worker ownership has always been part of the American landscape (Blasi,  2013). Of course, slavery has also been part of the American labor system and continues in the form of the prison-industrial complex. Navigating these competing cultural attitudes about labor in the U.S. (ownerhsip by worker vs ownership of workers) that engage institutional  systems racism makes the ability to engage in the electoral field difficult and rife with contradictions.

Next Week: the “new” worker c0-ops

 

Blasi, J. Freeman, R. (2013) The Citizen’s Share: Putting Ownership Back into Democracy. Yale University Press, New Haven.

Bruner, M. S. (1989). Symbolic Uses of the Berlin Wall, 1961-1969. Communication Quarterly, 37(4), 319-328.

Chaison, G. (2006). Unions in America. Thousand Oaks, London, New Delhi: SAGE Publications.

Devinatz, V. G. (2008). Social-Movement Unionism and U.S. Labor’s Uncertain Future. Journal of Collective Negotiations, 32(3), 203-213.

Duff, M. C. (2014). ALT-Labor, Secondary Boycotts, and Toward a Labor Organization Bargain. 63 Catholic University Law Review, Summer.

Eidelson, J. (2013). Alt-Labor. The American Prospect.

Farber, H. S., & Saks, D. H. (1980). Why Workers Want Unions: The Role of Relative Wages and Job Characteristics. Journal of Political Economy, 88(2), 349-369.

Fine, J. (2005). Worker Centers: Organizing Communities at the Edge of the Dream. Retrieved from

Hirsch, B., & MacPherson, D. (2012). Index of Tables: Union Membership and Coverage. Retrieved from http://www.unionstats.com/

Jamieson, D. (2016). These Jimmy John’s Workers Were Fired Illegally. Five Years Later, They Might Get Their Jobs Back. Huffpost Business. Retrieved from http://www.huffingtonpost.com/entry/jimmy-johns-union-fight_us_5707e5f4e4b0447a7dbc2d17

Klein, N. (2000). No Logo: Taking Aim at the Brand Bullies (Canadian ed.). Toronto: Vintage Random House.

Klein, N. (2007). The Shock Doctrine: The Rise of Disaster Capitalism. New York: Metropolitan Books.

Meyer, R. (2016). Precarious Workers’ Movements and the Neoliberal State. Working USA: The Journal of Labor and Society, 19, 27-55.

Nissen, B. (2003). Alternative Strategic Directions for the U.S. Labor Movement. Labor Studies Journal, 28(1), 133-155. doi:10.1177/0160449X0302800107

Reagan, R. (1987). Address from the Brandenburg Gate (Berlin Wall) (June 12, 1987). Retrieved from http://millercenter.org/president/speeches/speech-3415

Williams, R. H. (2016). Soliloquy. Monday Morning Memo. Retrieved from http://www.mondaymorningmemo.com/newsletters/soliloquy/

[1] The Reagan Era includes 1981-1993 since his Vice President George H. W. Bush succeeded him and many of the policies remained in place. George W. Bush’s two-terms only saw union coverage drop by 8%.

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Labor and Co-ops: Beginnings

part 2 of a series

Early Unionist Movement and Co-operatives

The first inception of the labor movement in the United States looked little like today’s organizations. The National Labor Union and the Knights of Labor did not seek to engage in contractual relationships with employers (Chaison, 2006; Leikin, 2005). During this era, the nature of work and the worker was in a great transition, but the itinerant worker was often in the format of the old guild system of apprentice or master. People who worked for others generally were doing so on a specific job or contract basis or they engaged as an apprentice to learn the trade (Chaison, 2006).  Employees were a special lot: often seen as lacking the will and moral basis to work for themselves or suffering from a disability and unable to engage control over their own life (Jacques, 1996).

It is the role of the Knights of Labor and other similar unions that provides a touchstone for this study. These workers came together to create a work place with better wages and dignity by competing with their former bosses. Rather than fight with the owners of capital for a share of the profits produced with their labor, they organized their own company where they controlled the means of production (Fink, 1985; Hogler, 2004). The response of the capitalists was mixed. Some larger organizations support the Knight’s work and even joined the Knight of Labor in order to be engaged with these workers. Others, however, conspired to undermine these workers owned factories by working with the owners of the railroads and stores to deny space on the trains and shelves.

