Internal Functioning Rules of Worker Co-operatives

Worker co-operatives, by their nature, focus on the internal dynamics. While this may sometimes devolve into navel gazing that can be dangerous to their ability to compete, the internal functioning of a worker co-operative defines it from ESOPs, partnerships and other competitors.

It shouldn’t be a surprise, then, that the CICOPA World Declaration on Worker Co-operatives devotes a significant part of itself to the internal functions of a worker co-operative. Upon reading them, I am reminded of the mandate from Sidney Prohibuschy (a Canadian Co-operator): Co-operative must not engage in exploitation.

Self-exploitation is the demon of worker co-operatives. Sometimes, we choose survival over purity; however, we often mistake exploitation as self-sacrifice. Paid hours and volunteer hours need to be defined carefully. It might be one thing to volunteer time at a membership meeting or a committee, but true labor for the operations should never be considered part of volunteerism.

The Declaration establishes eight clear rules for the internal functions of a worker co-operative:

  1. Compensation must be equitable with the aim of reducing the difference between the highest and lowest paid.
  2. Operations must contribute to the increase of capital and growth of funds. This is essentially stating that the co-operative must operate in a manner that is financially sustainable.
  3. The workplace must be humane, it must be ergonomically correct. It should enhance the ability of workers to have decent working conditions.
  4. In addition to equitable compensation, the social security of workers must be protected (this means a wide variety of things from health care to pensions, to time off).
  5. Democracy must be the key word and have a presence throughout the co-operative.
  6. Education, Training and Information will build the capacity of the membership to govern themselves and to find innovative solutions to collective problems.
  7. The worker co-operative must focus on the member and the member’s immediate family as well as the sustainable development of the community as a whole.
  8. Worker Co-operatives cannot become substitutes engaged to exploit other workers. They cannot be scabs to the labor movement. They must act in a way to bolster the labor movement, to be a wage and benefit leader in their industry. They should act in a way that forces their competitors to increase their wages and benefits, not as a seems to undercut other workers.

Of course, I paraphrased most of this. Please read the Declaration for yourself (and I hope that you already have and refer to it while reading this discussion.

For me, the most interesting parts of this section are points six through eight. However, the most interesting is the seventh rule. Often, in US worker cooperatives, there is a presumption that benefits should only focus on the individual, not the family. As someone who has described himself as a “non-breeder”,  I have certainly been an advocate of that position. Healthcare provides a great example of the dilemma. The cost for individual coverage is manageable, however the cost for partners and children quickly creates astronomical increases. The ability of a worker co-operative to provide decent healthcare can be undermined by also providing for family care. This creates a natural division between those that have family and those that don’t: the breeders vs. the non-breeders. Here is the non-breeder argument: Why should single members subsidize the cost of health care for those who chose to have children? People who chose to have kids should pay the extra costs related to having kids and not expect others to pay for their costs. For those with kids, the argument might be that worker security depends on a quality homelife. Healthcare is a human right. While the government may not acknowledge that, the worker cooperative should recognize that security of health is a worker issue. Workers cannot perform and give their all at work if they are worried about their family’s health. Cooperatives are a social economic engine and the family unit is a key part of society. Tomorrow’s members are, in many cases, the children of present day members. They deserve support as they will be supporting us when we are old and unable to work.

It is a difficult part of the equation, in the United States, because health care is so incredibly expensive. This rule, also touches on so many other areas. Co-operative need to consider means to support everyone that depends on them. Yes, people with children chose to have children, but children are also the future.

The eighth rule also points out the universality of worker co-operatives. We are part of the labor movement. I would even argue that we are the future of the labor movement! We cannot exploit other workers or destabilize their workplace. If we engage in an enterprise, we must make sure that set the lead on wages and benefits for our industry. We should never cross a picket line during a bonafide strike (or at least without the expressed permission of the labor union).

The sixth rule means that we need to elevate our membership. We cannot accept a board of directors ignorant of basic economics and finances. We shouldn’t accept that from the membership either. Don José María Arizmendiaretta, the spiritual founder of Mondragon, famously said that worker co-operative are either an economic movement based on education or and educational movement based on economics. We exist to create a quality of life for our members and to enhance our communities. Part of the strategy to attain that goal must be education of the membership. Not only should our members learn about economics, finances, and customer service, they must also learn about problem solving, conflict resolution, and a host of other disciplines (Union Cab has offered some training in SSL (Spanish-as-a-Second Language).

I think that the other rules speak for themselves. Utlimately, our work places should be the best. We may not make the lists of the “best places to work” because of how those lists make the determination. The point is that we collectively own our workplace and it should be a humane and friendly workplace to everyone and their families. The ergonomics of the workstations don’t need to “first class” in the sense of frivolous amenities, but they need to be functional, safe, and comfortable. The compensation should be fair and equitable. The voice of the workers should be heard throughout the organization. We should have established programs to promote and develop the next generation of leaders. Last but not least, we need to ensure that the co-operative will exist into the future to give those leaders a great place to work.

Next Week: Relations Within the Co-operative 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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