cooperatives

Millennials and the Bondage Economy

This year’s Oscar award winning film, “Twelve Years a Slave,” positions the past as prologue. America’s stakeholder versus shareholder dichotomy has grown as large as the .01 percent versus 99.09 percent national economic class divide resulting in the unholy trinity of rising and suffocating inequalities (income and wealth, social mobility and opportunity). Economists and business leaders are beginning to measure GNP net effects but still in their rear view mirrors.

Instead of “masters,” we have local and national oligarchs and plutocrats who prove that corporations are persons and that every dollar equates to a vote by renting elections, journalists, politicians and Supreme Court judges with impunity. U.S. Chamber of Commerce “bundlers” dismember, outsource and off-shore means of production without paying U.S. taxes or creating domestic jobs while Wall Street “Flash Boys” tilt the national trading playing field so steeply that it becomes a no-way-back ravine from greedy gulch.

Similarities abound between today’s declining civic ethos and mid nineteenth century,  pre Civil War era human flesh markets starting with America’s contemporary desperation class composed of  minimum wage workers toiling in America’s most praised corporations (e.g. Wal-Mart & McDonalds) who need public sector-funded food stamps to make basic ends meet. (more…)

Breaking Good

In today’s economically class-cleaved America, ideological resistance continues unabated to the deployment of government as a force for good especially in contentious change scenarios such as solving growing wealth and opportunity divides and the future of organized Labor (to name just two). Too often, progress is facilitated mainly through the prism of trickle-down tax code set asides to inspire transformational behavior which doesn’t materialize to the desired extent.

This disconnect between theory and practice leaves out working class populations most needing more direct inclusion to uplift the starkly narrowing middle class consumer base that is threatening the end of commonly understood consumption-driven capitalism. As a result, there may be a small opening for policy innovation starting with the tax code (“Changing the tax code could help curb inequality,” Lawrence Summers, The Washington Post). (more…)

Why Your Employees Should Own Your Business | ASBC

by John Abrams

On the last day of 2012 South Mountain Company (SMC) celebrated the end of its twenty fifth year as a worker cooperative. It was an extraordinary year – rich, demanding, uplifting, and profitable.

In 1987 I re-structured the company from a sole proprietorship to an employee owned cooperative corporation. It was a dramatic hinge point in the history of the company. Ownership became available to all employees, enabling people to own and guide their workplace. The responsibility, the power, and the profits all belong to the group of owners. There are no outside investors and no non-employee owners.

We have been profitable every year since our re-structuring. As we near our 40th anniversary, SMC is a thriving integrated architecture, engineering, building and renewable energy company. As the founders and early employee owners have begun to retire, we are transitioning to the second generation and planning for the next 40 years.

Employee ownership has played a big role in the modest successes we have accumulated over time. Owning our work, and finding meaning there, is as essential to a good life as it is to own our homes. Employee ownership has also proven to be an essential ingredient in building stronger communities and local economies.

Read his blog post via the American Sustainable Business Council.

Rebuilding the Yellow Brick Road

A new worker-ownership evolution-revolution featuring more virtuous capitalism communities of practice is demonstrating that doing well can realistically and profitably be based on doing good. This brave new economic world is emerging from green-shoot, “made in America” antidotes to structural unemployment and income inequality, sprouting ubiquitously among increasing absentee-owner-plagued urban and rural geographies. Hybrid home, land, and workplace sovereignty-recuperation models through local equity enterprises are building a “new green economy” equation, where labor seeks to operate in a permanent seller’s market as does domestic energy sourcing with renewables and distributed generation serving as means to better, more sustaining, stakeholder-centric ends.

Societal benefits from this approach are inclusive and sustaining. Comparative labor advantages are sourced locally, stakeholders equate to shareholders, and profits recycle to the businesses and communities that produce them. Local labor regains its natural place-based sovereignty in regards to its relationship with local and exterritorial capital which, while necessary and hopefully sufficient, is subordinated to the needs of the working class people and communities it finances instead of the reverse. Under this approach, solidarity as a founding American immigrant-inspiring and hosting community principle so closely aligned with freedom and daily liberties is reborn, rewired, and reused. (more…)

Supporters of workers cooperatives flesh out plans for Reading | Reading Eagle

By Don Spatz

Reading,PA —  Reading could get its first workers cooperative next year in its push to foster an alternative business model that competes with Wall Street.
The co-op would be an employee-owned firm composed mostly of apprentices being trained in building demolition, deconstruction (razing all or some of a building, but reusing its parts) and weatherization, said Lawrence P. Murin, special assistant to Mayor Vaughn D. Spencer.

