All About Co-ops: Worker Co-operatives
By the Canadian Worker Co-operative Federation.
Worker co-operatives are businesses that are owned and democratically controlled by the members. The main purpose of a worker co-operative is to provide employment for its members through operating an enterprise that follows the Co-operative Principles and Values. When new employees join the business, after a successful probationary period they are encouraged to apply for membership. The worker co-op is, in principle, designed to provide benefits not just to the founding members but also to all future employees/members.
To create their worker co-op, members combine their skills, interests and experiences to achieve mutual goals such as creating jobs for themselves, providing a community service and increasing democracy in the workplace. The variety of enterprises operating as worker co-ops is very broad. Virtually any enterprise can be organized as a worker co-operative. The worker co-op idea can work for you if you have a marketable product, start-up capital and a plan for organization and growth.
Each member purchases a membership share, or pays a membership fee, and has one vote no matter how many shares they own. Through the democratic governance of the co-op, all members have equal opportunity to affect the way the business is run and to offer input on the decisions affecting their everyday work lives. Because they develop the policies that determine the co-operative’s daily and long-term operation, trust, communication and co-operation are vital to the co-op’s success. The co-op’s assets are collectively owned and surplus earnings are allocated to the workers according to the bylaws and policies established by the co-op, often in proportion to hours worked by members and with limited return on shares and member loans.
Worker co-ops differ substantially from conventional businesses. A conventional business’s primary aim is to make profit for the owner(s)/shareholders who may be – but in many cases are not – employed by the business. Such an owner’s or shareholder’s voting control and share of profit is based on the amount of money invested, not for any services that they provide to the business. This is a fundamental difference, as in conventional businesses the ultimate authority rests with a single individual, or with a small group, and the business decisions are based upon maximizing their benefit and profit as owners/shareholders. Any profit sharing with the workers or with the broader community is at the owner’s sole discretion.
In summary, worker co-operatives are a radical break from the conventional business model. The worker co-op’s primary goal in operating an enterprise is for service to its employees and its community rather than in service to the owners of capital. The goal is to provide the best possible employment conditions for the members and to provide the customers and community with a service or product at a fair price that meets their needs and leads to a sustainable community.