Worker cooperative
Robert Owen, considered by many as the father of the cooperative movement, made his fortune in the cotton trade but believed in putting his workers in a good environment with access to education for themselves and their children.
[7] As the mechanization of the Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food items they could not otherwise afford.
When the current cooperative movement resurfaced in the 1960s, it developed mostly on a new system of "collective ownership" where par value shares were issued as symbols of egalitarian voting rights.
[22][23] A 2006 study found that wages on co-ops pay in Italy were 15 to 16 percent lower than those that capitalist firms paid on average, and were more volatile, while employment was more stable.
[28] In France, the pay ratio between the highest and lowest paid 10% of the employees is 14% lower in worker cooperatives than in otherwise similar conventional firms.
[29] According to Virginie Pérotin's research which looked at two decades worth of international data, worker cooperatives are more productive than conventional businesses.
A 1995 study of worker cooperatives in the timber industry in Washington, USA found that "co-ops are more efficient than the principal conventional firms by between 6 and 14 percent".
[30] According to a study drawing on a questionnaire from the population of the Italian province of Trento, worker cooperatives are the only form of enterprise that fosters social trust between employees.
[31] A survey conducted in Seoul suggests that in conventional firms, employees become less committed to their job as their work becomes more demanding; however, this was not the case in worker cooperatives.
[37] A 1995 analysis published in Ecological Economics suggests that "cooperatives will tend to use natural resource inputs more efficiently and will be less growth oriented than corporations.
Indeed, Adams et al. see workers' cooperatives as "labor-ist" rather than "capital-ist": "Labor is the hiring factor, therefore the voting and property rights are assigned to the people who do the work and not to capital, even though the worker-members supply capital through membership fees and retained earnings...Any profit or loss after normal operating expenses is assigned to members on the basis of their labor contribution.
[50] The principle of common ownership was codified in UK law in the Industrial Common Ownership Act 1976 which defines a "common ownership enterprise" as: a body as to which the registrar has given, and has not revoked, a certificate stating that he is satisfied— The principle is typically implemented through inserting two clauses in a company's memorandum of association, or an industrial and provident society's rules: A very significant early influence on the movement has been the Scott Bader Commonwealth, a composites and specialty polymer plastics manufacturing company in Wellingborough, Northamptonshire, which its owner Ernest Bader gave to the workforce in installments through the late 1950s to early 1960s.
Contrary to the popular concept of common ownership organizations as being small organisations, this is a high-technology chemical manufacturer whose turnover has exceeded £100 million per annum since the early 1990s with a workforce of hundreds.
[53] ICA's are typically equal to a specific term's wages, like an annual salary, that is given a fixed rate of return that is not directly tied to the cooperative's losses or profits.
[54] Cooperatives in low-income communities often raise donations to assist workers in meeting the ICA Buy-In requirement, as in the case of the Mariposa Food Coop.
[56] In certain cases, like the Mumbai Tiffin Box Supplier's Association in India, Member Buy-In's allow cooperatives to become completely financially independent from other sources of investment.
The government of Kerala[59] and the Khadi Development and Village Industries Commission[57] in India often provide initial loans for cooperatives in order to help them eventually transition into relying primarily on Internal Capital Accounts.
[65] When the owner of a traditional business decides to resign and transition the ownership of the firm into a workers' cooperative, they often provide initial financial investment.
[58] Examples of this method of financing include Select Machines, Inc.,[66] Metis Construction, A Slice of New York, and Rock City Roasters.
The classic theoretical contributions of such a "labor managed firm" (LMF) model are due to Benjamin Ward and Jaroslav Vanek.
But such a scenario implies "perverse" behavior, such as laying off workers when output price rises so as to divide increased profits among fewer members.
[85] Workers at cooperatives tend to report higher levels of involvement in their tasks, more positive evaluations of supervisors and greater fairness in their perception of the amount of wages they received and methods of payment.
Other cooperatives whose names are generally known to include the magazines Alternatives économiques and Les Dernières Nouvelles d'Alsace, the driving school ECF CERCA and the toy manufacturer "Moulin Roty".
[94] Pencavel et al. (2006) found that in the north of Italy, the area where the most co-ops are located, employing around over 4% of the labour force, actually paid their workers 14% less than capitalist firms and their wages were more volatile.
[98] A small number of such co-operatives were formed during the 1974 Labour Government as worker takeovers[99] following the bankruptcy of a private firm in a desperate attempt to save the jobs at risk.
[107][108] The Freedom Quilting Bee was a notable cooperative founded in Alabama during the midst of the Civil Rights movement, and was instrumental in helping underprivileged black workers in the area escape poverty, amassing enough success to fill orders for major department stores such as Sears while helping to spark contemporary interest in quilting.
From day one, he made sure to give them cheap start-up credit, technical training, and preferential treatment with government purchases of goods and equipment.
[114] In response to the economic crisis in Argentina, many Argentinian workers occupied the premises of bankrupt businesses and began to run them as worker-owned cooperatives.
For example, the worker-owners of FaSinPat voted to use excess profits to establish education programs, healthcare facilities, and recreational activities for its neighborhood.
These distinctions are easily seen when measured by essential elements of commerce: purpose, organization, ownership, control, sources of capital, distribution of profits, dividends, operational practices, and tax treatment.
