Worker-owned businesses becoming viable options

 Bill Knight column for 9-9, 10 or 11, 2021

 Despite living in a nation that reveres democracy, most Americans have few rights on the job, as if a big chunk of each week is lived in a dictatorship.

However, a commercial structure that can balance workers’ well-being and the bottom line exists – worker co-ops. There, ideally, worker-members share equally in profits and have influence on decisions.

“Employees who own the businesses where they work have a share in the wealth they help create, and that connection makes companies stronger, more stable, and more rooted in their communities,” said Mary Boettcher, Board Chair for the National Center for Employee Ownership (NCEO).

Employee-owned enterprises vary widely, though, from informal community food co-ops to the 265-location Hy-Vee supermarket chain, from Soviet-era “collective farms” to Chicago’s successful ChiFresh Kitchen, where formerly incarcerated women in a worker co-op prepare 1,000 healthy meals each week.

An inspiring example is the Rural Electric Administration cooperatives. Since the 1930s, REA co-ops have brought electricity to rural America and maintained its systems, with a slogan “owned by those we serve.”

A disappointing version was the Peoria Journal Star. For much of the 1980s and ’90s, the daily newspaper had an Employee Stock Ownership Plan, but it was set up so employees could not “vote their shares,” and a requirement for the corporation to re-purchase its stock from departing employees ultimately forced it to sell to a chain.

As Boston College professor David Ellerman wrote in 1985, there’s a difference between Employee Stock Ownership Plans and cooperatives – “ESOPs & Co-ops” – “worker capitalism” vs. “worker democracy.”

In Cleveland, the Great Lakes Brewing Company technically is employee-owned, but feelings by workers that they had no “place at the table” caused staff to unionize.

Founded in 1986, the company now has the Great Lakes Organizing Committee seeking recognition or a National Labor Relations Board election.

“This is about giving us a voice,” a GLOC activist told the Cleveland Scene alternative weekly, “but we also feel that a union would be good for business.”

Business in this country usually means a lot of people are constantly on the edge of financial ruin. Regardless of circumstances, you better show up to work or you’ll lose pay or the job. Then you won’t have health insurance or could face eviction. That’s reality.

A worker cooperative is an alternative, said Janine Jackson, program director of Fairness and Accuracy in Reporting (FAIR) – “the way they treat workers, and productivity and the balance of worker health and company success, in a pandemic and every day.

“COVID laid bare a number of conflicts, hypocrisies and frank inequities that ‘normal times’ kept hidden,” she continued. “Some faceless thing called ‘the economy’ could demand that people return to work but would not be responsible for protecting their lives and their health when they did.”

During the 20-months of the COVID pandemic, worker-owned co-ops have become more popular.

Worker-owned cooperatives make up only a tiny slice of U.S. businesses, but COVID has helped make them seem viable options.

“Given new extremes of income inequality, corporate consolidation, and union-busting – and with what work is available being increasingly unstable and episodic – it’s no wonder that people are drawn to a model that returns them power,” wrote Alissa Quart in Mother Jones magazine.

That interest has spurred a boom; a 2019 survey the U.S. Federation of Worker Cooperatives helped conduct found 465 such enterprises – a 36% jump in five years.

“It’s typical of what people do when their government is unable to meet the moment,” said USFWC policy director Mo Manklang.

In Washington, a bipartisan proposal to encourage employee-owned businesses was introduced this summer: the Promotion and Expansion of Private Employee Ownership Act (HR 4141), targeting S Corporation Employee Stock Ownership Plans (S-ESOPs).

“Kickstarting our economy and creating jobs is a top priority as we work to build back stronger from this pandemic,” said sponsor Congressman Ron Kind (D-Wis.), “and the evidence is clear that S-ESOPs help companies grow faster while ensuring a more financially secure future for workers.”    

HR 4141 would provide incentives to qualifying companies to sell stock of their companies to their employees, creating an S-ESOP.

Congressman Jason Smith, one of the bill’s three Republican co-sponsors, along with two other Democrats, added, “This legislation builds on the success of ESOPs in giving employees a stake in the businesses where they work.”

Meanwhile, Jaisal Noor, a Real News Network reporter, has said that co-op business operations give “a sense of ownership to the workers” when decisions are made democratically, which ultimately improves the quality of their products,” and he produced a 25-minute special report, “Worker Co-ops vs. COVID,” documenting eight co-ops in four states and how these workplaces have kept workers safe during the pandemic.

It can be viewed at: https://therealnews.com/worker-cooperatives-prove-your-job-doesnt-have-to-be-hell?fbclid=IwAR1IVk1Pfe7kwePN8J8M-zOiaX_K-k0tZJoPTmPP1a_U_XE4zINH_X9ddm0