USW

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…)

Corporate & Capitalist Transition & Transformation Models

Paper submitted by Michael Peck (Mondragon USA), Steve Dubb (The Democracy Collaborative, University of Maryland), and Rob Witherell (United Steelworkers Union) for the “Corporations in a Great Transition: Visions, Models, and Pathways for Transformation” event hosted by the Tellus Institute & MIT Sloan School of Management, in Boston on October 31st & November 1st, 2013.

Capitalism at a Crossroads

Although the theme of this roundtable is “Corporations in a Great Transition,” the authors would argue that corporations, especially those in the financial sector, mostly have not transitioned at all. Instead, the increasing wealth inequality and diminishing social mobility experienced by the United States reflects a capitalist system protecting shareholder-centric relics of past century technology and socioeconomic realities rather than the empowered stakeholder movements we see and in which we participate. In this anachronistic context, shareholder value is measured more on perception and popularity than on actual long-term performance and real wealth creation. Meanwhile, share ownership for the vast majority of people means little more than legalized gambling with an account balance.

  • Case in point: Apple’s market capitalization recently increased by $10 billion overnight simply because of a report the CEO had dinner with a prominent investor.

Alarmingly, the traditional capitalism concept of building value over the sustainable long term has been tossed aside and replaced with maximizing short term profits at the great expense of anything sustainable, starting with the basic right of people to “life, liberty, and the pursuit of happiness.”

  • Case in point: A major pharmaceutical company recently announced it would lay off thousands of its employees and abandon a number of research and development projects to focus on higher profit margin drugs because their profit margin wasn’t perceived to be high enough.
  • Case in point: Vulture capital firms scoop up undervalued, but profitable companies either to doctor their income statements so the acquired business can be resold at a higher price, or suck out as much cash from continuing operations as possible until the carcass of plant, property and equipment can be sold off for a few dollars more.

In these cases, the cure is visibly worse than the disease for those left disenfranchised and behind. Jobs are eliminated and shipped to whichever place can offer the lowest poverty wages for workers coupled with the least restrictions on safety and environmental conditions. This is because global labor arbitraging has become the predatory capitalist market mechanism instrument of choice. We have replaced “slavery based on race and color” with a new form of slavery based on lack of ownership, viable options and means. (more…)

How to Democratize the US Economy | The Nation

A long-term plan to renovate the American dream begins at the local level and scales up.

This article is adapted from Gar Alperovitz’s What Then Must We Do? (Chelsea Green).

by Gar Alperovitz

Everyone knows the United States faces enormous challenges: unemployment, poverty, global warming, environmental decay—to say nothing of whole cities that have essentially been thrown away. We know the economic system is dominated by powerful corporate institutions. And we know the political system is dominated by those same institutions. Elections occur and major fiscal debates ensue, but most of the problems are only marginally affected (and often in ways that increase the burdens).

The issue is not simply that our situation is worrisome. It is that the nation’s most pressing problems are built into the structure of the system. They are not unique to the current economic slump or the result of partisan bickering, something passing in the night that will go away when we elect forward-looking leaders and pressure them to move in a different direction.

Not only has the economy been stagnating for a long time, but for the average family, things have been bad for a very long time. Real wages for 80 percent of workers have not gone up more than a trivial amount for at least three decades. At the same time, income for the top 1 percent has jumped from roughly 10 percent of all income to more than 20 percent. A recent estimate is that a mere 400 individuals in the United States own more wealth than the bottom 180 million Americans taken together.

Unfortunately, what we call traditional politics no longer has much capacity to alter most of the negative trends. To be clear: I think projects, organizing, demonstrations and related efforts are important. But deep down, most people sense—rightly, in my view—that unless we develop a more powerful long-term strategy, those efforts aren’t going to make much of a dent.

In 2007, people got excited about federal legislation raising the minimum wage from $5.15 to $7.25 an hour. This was obviously good, but the long-term negative trend continued nonetheless. The minimum wage, adjusted for inflation, was more than $2 higher in 1968. Clearly, when great victories don’t even get us back to where we were more than forty years ago, we need to pay close attention. I support such efforts, but it appears unlikely that strategies aimed at reviving the politics that produced the New Deal and Great Society programs are going to alter the big trends, even if those strategies are intensified by movement building—especially given the decline of labor unions, the power base of traditional progressive politics.

There is, however, a little-noticed twist to this otherwise bleak narrative. Deepening economic and social pain are producing the kinds of conditions from which various new forms of democratization—of ownership, wealth and institutions—are beginning to emerge. The challenge is to develop a broad strategy that not only ends the downward spiral but also gives rise to something different: steadily changing who actually owns the system, beginning at the bottom and working up.

