Well hello there!
Maybe you found this blog because you want to convert your business to a worker cooperative. Or you are feeling frustrated and drained by the culture of work and want some solidarity. Regardless, you’ve come to the right place.
As is often the case, Beyoncé said it best, “god made me so bitch pay me.” I love how these 7 words quickly and effectively attack the hyper-productive work culture we have inherited. These lyrics upend ideas of earned value through work contribution, and instead state in no unclear terms that our value is inherent in being alive. This echoes a growing sentiment in our society that workers deserve more; more money, more rest, more agency, more equity. All toward providing everyone with more of what gives their life meaning.
This cultural conversation seems to revolve a lot around topics like Amazon, Starbucks, the fear of a recession that leads to major layoffs and inches us closer to a recession, the big world of tech, and unions. In co-founding the second worker cooperative distillery in the world, I’d love to see more conversations around worker ownership in this sphere.
Something like .0003% of businesses in the US are worker owned, so it’s not terribly surprising people don’t talk about it more. But worker owned models have been around since the industrial revolution, and potentially offer a unique defense against unfair labor practices and capitalist overreach. Knowing our history helps equip us with knowledge and creative solutions, so let’s dive right in.
-Sean
What is a Cooperative
Broadly speaking, a cooperative is a business with multiple types of member owners. This can be workers, consumers, investors, etc. Worker ownership is a large umbrella term, and can range from providing stock options to employees, all the way to providing shares in the company for all workers. This latter example is a worker cooperative, and requires at least 51% of the company be owned by worker members. This means that, rather than have a board of investors who make business decisions from the top down, worker cooperatives rely on a democratic, one member one vote process. This gives workers agency in the trajectory of the business. In turn, worker cooperatives are much more likely to fair economic hardship and are often pillars of their community.
Formation of Cooperative Models
Rewind to the Industrial Revolution (1760-1840), in many ways the bedrock of the hyperproductive, capitalist driven work culture we have inherited today. During this period, our cultural relationship with work changed drastically. It is coined the “Farm to Factory” period, where jobs went from farm fields and artisan makers to production and manufacturing warehouses.
Through this change, a lot of workers felt taken advantage of for the sake of profits and started organizing to change working conditions, something we now consider the labor movement. A part of the labor movement, stemming from socialist philosophy, was the creation of worker owned businesses.
Robert Owen & The Rochdale Principles
Robert Owen is considered the father of the cooperative business model. He experimented with this model after inheriting his family’s cotton mill in New Lanark, Scotland in 1799. These early experiments were fundamental in establishing the first successful cooperative organization, and inspired others to adopt similar business philosophies. This led to the consumer owned Rochdale Society of Equitable Pioneers in 1844. It was here that the famous Rochdale Principles were drafted:
1. Voluntary and Open Membership
2. Democratic Member Control
3. Member Economic Participation
4. Autonomy and Independence
Education, Training, and Information
Cooperation Among Cooperatives
Concern for Community
The current cooperative movement grew out of these philosophies. Throughout the course of the 19th and 20th century, the cooperative model has resurfaced as a means to control capitalism through grassroots efforts, and offer solutions for workers to advocate for their rights
Cooperatives Today
It’s clear that today, our cultural business sense is pretty far removed from the Rochdale Principles. Within the liquor industry, brewery and distillery profits are often made at the expense of worker’s lives, and the environment. Specifically for the creation of rum, sugarcane is a global commodity grown on a massive scale as a resource draining crop. The molasses derived from this sugarcane is then traded on a global market to maximize profits for a select few.
Furthermore, workers, in addition to farmers, are not compensated fairly for their contribution to the final bottled product. This means a large majority of profits in the liquor industry are reserved for a small number of people. This production model of liquor creates adversity for farmers and local communities, builds economies that favor the wealthy, and ultimately produces poorer quality products.
This is why Chicago Cane Cooperative is a worker cooperative. We see the democratic values of worker ownership as a vital part of a healthy and functioning society for all. But seeing the value of a democratic process is different from living and realizing that value. Our society frankly does not have many models of healthy democracy, so our collective baseline understanding can be a bit skewed. A democratic process of disagreeing in productive ways is challenging. But it is through that difficulty that people emerge more connected, committed, and compassionate. Worker ownership isn’t only about giving workers a stake in the business, it’s about building a collective of people who share values and respect differences.
How Do Cooperatives Perform
I’m not sure many people would necessarily disagree or be upset about anything in this blog so far. But supporting these ideas does not mean they will be adopted into existing business practices. This is because many believe worker ownership stymies business growth. The reality is, we don’t totally know. Given how few worker owned businesses exist, it’s no surprise we don’t have lots of data on the success of these businesses. One comprehensive study gives a window into the possibilities. This study, published in the Harvard Business Review, looks at a broad category of worker ownership; Employee Stock Ownership Plan (EOSP). This type of business offers stock options for employees but does not necessarily provide ownership or voting rights to its workers. Nonetheless, the article summarizes:
“Not only have workers gained financially, but we can prove that ESOP companies have grown much faster than they would have without their ownership plans. We have found, moreover, that ESOP companies grow fastest when ownership is combined with a program for worker participation. A synergy emerges between the two: ownership provides a strong incentive for employees to work productively, and opportunities for participation enhance productivity by providing channels for workers’ ideas and talents.”
What is to be done?
This blog post is far from comprehensive, so the first thing to be done is follow your intuition. If you want to learn more, check out some resources below or reach out to us (sean@chicagocane.com). The principles of worker ownership are rooted in the idea that we all have something to offer. So keep following your gut and find ways to create a better work culture by embodying that truth in your own daily life. Use resources to gather more like-minded folks, and convince those around you to become a part of a collective. Whether this is realized through unions, cooperative ownership, or just plain talking through the grit of life while enjoying a fresh cold one, it’s the action and attention that brings us closer to an equitable society.
Resources
ChiCommons | List of Chicago-based Cooperatives
US Federation of Worker Cooperatives
Nonprofit Quarterly | The Transformative Power of Worker Ownership
National Center for Employee Ownership
Project Equity