Although the Knights of Labor did not believe in an adversarial relationship with the owners of the factories, often opposing strikes and similar actions (Blasi, Freeman, & Kruse, 2013), they did see “an inevitable and irresistible conflict between the wage system of labor and the republican system of government” (Fink, 1985p 4). When possible, they pushed for higher wages, but generally they saw the path forward through worker ownership of the new factories. As the push for concentration of industry changed the nature of work from itinerant worker to employee, the Knights saw ownership as the key to achieving the promise of America and Republican ideals (Fink, 1985; Leikin, 2005). However, the economic forces were arrayed against them and internally, they were unable to take the necessary steps to support each other’s operations either with capital or managerial expertise.

References:

Blasi, J. R., Freeman, R. B., & Kruse, D. L. (2013). The Citizen’s Share: Putting Ownership Back Into Democracy. New Haven & London: Yale University Press.

Chaison, G. (2006). Unions in America. Thousand Oaks, London, New Delhi: SAGE Publications.

Fink, L. (1985). Workingmen’s Democracy: The Knights of Labor and American Politics. Urbana and Chicago: University of Illinois Press.

Hogler, R. (2004). Employment Relations in the United States. Thousand Oaks, London, New Delhi: SAGE Publications.

Jacques, R. (1996). Manufacturing the Employee. London: Sage Publications.

Leikin, S. (2005). The Practical Utopians: American Workers and the Cooperative Movement in the Guilded Age. Detroit, MI: Wayne State University Press.

Next: The Rise of the Employee and Craft Unionism

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Labor Unions and Worker Co-ops: Today and Yesterday

Note: the post in this series resulted from work towards a larger research project that has since been abandoned. I will be turning two of those chapters into posts that will run on Tuesdays for the next several weeks under the category “American Dream”. It is, in essence, an unfinished work, so keep that in mind as you are reading.

I hope to read your comments!

part 1 of a series

The Development of the Labor Movement in the United States

From the earliest days of the Republic the rights of workers within the work place has been a subject of debate between the Federalist and Jeffersonian wings of the national discourse when efforts to rebuild New England’s shipping and fishing industry after the revolution included consideration for the sailors along with the shipbuilders (Blasi, Freeman, & Kruse, 2013; Nelles, 1932). The debate between the relative rights of capital and labor in a Republic has continued with periodic shifts from one side to the other. The last major shift notably occurred in 1981. US President Ronald Reagan responded to a strike by PATCO, a labour union that represented the nation’s air traffic controllers. Reagan’s response ushered in a new era of labor relations in the United States that ended the “great compromise” between labor and owners that had existed for the previous thirty years (Storch, 2013) . His actions in replacing the strikers were legal under the National Labor Relations Act (as amended by the Taft-Hartley Act); however, it had been a rarely used option. Reagan’s actions were a signal to the nation’s corporation that they would have greater reign to undermine labor unions (Hogler, 2004). Following this action was the liberalization of capital under agreements such as the North American Free Trade Agreement and the World Trade Organization that allowed capital to move operations across national borders rather than negotiate with local workers (Chaison, 2006; Hartmann, 2011; Storch, 2013). This created a downward spiral in the United States labour movement resulting in diminished membership and power regardless of the political party in control (see figures 1-3).

 

 

 

Figure 1: Union Density 1964 source: (B. T. Hirsch, Macpherson, & Vroman, 2003)

Figure 2: Union Density 1984 source: (B. Hirsch & MacPherson, 2012)

Figure 3: Union Density by State 2014 source: (B. Hirsch & MacPherson, 2016)

The “Wagner model” of collective bargaining ushered into law during the Great Depression and America’s “New Deal” represented an industrial environment with large factories employing thousands of workers at a single facility such as Western Electric’s Hawthorne plant, or the “Big Three” automotive plants in the Detroit metropolitan area (Hogler, 2004). By the end of the 1990’s these large factories had become part of America’s industrial history having been replaced by smaller assembly plants, robotics, and computerized operations along with a move of the more labor intensive work to oversees locations that could quickly move based on the value of local labor. As Naomi Klein (2000) documents in No Logo, many US corporations quit manufacturing goods such as shoes and clothing (in the example of Nike and Levi Strauss and Co.) and switched to marketing their brand with all operations sub-contracted to corporations in the developing world where labor costs could be reduced to almost nothing.