* * *

Consider the evolutionary change developing in that rustiest of Rust Belt states, Ohio. On one unhappy day in September 1977, 5,000 steelworkers lost their jobs, their livelihoods and their futures when Youngstown Sheet and Tube closed down. Such large-scale layoffs were not common in the United States up to that point. The story made the front page of newspapers and led television news across the country. The workers called it Black Monday, and I remember all too well reports of desperate men committing suicide after concluding they could no longer support their families.

A young steelworker named Gerald Dickey had a different idea: Why couldn’t the workers run the facility themselves? Dickey and a group of activist friends teamed up with an ecumenical coalition in Youngstown to demand that the mill be put back to work under worker-community ownership. After a huge organizing effort, they got support from Washington—including the Carter administration, which agreed to allocate $100 million in loan guarantees.

When the administration reneged after the midterm elections of 1978, the plan fell apart. But the story did not end there. And what happened next is of even greater significance.

The inspiring example of the workers and religious leaders—and the sophisticated educational and political work they did to spread the word—had lasting impact. They knew they were up against some of the most powerful corporate (and union) players in the country. They were fully aware they might lose the battle. They also knew they had discovered an important idea with great promise. Accordingly, they made it their business to educate the public, the press and politicians in the state and around the country about what they were trying to do, and why.

The idea took root in Ohio, and over time the practices and strategies of worker-owned businesses grew more sophisticated and innovative. Today, the state is home to half a million worker-owners, and the support system for building such businesses is one of the most advanced in the nation. The simple idea that workers can and should own their businesses is now conventional in many parts of the state, not only among workers but also businessmen, many of whom (aided by certain tax benefits) sell their businesses to their employees when they retire.

The current goal is not simply worker ownership, but worker ownership linked to a community-building strategy. In Cleveland, a group of worker-owned companies are connected through a community-building nonprofit corporation and a revolving fund designed to help such businesses thrive. Part of the design involves getting hospitals and universities in the area (like the Cleveland Clinic, Case Western Reserve University and University Hospitals) to purchase supplies, goods and services from these companies. Everything in the network is green by design. One of the cooperatives, for example, is an industrial-scale laundry that uses two-thirds less energy and water than conventional ones.

Similar networks are developing in many other cities, and big unions are lending their support as well. Working with the Mondragon Corporation in the Basque region of Spain—an exemplary integrated model involving numerous cooperatives and more than 80,000 people—the United Steelworkers, whose national leadership once opposed the Youngstown effort, has announced a campaign to help build “union co-op” worker-owned companies here. The Service Employees International Union, the Steelworkers and Mondragon are involved with a worker-owned laundry in Pittsburgh. SEIU has also joined in a groundbreaking partnership with the largest worker cooperative in the United States: New York City’s Cooperative Home Care Associates, which provides home services to the elderly, disabled and chronically ill.

Visit The Nation to read the full article.

Can Unions and Cooperatives Join Forces? | Truthout.com

An Interview With United Steelworkers President Leo Gerard

By Amy Dean

United Steelworkers President Leo Gerard talks to Truthout about the challenges and opportunities of a new labor model: the union co-op.

As the economic crisis festers for many long-term unemployed and underemployed people, the idea of worker-owned and worker-run cooperatives has become ever more appealing as a possible pathway toward an economy that works for everyone. Theorists such as Gar Alperovitz have argued for the importance of cooperatives in providing a nuts-and-bolts alternative to dominant methods of economic production: They offer an example of a different way of doing business that people can see and experience in their own lives.

As someone who loves to see organized labor on the move in any form, I am interested in the role that unions can play in promoting co-ops – and I have been excited to see the United Steelworkers take an especially proactive role in bolstering the cooperative movement. I spoke with Steelworkers President Leo Gerard about how union/co-op hybrids could change the experience of work for those who clock in every day and about the depth of vision it will take to make union co-ops a serious part of the American economy.

Given that cooperatives currently make up only a tiny percentage of our economy, I first asked Gerard whether he thought co-ops could be viable at a larger scale.

“People don’t realize there are millions of people in the United States and Canada that are already members of co-ops,” he said. “When I was a kid growing up in northern Ontario, my parents used to shop at a food co-op. I think that there are already a lot of these businesses; people just don’t know it.”