The city would not create any cooperatives on its own, but would foster them as part of its economic development plan, Murin told an audience of 30 people last week at Alvernia University.

He said the city gives several million dollars a year to private firms and nonprofits.

“We believe we have the ability to direct some of that to co-ops,” he said.

The meeting was called to update the community on what co-op progress has been made; rescreen the video “Shift Change: Putting Democracy to Work,” shown at the panel’s February meeting; and tout the virtues of building local cooperatives.

“Why Reading? The answer is that we have a mayor and an administration that recognizes the old ways don’t work,” Murin said.
He said the city’s industrial and tax base has dwindled for 40 years because the city has used tens of millions of dollars to lure businesses here, but they’re gone as soon as the incentives are gone.

That’s because under the Wall Street model, capital is sovereign and labor is a commodity, totally opposite the co-op model where job creation comes first and profits second, said Michael A. Peck, the moderator and the North American delegate for the Mondragon Cooperative based in Spain.
“Nobody here is saying capitalism is wrong,” Peck said. “We’re saying that predatory capitalism is wrong, and virtuous capitalism is good.”

Read the full article via The Reading Eagle.

The Basque cooperative movement: a model of solidarity | deia.com

by Joseba Azkarraga Rodero

These are not the best of times for either the economy or employment. The economic crisis that has assailed our country has had its impact on each and every sector, as well as on each and every company, regardless of its organisational structure. This also means that cooperativism in general, and in the Basque Country in particular, is being affected by this situation.

Yet regarding the somewhat tsunami-like scenario involving the Fagor Group, I consider it necessary to emphasise the strength of the actual MCC Cooperative Group in particular and of the Social Economy in general.

The Social Economy in the Basque Country consists largely of enterprises that embrace, organises themselves and operate according to criteria of democratic governance and the supportive distribution of profits, or also, if the case arises, the joint shouldering of any losses there might be.

This conceptual definition applies, a priori, to a wide range of different enterprises, such as those in the Solidarity Economy, the Voluntary Sector, and the Non-Profit Sector, amongst others, but what seems to be unquestionable, nevertheless, is that the cooperatives lie at the very heart of the Social Economy. That is, at least, the case in the Basque Country.

Basque cooperativism is a value in itself. It is the standard-bearer of a culture and values that are socially advantageous, and I believe it represents a form of value creation that lends cohesion to Basque society.

It is no coincidence that the greater concentration of cooperativism in our country coincides with areas where income is more evenly distributed, where there is lower unemployment and where the average standard of living is higher.

Yet there is another factor that needs to be taken into account. Cooperativism brings plurality to the usual –most common- way of doing business. And this is more important in a society and in an age in which individualism is the norm.

I do not share the view of those who want to present this economy as an almost marginal experience. In the autonomous community of the Basque Country more than anywhere else, the bulk of the social economy corresponds to the type that can be referred to as “ordinary economies”. This is shown by, among other things, the fact the Mondragon Group is the leading business group in the Basque Country.

If the difficulties encountered by a cooperative such as Fagor are used by some to talk about a “failed model”, should we not instead, and by the same logic, be talking about the failure of the capitalist model?

I believe we can single out cooperativism as a clear factor of stability, as it may contribute, and is indeed providing at this very time, operational and organisational solutions to the needs arising in each specific case.

Above all, it is a basic building-block for creating a fairer society in which priority is given to people and their values, amongst which are the principles of work and community interest.

Even during my time as the regional minister for Labour in the Basque government, I have always understood that from the public administration’s perspective, investing in the social economy provides a greater return in social terms because it contributes not only to social cohesion, but also to a healthier democracy and a redistribution of wealth.