The vacuum in the labor movement created by the retreat of organized labor created an opportunity for a different form of labor organization in the form of worker co-operatives. Worker Co-operatives are corporations in which the people who provide labor also own the company. These organizations can be quite small (a three person bike shop) or quite large (a three thousand member home-care co-operative). The defining characteristics that these organizations engage in revolve around the co-operative identity of “one member one vote” (“Statement on the Co-operative Identity,” 1995). Workers generally create a corporation with a board of directors that acts on the mutual interests of the workers as owners and employees.

The publishing of Adam Smith’s Wealth of Nations in 1776 generally marks the beginning of the era of the capitalist economy[1]. The shift in production from cottage industries and the guild system that represented the urban economy of the feudalist period to the centralized production and horizontal organization of the new “for profit” corporations brought with it a fundamental change in the social contract connected to the exchange of wealth. With this change came a new concept of competition and the value of work.

For many, the new world order ushered into being in the late 1700’s was a catastrophe. As the nature of workers transitioned from independent operator to employee, the workers lost their ability to control their lives economically and, quite often, politically. The push back brought the rise of both the Trade Union Movement and the Co-operative Movement, both originating at the central of the new disruptive capitalism: Manchester, United Kingdom (Birchall, 1994; Fairbairn, 1994). This was not an accident. The two movements have been linked for good reason in that they attempt to embrace a market economy in a method that elevates individuals and replaces the profit motive with the concept of human dignity. These attributes have been the core of both movements since their founding.

The industrial revolution in the United Kingdom occurred several decades prior to a similar revolution in North America. That revolution began intellectual movements that would have an echo in the United States as it industrialized and transitioned from an agrarian economy providing raw materials to the manufacturers of Britain into a nation of industrialists and producers[2]. This new world order became, in many ways, a hot war between the industrialists of the north and the Agrarian of the south (who depended upon slave labor), but it also created a discussion about the nature of work in the United States (Jacques, 1996). For many, the Civil War of the United States replaced chattel slavery with wage slavery. It began the industrialization of the workplace that transformed the independent worker into an employee.

While in the UK, those engaging in unionism (and to some extent co-operation) were deemed anti-establishment; the environment in the United States was more open. Unionist in the UK could expect deportation to Australia and banishment (Birchall, 1994; Thompson, 1994), while workers in the United States found inspiration and support through the constitution (Perlman, 1970). Commonwealth vs. Hunt (1842) provided critical legal protection to labor union activity in that it did not presume the collective actions of workers to be a conspiracy (Chaison, 2006). This allowed workers to organize to seek higher wages and better working conditions provided that they did not violate other laws in their pursuit. The ruling was a victory for Jeffersonian ideals in that it allowed workingmen to balance the power of the new capitalists although it did not go so far as to keep government out of the fray (Nelles, 1932).

[1] Of course, 1776 also marks the beginning of the democratic era with the adoption of the Declaration of Independence by the American colonies, which will be explored more thoroughly in Chapter 4.

[2] Adam Smith’s early writing such as the Theory of Moral Sentiments clearly influenced American thinkers such as Thomas Jefferson (Ganter, 1936).

References:

Birchall, J. (1994). Co-op: The People’s Business. Manchester: Manchestur University Press.

Blasi, J. R., Freeman, R. B., & Kruse, D. L. (2013). The Citizen’s Share: Putting Ownership Back Into Democracy. New Haven & London: Yale University Press.

Chaison, G. (2006). Unions in America. Thousand Oaks, London, New Delhi: SAGE Publications.

Fairbairn, B. (1994). The Meaning of Rochdale: The Rochdale Pioneers and the Co-operative Principles. Occassional Paper Series,  (94-02). Centre for the Study of Co-operatives, Saskatoon, SK.

Ganter, H. L. (1936). Jefferson’s “Pursuit of Happiness” and Some Forgotten Men. The Willam and Mary Quarterly, 16(4), 27.

Hartmann, T. (2011). Rebooting the American Dream: 11 Ways to Rebuild our Economy. San Francisco: Berrett-Koehler.