Gerard next discussed the structure of “union co-ops” that the Steelworkers have begun, in partnership with Spain’s Mondragon cooperatives. Here’s how it works: Employees can join the union of their choice, and they are guaranteed a living wage, benefits and a collective bargaining agreement. In some of the new union co-ops, workers get ownership shares in the enterprise, which they pay for a little at a time out of their paychecks and which accrue equity over a period of six or eight or 10 years. Workers vote on the composition of the management team and collectively bargain with that team to set workers’ wages, benefits, and procedures for handling disputes.

Read the full interview via Truthout.

 

C-W Interview: Rob Witherell | Community-Wealth.org

Interview of Rob Witherell

Representative, United Steelworkers (USW)

Interviewed by Steve Dubb, Research Director, The Democracy Collaborative, March 2013

Rob Witherell works for the United Steelworkers union at its headquarters in Pittsburgh, Pennsylvania. In addition to working on contract negotiations, benefits analysis, research and organizing, Robhas also led the United Steelworkers’ efforts on developing union co-ops and is the union’s lead liaison with the Mondragón Cooperative Corporation.

Could you tell us a bit about your history in labor organizing and what has led you to dedicate your career to the labor movement?

When I was an undergrad at the University of Massachusetts, our tuition and fees doubled in the years I was there, and so I got involved in student organizing and student government.  That experience led me into politics and working on political campaigns, which eventually led to the opportunity to earn my Master’s degree in Labor Studies.  As a graduate research assistant, I was a UAW member and our union contract allowed me to attend grad school full time with full health insurance for a whopping $300 per semester, and earning the best pay rate I had ever had.  Since my undergrad degree is a Bachelor’s in Business Administration. I am probably one of very few people around who has both a business and a labor degree.

Could you discuss what put co-op organizing on the Steelworker agenda, given that employee-owned cooperatives are not exactly the typical way unions today go about organizing new members?

In the late eighties and early nineties we put a lot of efforts into ESOPs [employee stock ownership plan-owned companies] as a way to rescue troubled companies.  In some cases, that meant complete worker ownership. For most of them, it meant minority worker ownership.

And what we found is that where things didn’t change at all, the ESOP wasn’t successful.  Where we had some success — and where the ESOPs still exist — the companies are typically 100% employee-owned. A key to these successes was that there was a change in the culture of the workplace, so that the ownership of the company means more to the workers than the value of their shares.

Could you elaborate on the differences between the successful and unsuccessful ESOPs?

In a lot of the cases, we were dealing with cash-strapped companies. Doing these buyouts were a way of exchanging shares for concessions. So the business stayed open, but nothing really changed in terms of the product, market, business structure or business plan. Eventually those shares got bought out. So while it save those companies in a lot of cases, our members didn’t feel any sense of ownership.

So the ones that have been able to survive as employee-owned companies are the ones that started functioning more like a cooperative — that is, they were companies which had an active union and a company management that listened to its workers. In these companies, there was more of an emphasis on having a partnership with the union and in talking and listening to employees and respecting employees as owners.

Read the whole interview at Community-Wealth.org.

CUNY Law Community Economic Development Clinic Partners with Mondragon Corporation on Union Coops | CUNY School of Law

New York, NY – The City University of New York School of Law’s Community Economic Development (CED) Clinic has launched a new partnership with the Mondragon Cooperatives, the largest worker-owned cooperative in the world.

Under the new partnership, the CED Clinic, in collaboration with Pennsylvania-based Regional Housing Legal Services, will help launch the Pittsburgh Clean & Green Laundry, an eco-friendly laundry based on Mondragon’s cooperative model. Pittsburgh Clean & Green aims to re-employ 100 primarily minority laundry workers, who were laid off when their Sodexho Corporation laundry closed. They will work in a new state-of-the-art facility in Pittsburgh’s Central District.

CUNY’s CED Clinic will provide legal support for a new model of unionized worker cooperatives—called “union coops”—recently launched by Mondragon, the United Steelworkers union (USW), and the Ohio Employment Ownership Center (OEOC).

“Union coops can create well-paying, democratically run workplaces in communities hard hit by the economic recession,” explains Carmen Huertas-Noble, associate professor and director of the CED Clinic. “The union component of the model provides front line worker-owners with the security of a collective bargaining agreement and leverages the organizational expertise and economic power of the labor movement.”

By partnering with Mondragon USA, the CED Clinic aims to become a national leader in the integration of cooperative and labor law and to help union coops like Pittsburgh Clean & Green Laundry get off the ground.

