The Union-Cooperative Model: A Key to Economic Democracy

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By Belden Fields 
Worker cooperatives can take a variety of forms. Each one tends to have unique aspects; however there are some overarching types that we can identify. There are retail consumer coops, service coops, and producer coops.  

In the Urbana-Champaign area, most people are familiar with the Common Ground Food Coop.  All the workers are owners, but some members of the coop are not workers. Anyone can shop there, but nonmembers pay a slightly higher price than workers and non-worker members. The retail consumer cooperative is the most familiar of the coops in the United States.

Less common are the cooperatives of service providers. The largest example of this is the Cooperative Home Care Associates. This group has 1,700 health care worker members who serve people in New York City.  Two other examples are the laundry cooperative and the solar panel and weatherization cooperative in Cleveland. These two co-ops are part of the Cleveland Evergreen Cooperatives that grew out of the Cooperative Development Center at Kent State University.  At present, these are small cooperatives, employing 35 and 27 workers respectively.  The member/workers are mainly minority ex-felons who would have an especially difficult time finding employment elsewhere.

Finally, there are the producer cooperatives. One subset of these is focused on agriculture.  A number of communist and socialist countries have had agricultural cooperatives that sometimes co-existed with state-owned farms. Even in capitalist countries, one can find producer cooperatives, usually in rural areas, that store and sell produce.  In fact, much of the farming that takes place in traditional societies is based upon group land ownership systems similar to cooperatives.

There are also industrial worker cooperatives.  In Yugoslavia when Tito was in power, there were worker-controlled factories that were unique in Eastern Europe. Mondragon cooperative, in the Basque regions of Spain, is perhaps the oldest remaining industrial producer cooperatives. It was founded in 1956 and employs almost 84,000 workers, the vast majority are also owners.  It is actually a conglomerate of 256 companies under a single umbrella.  It produces both consumer goods, like kitchen appliances and washing machines, and machine tool and industrial components. This cooperative extends out well beyond production. It has developed its own schools, a technical college, a bank, and retail outlets, all run by worker-owners.  Another extensive federation of worker cooperatives (FECOOTRA) developed in Argentina; largely in response to the 2001 economic crisis in that country. FECOOTRA numbers about 16,000 enterprises and, has been credited with 10% of the country’s GDP (

There are also such industrial worker cooperatives in the United States, though they are much smaller than their Spanish and Argentinian counterparts.  Some of the oldest, written about by Edward Greenberg in Workplace Democracy: The Political Effects of Participation, are the plywood mills in the Northwest. These co-ops formed when workers took over when   owners planned on shutting plants down. There is also similar co-op with 130 worker-owners in Everett, Massachusetts, Market Forge, that produces steam equipment for restaurants.

In the West, worker ownership or control over plants is very controversial, largely because the dominant capitalist discourse tells us that workers cannot achieve the efficiency that highly paid executives can. Even some cooperative-minded socialists have opposed producer cooperatives.  While Marx and Engels praised the short-lived (destroyed by the French Army) 1871 Paris Commune, the late 19th and early 20th century Fabian Socialists, Beatrice and Sidney Webb, strongly opposed producer cooperatives in favor of consumer ones.  The consumer cooperative movement became one of the official constituent parts of the Labour Party in Britain, along with the trade union and parliamentary components of that party.  Today it has virtually no standing in that party.

Despite a history of western suspicion and resistance to cooperatives, there is growing interest and support for co-ops, including among trade unions. The previously mentioned Cooperative Home Care Associates in New York, is represented by Service Workers International Union (SEIU)  #1199. This permits worker-owners to use the muscle of the unions to raise wages, share in the SEIU’s  political influence, and share in its benefits and educational programs.  In the industrial Market Forge plant, the workers who took over were able to use their union, United Steel Workers  #2432, to bargain terms with the previous owners who wanted to move operations to the lower-wage state of Georgia.

The support from unions is interesting because connections between these two types of organizations are not immediately obvious. When we think of unions, we think of an association of workers that bargains with employers whose interests are distinct from, and conflicting with, owners. This presents a possible contradiction between unions and cooperative ownership.  If the workers are at the same time the owners, what roles can there be for unions? I tried rather unsuccessfully to grapple with this in my book Rethinking Human Rights for the New Millennium (Ch. 5, Toward a Political Economy of Human Rights).

What we find is that a new model of organization has emerged, “The Union Co-op Model.”  On March 26, 2012, the United Steel Workers, Mondragon, and the Ohio Employee Ownership Center issued a joint statement to explain this model.  In it, they recognized the democratic value of common ownership by workers. Further, they noted that, without a fight-back strategy when private owners decide to move plants to lower-wage areas, workers can be nearly helpless. They recognize that cooperative worker ownership must have a training and education component so that workers are able to move into different positions within the organization during their work lives.  The model  recognizes that often cooperatives are too small to enjoy benefits, such as health care and retirement,  that affiliations with larger unions can bring.  Perhaps the most critical aspect of the statement is recognition that there can be competing interests even among individual workers– as a wage-earner, a worker might want a large wage raise;  as owners, the worker might want to invest money in research and development or plant renovation. This plurality of interest is given structural recognition in proposals of four different entities within the plant for which all worker-owners would be eligible members: an annual General Assembly, an elected Board of Directors governed by and subject to the General Assembly, a Management Team appointed by the Board of Directors, and a Union Committee elected on a representational basis from different areas within the co-op.

This structure is based upon Mondragon’s success of over half a century.  It is a model that could be useful to workers as a democratic and economically viable alternative to unemployment when future owners and managers inform workers that they are moving the plant to low-wage regions or countries.  It is also a survival strategy for unions that now represent only about 7% of the U.S. workers in the private sector.  This model offers a valuable tool for workers in the struggles against conversion to a deindustrialized, service economy.  Finally, and perhaps most importantly, it is a model that rejects the commodification of the worker. In Union-Co-ops, the worker becomes an active agent in determination of the conditions of her or his working life rather than being a tool of corporate capitalists.

This model and a strategy is yet to be tested on any large scale in the United States. However, it has worked well elsewhere. If we choose to move in this direction in the United States, maybe, just maybe, we can overcome the capitalist-supporting myth of “American Exceptionalism” and democratize our economy.


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