Hirsch, B., & MacPherson, D. (2012). Index of Tables: Union Membership and Coverage. Retrieved from http://www.unionstats.com/

Hirsch, B., & MacPherson, D. (2016). Union Membership and Coverage Database from the CPS. Retrieved from http://unionstats.com

Hirsch, B. T., Macpherson, D. A., & Vroman, W. G. (2003). Estimates of Union Density by State.  Retrieved May 21, 2016 http://unionstats.gsu.edu/MonthlyLaborReviewArticle.htm

Hogler, R. (2004). Employment Relations in the United States. Thousand Oaks, London, New Delhi: SAGE Publications.

Jacques, R. (1996). Manufacturing the Employee. London: Sage Publications.

Klein, N. (2000). No Logo: Taking Aim at the Brand Bullies (Canadian ed.). Toronto: Vintage Random House.

Nelles, W. (1932). Commonwealth v. Hunt. Columbia Law Review, 32(7), 1128-1169. doi:10.2307/1116199

Perlman, S. (1970). A Theory of the Labor Movement. New York: Augustus M. Kelley.

Statement on the Co-operative Identity. (1995). Retrieved from http://ica.coop/en/whats-co-op/co-operative-identity-values-principles

Storch, R. (2013). Working Hard for the American Dream: Workers and Their Unions: World War I to the Present. Oxford: Wiley-Blackwell.

Thompson, D. (1994). Weavers of dreams : the origins of the modern co-operative movement. Davis CA: Center for Cooperatives University of California %@ 9781885641052 %7 150th anniversary ed.

Next: Early Unionist Movement and Co-operatives

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Welcome Back!

Due to being too busy with a number of things in my life, I completely missed that my domain name lapsed. A pirate company squatted on it and the site is “for sale”. I decided that it wasn’t worth haggling with the squatter and I really had been thinking about changing the domain for a while anyway.]

The domain now matches the site name! Yay!

I also finally managed to figure out how to fix the media library. I’m back!

I have updated the links, pictures, and will be populating the other pages as I get around to it.

Hopefully people will find their way back to this site and find it a useful resource again!

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Capital Homecare Cooperative

I’ve been working with a group of caregivers and community members in Olympia for almost four years now. Through a number of starts and stops, they have been working towards creating a home care cooperative in Olympia, Washington.

 

The co-op incorporated in August, 2016 and recently received their license to provide home care in Thurston county.

I made a short video with two members who have been working hard to get the agency up and running:


 

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Reflection #541–power of individuals in cooperation

In returning to this blog, I am also returning to a long-abandoned project. A couple of years ago, I began discussing the inspirational messages from Don José María Arizmendiarrieta, the spiritual founder of Mondragón and, in many ways, the modern worker co-operative movement.

His messages, published as Pensamientos by Cherie Herrera, Cristina Herrera, David Herrera, Teresita Lorenzo, and Virgil Lorenzo. You can read them at the web site celebrating Arizmendiarrieta’s Centennial.

“Cooperativism fundamentally is an organic process of experiences, characterized precisely for the subservience to moral values and for the prevalence of human beings as such over all other factors more or less instrumental in every process and economic activity.” 541

Often these days, the term snowflake gets bandied about quite a bit, often pejoratively (and its history as an insult is rather amazing and frightening). I first started hearing it in 2012 referring to worker co-operatives. The idea of a “snowflake” in the co-op world being that worker co-ops act as if they are these unique organizations in terms of their experience–so unique that the ability to learn from others is limited.

I’ll certainly admit to being guilty of this sentiment earlier in my co-op career. It isn’t just a feeling of superiority, but also one of isolation. As the worker co-op network in the US has developed over the last 10-15 years, that sense of isolation has largely disappeared. The network of co-op development centers, the US Federation, and local networks has created a strong community of cooperators that welcomes people into the movement with warm support.

The danger, one which I see abating, has been to dismiss the individuality of worker co-ops in favor of creating easy to manage development practices. I have often worried that creating institutionalized responses may negate the individuals involved in the process. Each co-op that I have worked with has similarities and differences. They link around the co-op identity, effectively the moral values that Arizmendiarrieta refers to, but each co-op, no matter the isomorphic forces at play and cultural similarities engaged by the industry create the co-op’s own culture based on the individuals who created it and who engage with it.

The humanity of our co-ops makes them unique, frustrating, and loveable. The power of snowflakes united in strategy can be truly sublime–no less in the union of human passion, knowledge, and individuality put to a common purpose. It is the heart of the cooperative’s power.

