Last month, I flew to Washington DC for a day to represent the US Federation of Worker Cooperatives as a member of the organization. The event was a series of meetings on Capitol Hill sponsored by the American Sustainable Business Council (ASBC). We met with staff from US Representative Chaka Fattah (PA-2), Senators Harkin (IA), Franken (MN), Warren (MA) and Bennett (CO) from the Senate Committee on Health, Education, Labor and Pensions (HELP). We wrapped up the day with the main event: a meeting with Assistant Secretary of Labor (Employee Benefits Security Administration) Phyllis Borzoi. Along with me, representing my coop and the USFWC was Joe Rinehart with the USFWC, and representatives from Eileen Fisher, Dansko Shoes, and New Belgium Brewing. The latter organizations are all 100% worker owned Employee Stock Ownership Program (ESOP) enterprises. We also had people from the National Coop Business Association and Mondragon USA.
It was, as the title suggests, a Big Tent for worker ownership.
It so happens that I am reading The Citizen’s Share (Blasi, Freeman and Kruse) right now. This book chronicles the varied and rich history of worker ownership in the United States from the earliest days of the revolution until today. It notes that 47% of US businesses have some sort of worker ownership from the 100% owned companies named above to Google and Microsoft in which all workers have the opportunity to participate in the risk of the company (apparently Bill Gates’ ownership stake is now only 6% of the company he founded). The message of the day was to discuss the importance of worker ownership as a sustainable model for economic growth in the United States.
I enjoyed this group and the approach. Too often, the concept of sustainable business only gets used to discuss environmental issues such as climate change. The plight of modern day employees tends to be ignored. This allows organizations engaged in Union busting tactics to present themselves as good corporate citizens. I would argue that sustainability (both for the climate and the economy) can only occur if workers are treated well and get a share of the pie that they create.
ASBC’s role is to bring together the worker owned businesses and unite the ownership movement. One of the problems is that there are some bad actors that use the image of worker ownership without providing the benefits to the workers. This is not unique to our country, but the lack of Federal understanding of worker ownership and a corporation laws that vary from state to state make it difficult to understand when workers really benefit from worker ownership.
For example, the US government clearly recognizes ESOP, but has no understanding or definition for a worker cooperative. The USDA recognizes Producer Coops and this language tends to be used by the IRS to determine if a business is a cooperative for federal tax purposes. ESOP really aren’t a type of business as much as they are a retirement plan. That is an important distinction between and ESOP and worker cooperative (and an area where the two concepts could create a lot of synergy). Ass’t Secretary Borzoi remained skeptical from her experience policing ESOPs that have used the structure to evade the Fair Labor Standards Act, but was impressed with the group at the table.
In January, we began a discussion with the Federal Government about worker ownership in the modern economy. It was clear to all of us (at least in the practitioner world), that the Wagner model of industrial relations has become outdated. We need new rules and definitions that help guide a national economy in which cooperatives and ESOPs operate across state lines (thus triggering Federal oversight) and engage in worker ownership and control of the workplace. We need to create laws that address a large workplace in which the workers really control the means of production through a one-worker, one-vote method (regardless of the type of organization). We, in the coop world, also need to strengthen the social definition of worker cooperatives (promote the CICOPA Oslo Declaration) and raise our profile. We can’t and shouldn’t be constrained by the legal definitions of the individual states. A democratically run ESOP with 100% worker ownership (even with workers having different shares of ownership) is as much a cooperative as Ch. 185 coop in Wisconsin with only 60% of its workers as members.
My only disappointment was that we did not meet with any GOP connected staffers. I truly believe that our movement is non-partisan and resounds with all of the political parties in this country (major and minor). If we are building a big tent, it will be necessary to look beyond party labels.