Worker Co-operative Development–the Basque Way

Another post from 2007 and the Mondragon Trip.

Today, we listened to folks from Elkar-Lan S. Coop. This is a secondary cooperative made up of two cooperative federations and an cooperative advisory board to the Basque government. Their primary mission is to help worker cooperatives come to fruition. This is not a Mondragon organization. While the cooperatives that they create might end up joining in with Mondragon, there is no expectation to do so. Elkar-Lan provides assistance from drafting of incorporation statements (articles and by-laws) to feasibility studies. Their services are free; however, they stress that they exist to help cooperatives be cooperatives. They encourage and even demand that people use business incubators for the operational side of the business. Part of this is to not compete with the for-profit or even not-for-profit business incubators.

As part of their service, they will provide a staff person to work with a cooperative up to one year into operation. Again, it is for the cooperative (democratic) end of the company. They will help with training people on the methods of running meetings, social councils, and engaging in the meaningful discussion required of democracies.

This is an incredible resource. While the USDA provides similar services to rural areas in the United States, it is great to see such a wonderful and proactive organization. They actually mail out circulars to 15,000 businesses to year encouraging them to convert to cooperatives if they are planning retirement! Since their inception four years ago, they have helped to create and average of 35 Worker Cooperatives per Year!

Of course, part of the reason that they are so successful is that they are in the Basque Country. Here, people really believe in worker cooperatives in a way that would even make their heads spin in San Francisco! One of the major challenges to our movement is not heart, spirit or even knowledge. It is capital. Here is what the Basque Government does:

The law creates the following minimum effort to create a cooperative:

•Conform to the Basque Cooperative Law
•Have at least three people
•Have a minimum of 3,000 Euros (roughly $4,200)

The Basque Government will provide, as a grant, up to 3,000 Euros per worker (up to a total of 30,000 Euros per cooperative).

For workers who have become unemployed, they can have their entire unemployment benefit paid as a lump sum only if they use the money to start a worker cooperative.

So, ten unemployed workers can pool their unemployment and get an additional 30,000 Euros for start up capital.

God, I thought that the Canadians had it good! This is a government and a community that really understands the value of worker cooperation and puts their money where their heart is.

Tomorrow, we see Mondragon’s incubator and visit the spot where it all began: JMA’s original school. Ground Zero of the modern worker cooperative movement.

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-ops in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University.
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