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Greg MacLeod’s Legacy

This morning the Canadian Association for Studies in Co-operation sent out a notice (below). For those of us in the Master’s program at St. Mary’s we knew his work From Mondragon to America: Experiments in Community Economic Development (1997), which provided a major update to the Whyte’s Making Mondragon and Morrison’s We Build the Road as We Travel. He was one of the first to bridge the Atlantic and discuss how that Basque experiment could be brought to these shores.

In Memoriam: Dr. Greg MacLeod

The Canadian Association for Studies in Co-operation/L’Association Canadienne pour les Études sur la Coopération (CASC/ ACÉC) mourns the May 3, 2017, loss of a great co-operator, friend, priest, academic, and activist, Dr. Greg MacLeod, who leaves a remarkable legacy of innovative institutions and actions based on both Christian social teachings and principled entrepreneurial thinking within and beyond his beloved Cape Breton.

Ordained a Catholic priest in 1961, Greg MacLeod was a founding member of the Department of Philosophy and Religious Studies, Xavier College, where he started teaching in 1963. After completing doctoral studies in philosophy at the University of Louvain in Belgium, he went to Oxford University for post-doctoral studies before returning to teach at Xavier College in 1969.

He was among leaders who worked hard to transform Xavier Junior College into the University College of Cape Breton (now Cape Breton University [CBU]) and to promote Mi’kmaq studies there. He retired from the university in 2001, although his remarkable work ethic and commitment to action remained unabated even in his final days. As recently as April 2017 he added TriCouncil funding to the $1 million he had already earned.

When Cape Breton faced an uncertain future with declining fish stocks and the closure of coal mines in the 1960s, Father Greg mobilized resources in the university and in the community and galvanized people to build capacity and ensure economic resilience and sustainable livelihoods for community members.

Founder and former director of the Tompkins Institute for Human Values and Technology at CBU, a leading authority on community economic development, member of the Order of Canada, and recipient of honorary degrees from Dalhousie University, The Atlantic School of Theology, and Saint Francis Xavier University, Greg MacLeod was a long-time friend and supporter of CASC/ACÉC.

He was winner of the 2011 CASC Award of Merit—a surprise for Greg who had just presented his keynote address on how throughout his career he had managed contradictions and divisions concerning social economic reform: “Theory versus Practice”; “Idealism versus Pragmatism”; “Profit making business versus non-profit business,” and so on. He wanted both to change the world and make a difference at the local level; he was an academic who would become an activist for the benefit of the community, putting theory into practice.

The award was presented to Dr. MacLeod at the CASC-ANSER banquet on June 2, 2011, by his good friend Ian MacPherson who concluded, “You cannot separate Greg from Cape Breton. He is as much a person of place as anyone I know. His commitment to his community and to the island where it is found enfolds his life’s work.” When Cape Breton faced “a crisis of economics,” it was also “a crisis of ethics and values” for this “chief modernizer of the theories of economic and social development associated with the Antigonish Movement.”

In support of his community work, Dr. MacLeod founded BCA Community Venture Finance Group, a CED investment fund that raised over $2 million in community investment, and New Dawn Enterprises, Canada’s oldest community economic development corporation and founding member of the Canadian CED Network. In 1983, he founded New Deal in Sydney Mines, Greg’s hometown where some of his family still lives, “to come up with new approaches,” as he put it, “suited to community survival in the future by designing new ways of doing business.” New Deal is involved with many projects including the development of several housing co-ops.

Committed to local ownership and control, he was a champion of place-based development.

Greg’s publications include From Mondragon to America: Experiments in Community Economic Development (1998) about the worker-owned industrial co-operative based in Spain, and New Age Business: Community Corporations that Work (1986). Influential in Mexico and around the world, his work has been translated into Spanish, Japanese, and Korean.
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Today, the legacy of Dr. Greg MacLeod is clear not only in the institutions he founded but in the CBU’s Master of Business Administration program based on his research on community economic development as well as in the ongoing commitment of CBU faculty engaged in “community-oriented research” with the Tomkins Institute, a laboratory and incubator for alternative models of the social economy.

Greg MacLeod, his energy, ethic, and vision, will be sorely missed.

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