Nevertheless, I am not, of course, referring solely to the commitment of the public administrations, because the success of the social economy depends on all of us, and most especially on civil society. Hence the reason that now more ever there is a need to coordinate actions and galvanise public and private collaboration in pursuit of common goals.

Numerous sociological and economic studies have been, and continue to be, forthcoming that have sought to explain the emergence, development and success of Mondragón’s cooperative experience. We should not forget that we are talking about a group that consists of over 100 cooperatives, with a major presence abroad, and grouped into three key sectors: financial, industrial and retail. What’s more, it has its own cooperative university.

No one doubts today that a key factor has been the link between work, financing, training and welfare that has existed since the very origins of the Mondragón cooperative experience. This is clear proof of the need to collaborate as the only way of ensuring the long-term consolidation of the grassroots cooperatives.

The crisis that has affected Fagor has given some people the excuse to attack the cooperative model and even generate alarmism in society, questioning not only the model’s very viability, but also such sensitive aspects as Lagun Aro’s ability to continue providing social welfare coverage. Those who have mishandled this information have done so, moreover, seeking to link Basque nationalism with the failure of the cooperative model. Faced with this dangerous tactic, it needs to be clearly stated that Basque cooperativism is precisely that, cooperativism; and in any case, the fact it includes some people with greater or lesser ties with the world of politics is simply a reflection of our country’s socio-political make-up and, more specifically, of the area where the cooperatives are more densely located.

But I would like to add something else. If the difficulties affecting a cooperative such as Fagor, with all the importance it has within the group as a whole, can be used by some to talk about the “failure of the model”, we might well ask how we should describe the economic situation affecting myriad firms that are not cooperatives. According to that logic, should we not be referring to the failure of the capitalist model?

When we refer to Basque cooperativism, we are dealing with 12.5% simply in terms of jobs in industry, 12.4% of exports and 5.25% of the overall Basque GDP. These figures carry enough weight to make some wish to see an end to this model.

Yet there is still one further aspect I should like to mention; one that defines the model’s unique nature, and even more so at times like these. I am referring to internal solidarity. As has sometimes been the case in the past, this solidarity means that people who have lost their jobs due to the difficulties experienced by the cooperative they belong to may be relocated into other cooperatives in the group. This is one of the characteristic traits of cooperativism: solidarity.

I should like to end by quoting Don José María de Arizmendiarrieta, the true father of Basque cooperativism, who always insisted that he wanted “men (and women) with a capacity to develop, with a sense of community, with the ability to think, to create and to serve “. I don’t think anyone has ever provided a better definition of the essence of the cooperative movement.

Translated and reposted from deia.com

By Joseba Azkarraga Rodero, * Former regional minister of Labour in the Basque government

Public/Private Sector Ownership Proposal (P2SOP)

A new socio-political populist movement is sweeping America in reaction to the 2008 financial tsunami of deregulated, greed-based causes and massive wealth transfer effects or receipts to the financial one-percent. Based purely on the numbers seen to date, this movement is and will be composed of rising and current Millennials and the “Net Generation” or “Generation Edge”, immigrants and minorities, plus any white person with a progressive conscience. Converging as a new coalition of the socially and technologically willing, these voters (unless effectively wholesale disenfranchised) will provide a national elections cycle majority for decades as America becomes a majority minority country even though some geographical revisionist and recidivist pockets will persist (such as the Mason Dixon healthcare divide) based on political gerrymandering and subtext political culture.

Represented in numerous cross-pollinating private and nonprofit sector organizations across the country, this movement reacts to no-way-out diminishing expectations and desperation. Practitioners are studying and forming various hybrid, virtuous cycle, cooperative and collaborative capitalism models that honor individual initiative in the context of broad-based and transparent stakeholder ownership centered in “local living economies.” (more…)

When the Right Ones Get It Wrong

The Mondragon Cooperative Group (“Humanity At Work” through Cooperation, Participation, Social Responsibility and Innovation, headquartered in the Basque region between Spain and France) is ranked as the world’s largest worker-owned industrial cooperative group but also as the top Basque industrial group, tenth in Spain with 80,000 personnel, a presence in 70 countries, and winner of the 2013 Financial Times “Boldness in Business” award. Mondragon’s 60-year mission is to generate wealth for society through values-centric and market competitive business development and job creation under the “one worker, one vote” cooperative framework where labor is sovereign and capital, while essential, is subordinate to sustaining job creation.

