Working Collectively Beats Working for a Boss

by Pete Dolack

Cooperative enterprises are more stable than conventional capitalist enterprises, are more productive and create jobs that are more sustainable. And although the temptation to see coops as a magical solution to the ills of capitalism should be resisted, that they are better for workers than top-down enterprises shouldn’t be any surprise.

The better performance of cooperative enterprises, and the better results for workers, than that of traditionally run capitalist enterprises was recently summarized by the organization Co-operatives UK in its report, “What do we really know about worker co-operatives?” Written by Virginie Pérotin, the report analyzed international data on worker-owned and -run businesses in Europe, the U.S. and Latin America and compared the results with conventional businesses.

Moreover, the report said, conventional enterprises have something to learn from cooperatives: “in several industries, conventional companies would produce more with their current levels of employment and capital if they behaved like employee-owned firms.” Setting aside the unlikelihood of capitalists suddenly deciding to cede control and/or share profits, the preceding quote only makes sense. Why wouldn’t we be more productive if we were working for ourselves and had a say in the running of the business rather than toiling within the traditional concept of having to accept orders from above by people who have no interest other than squeezing as much out of you as possible?

The Co-operatives UK report defined a worker co-operative as an enterprise in which all or most of the capital is owned by employees (members) whether individually and/or collectively; all categories of employees can become members; most employees are members; in accordance with international co-operative principles, members each have one vote, regardless of the amount of capital they have invested in the business; and members vote on strategic issues in annual general meetings and elect the chief executive officer. Law firms were excluded because only some lawyers can be partners nor can any support staff.

The main findings of the report are:

  • Worker co-operatives are larger than conventional businesses and not necessarily less capital-intensive.
  • Worker co-operatives survive at least as long as other businesses and have more stable employment.
  • Worker cooperatives are more productive than conventional businesses, with staff working “better and smarter” and production organized more efficiently.
  • Worker co-operatives retain a larger share of their profits than other business models.
  • Executive and non-executive pay differentials are much narrower in worker co-operatives than in other firms.

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