The CED Clinic will collaborate with Mondragon USA to:

  •  Develop the legal framework for the USW-Mondragon-OEOC union-coop model nationwide
  •  Support other ongoing union-coop projects following the USW-Mondragon-OEOC model
  •  Connect with key sources of U.S. financing, such as the National Cooperative Bank, foundations, advocacy groups, and public sector labor departments
  •  Contribute to union-coop project strategy and roll-out
  •  Ensure union-coop model legal standardization in both design and execution

“We are inspired by the news that CUNY Law’s CED Clinic will be working with us to develop the union coop model legal framework,” said Michael Peck, Mondragon’s North America Delegate. “Professor Huertas-Noble and CUNY Law students bring to this project a wealth of ‘hands-on’ experience and a deep commitment to community service and economic justice.”

Read the press release from CUNY School of Law.

Can Co-ops Save Unions? | In These Times

Labor-cooperative partnerships may herald a new strategy for labor–if they can get off the ground.
BY REBECCA BURNS

What has 18 owners, no bosses and high hopes for fostering workplace democracy in America? New Era Windows LLC, a worker-owned cooperative formed last year by members of United Electrical Workers (UE) Local 1110.

After occupying their factory to save their jobs—twice—workers at a closing Chicago windows plant decided last year to try a new tack: running the business themselves. They purchased equipment from their former bosses and are now setting up a new factory they believe will create good jobs in the city’s depressed economy.

New Era is one of a growing number of union-backed cooperatives nationwide that could herald a new strategy for labor. In his survey of existing cooperatives, economist Gar Alperovitz has calculated that the number of workers in partly or wholly employee-owned companies now exceeds those who belong to private-sector unions—a statistic that speaks both to the perilous state of the labor movement and the promise of reviving it through new structures.

In the case of New Era, the decision to form a cooperative was the result of a long battle with management. In 2008, upon being told that their factory would be closed and they would be fired immediately without severance pay, workers staged a six-day occupation of the Republic Windows and Doors factory and emerged victorious. Their stand, coming at the height of the financial crisis, was celebrated nationwide. It also emboldened them to occupy once again in February 2012, when new owner Serious Energy announced that it, too, would be closing the plant. The workers’ journey from occupiers to owners was paved in part by UE’s tradition of militancy, which some progressives hoped would inspire other unions fighting mass layoffs.

The labor movement at large hasn’t reprised the 1930s-era tactic of occupying factories in order to regain a foothold in existing workplaces. But a growing number of unions, led by the United Steelworkers (USW), are exploring creation of new worker-owned cooperatives as a strategy for contending with the offshoring of U.S. jobs. Like the workers who formed New Era Windows, USW began experimenting with cooperatives partly out of necessity—as job losses mounted amidst the financial crisis, “there seemed to be an opening to consider how we might create a better model, because everything was falling apart,” says Rob Witherell, USW’s cooperative strategist. USW decided to partner with Mondragon, Spain’s famous group of cooperatives, to create a template for union co-ops.

Now, USW is helping launch several pilot projects, including a green laundry in Pittsburgh that could replace some of the 100-plus jobs lost when an industrial laundry in the area closed several years ago. Members of United Food and Commercial Workers are currently employed in an urban farming cooperative in Cincinnati, with more projects planned under the behest of the Cincinnati Union Cooperative Initiative.

Read the whole article from In These Times.

Learn more about the union co-op model from the United Steelworkers.

Interview With Rob Witherell: Representative, United Steelworkers (USW) | Truthout

By Steve Dubb

Rob Witherell works for the United Steelworkers union at its headquarters in Pittsburgh, Pennsylvania. In addition to working on contract negotiations, benefits analysis, research and organizing, Rob has also led the United Steelworkers’ efforts on developing union co-ops and is the union’s lead liaison with the Mondragón Cooperative Corporation.

Could you tell us a bit about your history in labor organizing and what has led you to dedicate your career to the labor movement?

When I was an undergrad at the University of Massachusetts, our tuition and fees doubled in the years I was there, and so I got involved in student organizing and student government. That experience led me into politics and working on political campaigns, which eventually led to the opportunity to earn my Master’s degree in Labor Studies. As a graduate research assistant, I was a UAW member and our union contract allowed me to attend grad school full time with full health insurance for a whopping $300 per semester, and earning the best pay rate I had ever had. Since my undergrad degree is a Bachelor’s in Business Administration. I am probably one of very few people around who has both a business and a labor degree.

Could you discuss what put co-op organizing on the Steelworker agenda, given that employee-owned cooperatives are not exactly the typical way unions today go about organizing new members?