Yesterday, Fagor Electrodomestics, which evolved from the original Mondragon household white goods manufacturing cooperative (ULGOR) to hold almost a third of its domestic sector market share for decades, was declared formally insolvent (859 million Euros in debt, 5,642 jobs at risk, 100,000 Euros left in the corporate account). Predictably, global media “punditcrats” have wasted no time in jumping on the “see, I told you so” bandwagon. Case in point, The Economist, “Trouble in workers’ paradise – The collapse of Spain’s Fagor tests the world’s largest group of cooperatives.” This publication and others speculate as to whether cooperatives and similar hybrid forms of worker ownership can survive the “real world” of boom or bust cycles that both predatory and virtuous capitalism practices mete out to passive adherents and active practitioners, beneficiaries and victims.

Also yesterday, Mondragon’s social mutual, Lagun Aro, announced it would propose a 1.5% raise in contributions from all members at Mondragon’s next General Assembly to support its role in providing additional unemployment benefits to displaced Fagor Electrodomestics worker-owners. This other news received only local media coverage and therein lies the conventional wisdom disconnect from the healing power of practicing metrics-based solidarity. (more…)

We Need More Employee-Owned Businesses | U.S. News

By David Brodwin

Worker-owned businesses are on the rise. The number of worker-owned business in the U.S. is growing robustly, around 6 percent per year, and these businesses now account for about 12 percent of the private sector workforce. Yet, worker-owned business are frequently disparaged as “not quite capitalism.” Skeptics repeat the cliché that worker-owners bog down seeking consensus on the most minor points.

The skeptics should keep in mind that some the world’s most respected business organizations are in fact, owned entirely by their staff. It’s true for top tier law firms and accounting firms. It’s true for leading management consultants like McKinsey. And top investment banks like Goldman Sachs were partnerships until relatively recently in their history.

Members of worker-owned co-ops may not think of their businesses as having anything in common with top-tier professional services firms, but there are several important similarities between the two structures:

In both cases, the partners (or employee-owners) have a vote in electing the managing partner or president.
In both cases, the managing partner or president must exchange information extensively with other partners or owners, in order to maintain support and buy-in to the firm’s plans.
In both cases, compensation is shared among the partners or owners. This keeps incentives aligned.
In both cases, compensation is variable, based on a combination of individual and overall performance. This makes the firm more robust, since in tough times it has less of a payroll to meet.
In both cases, there are clear-cut rules for how a person newly entering the firm can become a partner or owners. This promotes a meritocratic culture that rewards performance and discourages cronyism.

Because of these characteristics, worker-owned businesses were, on average, better at maintaining their fiscal health during the last recession.

Read the whole article via usnews.com.

Union co-op group taking root in Cincinnati | Cincinnati.com

College Hill farm is first of several planned worker-owner initiatives to include pipe fitting, manufacturing

By Mark Curnutte

COLLEGE HILL — Zeke Coleman, laid off from his previous job in the food industry, has found a living wage and his passion in an emerging local jobs program that has attracted international attention.

Coleman, 33, of Hamilton, is one of 10 worker-owners of the Our Harvest Food Hub Co-Op, a food packaging and distribution center based on an incubator farm off North Bend Road in College Hill.

“I love vegetables, and I love this work,” said Coleman, who spent Wednesday packaging crops harvested this fall – turnips, cilantro, winter squash, kale – at the farm and delivering 51 bags or boxes to three distribution sites. There, some of the 200 consumer subscribers in the Community Supported Agriculture program will pick them up.

Our Harvest, which opened on the farm in April 2012, is the most advanced of the eight projects that are part of the Cincinnati Union Co-Op Initiative. Based on and developed with help of the Mondragon Worker-Owner Cooperatives in the Basque region of Spain, the Cincinnati Union Co-Op hopes to develop hundreds of family-sustaining union jobs in the next few years in multiple industries: railway manufacturing, energy jewelry, renter-equity housing, food service and home health care.

Read the article and watch the video from Cincinnati.com.

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