Consumer Co-ops and Workers

The role of workers in a consumer co-operative (and how the co-op interacts with them) has as many variations as one would expect for a community based economic movement. Some co-operatives (thought not many I expect in today’s world) bar workers from being members. Some may allow membership but not board representation, or may limit their board actions to only those of “member” but not worker (as if people can split themselves in that way).Others might allow workers (who are members) to exist without restraint.

One could certainly take the view that the co-operative exists for its members and to benefit its members through access to the commodity goods and services that the members want at prices that they can sustain. In this respect, the employee relations in a consumer co-operative may be no different (nor should they be) than any other enterprise operating in the same marketplace. However, I think that is a mistake (and I imagine that most consumer co-op people see it as wrong as well). The Co-operative Paradigm requires something different. It requires that co-operatives be leaders in their community. In the case of consumer co-operatives, how they treat their workers has a lot to do with how the community sees them. After all, it seems a bit wrong to sell “fair trade” coffee in a store that pays less than the area’s living wage to its own workers.

How do consumer co-operatives work to minimize the exploitation of the workers?

I think that the key method must involve viewing the co-op’s workers as key stakeholders in the enterprise whether or not they are actual members. This means seeing as more than “human resources”; it means seeing them as fully developed humans and partners in the co-operative’s mission. By embracing the workers as partners, it should lead to a revisioning of the relationship (which may lead to a multi-stakeholder model such as Mondragon’s wildly successful Eroski chain of supermarkets and retail outlets).

This doesn’t mean allowing one or two seats on the board to be held by workers as long as they promise to vote against their interests as workers.

I would suggest (short of becoming a multi-stakeholder) that it may mean encouraging unionization of the workforce. With a labor union, the workers would be able to speak with a single voice just as the membership speaks through the voice of the board of directors. It would help to create a better power balance in the workplace. Of course, labor unions cannot be imposed on a workforce, they need to be invited in by the workers, not the managers. This takes a perceived need (and, to be frank, many workers in the service and retail industry have been ignored by labor unions for so long, they may not even see them as an option any more).

Even without a labor union, consumer co-ops can do other things. One consumer co-op in my area has created an employee advisory board to provide assistance on policy development to the General Manager. Another means would be to create a truly independent appeals process for discipline and dispute resolution. Co-ops could even create semi-autonomous work teams that would flatten out hierarchy by repowering workers to control their work lives within the policies of the board (interestingly, Whole Foods does create teams and took this idea from the Austin food co-ops).

Ultimately, the power relationships within the co-operative need to be understood and equalized. The relation between consumers and workers should be one of co-existence not dominance by the consumers. Consumer co-ops completely fail when they simply mirror their competitors in structure and think that they are doing it right. It is kind of like watching children sneak into the grown-up table at Thanksgiving. No matter how good their manners, they are still playing “grown-up”.

Co-ops require more management (and more experienced management) than a traditional business. For one, the stakeholder issues get more muddled. Two, in addition to the normal market pressures, the democratic structure must also be addressed. Finally, the management of people has to be done in the same spirit of the co-operative values and principles as everything else. As I referred to earlier, it is the height of hypocrisy to promote Fair Trade for distant farmers and treat the workers in the store as wage slaves. The workers in a consumer co-operative do not exist as resources but as stakeholders and partners in the co-operative.

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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