Worker Co-ops and the American Dream, part 6

The Union-Co-op as a Pathway to Restoring the American Dream

As the effects of the Great Recession linger even ten years later, Americans seek new avenues to meet their needs and desires. The labor movement has largely been fighting a rear-guard action leaving the successes of the labor movement to the burgeoning worker co-operative models and social movements that focus on political victories and fall outside of the regulatory burdens of the NLRA. Likewise, modern management has taken notice that to attract quality employees, requires a language that speaks to both the monetary and social values. This has led to “decentralized participative governance structures” (Marshall, 2005), but it has also allowed the language of ownership to be co-opted through the “sharing economy” that engages workers as partners rather than employees, but creates a system that extracts wealth from both the worker and the consumer.

Through either company ownership or union representation, workers can achieve higher pay through wages and benefits, and also through a share of the profits generated. This provides one piece of the puzzle, the part of the American Dream that promises wealth, comfort, economic mobility for oneself and their children. By combining the worker co-operative model, with the movement’s values, ethics and principles, workers develop the other half of the Dream. They can build their sense of social community and class-consciousness. This model not only provides them the ability to meet their material needs, but it makes them better citizens by engaging in a democratic economic model.

Worker ownership, by itself, requires that workers engage their workplace as both owner and employee. Worker cooperatives may end up creating more work for people without the perceived economic reward. Not everyone wants to be a hands-on owner. For many, it is enough to have a job with decent pay in a healthy workplace. Attending meetings after working all day doesn’t necessarily attract people. When organizations reach employment in the hundreds or even thousands, it would be impractical for everyone to engage in meetings. In many of these larger co-ops, some form of representative democracy must take hold.  Even dynamic governance methods such as sociocracy become limited if the circles get too big.

Growing co-ops to scale with the market or the community may create political polarization within the co-operative among the membership. As a co-operative grows, the organization may lose the sense of ownership and this can lead to destructive behavior from both the management and employee perspectives (Kasmir, 1996). However, if worker ownership can only exist at a small level (100 workers or less), it can never really be more than an economic asterisk and the model’s overall effect on building a more just world let alone achieving the American Dream will minimal.

The labor union, in a sense, allows worker co-operatives to reach a size to achieve the economies of scale while providing a means to keep focus on the social needs of the workers and the social aspect of the organization’s mission. By utilizing a partnership with an outside organizing body (but comprising of the members of the co-operative), worker co-operatives create a watchdog organization that can act as a break on the excesses of profit-driven decision making. Without this engagement, the individual member/worker can be lost in the data on productivity, profit, and return on equity. Recently, such a scenario erupted in Evergreen Co-operatives[1] in Cleveland, Ohio which had been praised for its ability to grow to scale with industrial laundries; however, the governance and decision making left workers on the outside of key decisions that saw massive lay-offs and pay cut by 50% without any input from the affected workers (Davis, 2016).

As organizations increase in size, the tendency for isomorphic behavior increases even co-operative based organizations. The struggle to maintain the values and principles becomes more difficult as the community becomes larger. The role of the labor union can create contractual language to assure that these values remain front and center. This creates the synergy of the two, but also requires that both organizational models engage a new paradigm of work. The worker co-operative model needs to get beyond a “do-it-yourself” mentality and recognize that some issues require outside assistance. Likewise, the labor unions must resist the temptation to engage worker co-operatives in the traditional antagonist model that the NLRA has established.

Labor unions, like cooperatives, exist to serve their members. As such, they can also be too materially focused. Beyond the scope of this essay, the historical unwillingness of labor unions in the United States and Canada to avoid issues of social justice and focus on the material needs of their members has, itself, a long history. Worker Cooperatives, while generally about creating good jobs, also have a social justice aspect to them. Thus, the interplay between these two organizations with a combined mission of social justice and economic opportunity provides a promise to engage in a form of dance that keeps the American Dream’s aspects in balance. One might imagine a cooperative whose elected board focuses too much on social justice issues (to the detriment of the business) will be reined in by a labor union concerned about falling wages and benefits. Likewise, an elected board focused too heavily on profits and growth, to the exclusion of social justice within the cooperative, might find the labor union engaged to speak for the members who feel left behind. At other times, the leadership of both organizations may be working in the same direction to channel membership energy in order to achieve either a unique social justice or economic growth goal for the organizations. This dynamic can help break up the isomorphic effects on both organizations through their different expressions of the antenarrative of the American Dream.

The American Dream began as an answer to the closed aristocratic societies in Europe. It promised a new method of governance in a new world. Since the advent of Americanism, democracy, in many forms, has swept across the globe. The noble experiment began in 1776 no longer exists in a vacuum. The American Dream continues, however, as a grand myth for the inhabitants of the United States and for many of the world’s population seeking a life that offers the promise of “life, liberty and the pursuit of happiness”.

The grand narrative of the American Dream finds it power in the duality of its existence as both a promise of material wealth through individual effort and social justice through community support. It is both individualistic and socialistic while at any given moment one aspect may be in ascension over the other. At different times in the course of the path of the United States, the Dream has pushed the individual efforts that helped expand the country (Manifest Destiny) to the detriment of those civilizations that got in the way. The Dream has also engendered communal efforts to ensure that all of its citizens had access to the Dream (the Abolition Movement, Women’s Suffrage Movement, and the Civil Rights Movement). As the country progresses into a new era of community minded citizenry, the debate over the dream and the role of wealth continues to play a key role in determining the fate of its people.


Davis, J. (2016). What’s Up With Evergreen?  Retrieved from

Kasmir, S. (1996). The Myth of Mondragón: Cooperatives, Politics, and Working-Class Life in a Basque Town. Albany, NY: State University of New York Press.

Marshall, R. (2005). Restoring the American Dream. Work and Occupations, 33(3), 257-261. doi:10.1177/0730888406290094

[1] Evergreen, known also as The Cleveland Model, began as a means of revitalizing the urban core neighborhoods of Cleveland, Ohio. The model partnered City governments with foundational institutions to create an opportunity for workforce development. The model effectively funded the creation of an industrial laundry that would provide service to the Cleveland Hospital and Case Western University. Other co-ops created through this process included an indoor agriculture facility and a solar energy installation company. The co-operatives were linked to a larger organization that controlled by the foundation and other Not-for-Profit organizations


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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