In the late eighties and early nineties we put a lot of efforts into ESOPs [employee stock ownership plan-owned companies] as a way to rescue troubled companies. In some cases, that meant complete worker ownership. For most of them, it meant minority worker ownership.

And what we found is that where things didn’t change at all, the ESOP wasn’t successful. Where we had some success — and where the ESOPs still exist — the companies are typically 100% employee-owned. A key to these successes was that there was a change in the culture of the workplace, so that the ownership of the company means more to the workers than the value of their shares.

Could you elaborate on the differences between the successful and unsuccessful ESOPs?

In a lot of the cases, we were dealing with cash-strapped companies. Doing these buyouts were a way of exchanging shares for concessions. So the business stayed open, but nothing really changed in terms of the product, market, business structure or business plan. Eventually those shares got bought out. So while it save those companies in a lot of cases, our members didn’t feel any sense of ownership.

So the ones that have been able to survive as employee-owned companies are the ones that started functioning more like a cooperative — that is, they were companies which had an active union and a company management that listened to its workers. In these companies, there was more of an emphasis on having a partnership with the union and in talking and listening to employees and respecting employees as owners.

How did the Steelworkers become aware of Mondragón?

In 2008, I was in Bilbao at an economic development meeting there to convince or help convince suppliers of one of our employers here in Pennsylvania to expand their supply operations into the United States. And while I was there, thanks to Michael Peck, who is Mondragon’s North American delegate, I had the opportunity to talk with Jesus Herrasti who was the President of Mondragón International division at the time. And so it was a good conversation. We found that we had a lot in common. And that led to a lot more conversations with [United Steelworkers President] Leo [Gerard]. And that led to the point when we announced our collaboration in 2009.

Read the rest of the interview from Truthout.

More US unions are now running their own businesses | MSNBC

by Ned Resnikoff

A handful of American unions aren’t content to just negotiate with the boss—instead, they’re cutting the boss out of the equation entirely.

For example, the United Steelworkers union (USW) is starting a handful of co-ops across the rust belt in collaboration with the Basque Mondragon Corporation; a sprawling federation of cooperative businesses, in which all of the workers have an equal share in the company and get to vote to determine corporate governance. In Mondragon, company management in the federation is answerable to a democratically Governing Council and General Assembly consisting of all employees. Since 2009, USW has been working to import the cooperative network’s model of workplace democracy into some American pilot programs.

Amy Dean, a fellow with the Century Foundation, tracks the USW’s progress in a recent article for Yes! magazine. The steelworkers union, writes Dean, is currently “helping to launch the Pittsburgh Clean and Green Laundry Cooperative, a new industrial laundry.” Additionally, it is supporting the Cincinnati Union Cooperative Initiative in Ohio, which “has two projects in the pipeline: a railway manufacturing co-op and a cooperative for retrofitting buildings for energy efficiency.”

Read the article from MSNBC’s The Ed Show.

Countering the Emptiness

In this nation I see tens of millions of its citizens—a substantial part of its whole population—who at this very moment are denied the greater part of what the very lowest standards of today call the necessities of life. I see millions of families trying to live on incomes so meager that the pall of family disaster hangs over them day by day. I see millions whose daily lives in city and on farm continue under conditions labeled indecent by a so-called polite society half a century ago. I see millions denied education, recreation, and the opportunity to better their lot and the lot of their children. I see millions lacking the means to buy the products of farm and factory and by their poverty denying work and productiveness to many other millions. I see one-third of a nation ill-housed, ill-clad, ill-nourished.”

 – FDR’s Second Inaugural Address, January 20, 1937 –

What really has changed 76 years later except that this deplorable statistic has gone from 33 to the 47 percent called out in last November’s election cycle?  Even worse, America’s suffocating and selfish pursuit of wealth inequality has created the highest percentage of absentee ownership since pre-colonial times when European monarchs claimed vast swaths of a relatively uninhabited new world because they could. Today, instead of drawing from its emancipating and egalitarian historical roots to nourish a vibrant middle class ownership society, America competes with authoritarian command and control economies such as China in a global race to determine which culture produces more self-serving and self-reinforcing oligarchs and oligopolies. The worst of these, in turn, conspire to buy elections, park their wealth in overseas tax havens, practice global labor arbitrage with impunity, and then target local government subsistence programs for political extinction.

After four decades of factory outsourcing, American cities and outlying rural regions burned by such a protracted economic genocide siege now face perennial cold winters of geographical inequality exacerbated by societal climate change without cultural transformation. (more…)

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