How Worker Co-ops Work

Welcome to Stuff you Should Know, a production of iHeartRadio.

Hey, and welcome to the podcast. I'm Josh, and there's Chuck and Jerry's here too, and this is stuff you should know. And it turns out that this is the stuff you should know about worker cooperatives, but you might be more familiar with as co ops, not coops. That's why they put the hyphen in there, because it can get pretty confusing.

Yeah.

In fact, I went back when I titled this episode for Jerry and added that hyphen because Jerry would say, what is this think about coops?

Yep, yep, And I'm sure Aaron Cooper's like, oh, but don't get your hopes up, Aaron, We're not talking about you. Wait, we just did it. Spinally happened. So Chuck, just let me lay the scene here for a second. Okay, Because co ops, especially for those of us in the United States, they are like I can think of one, and that is in Atlanta, and it is called Sevenanda, and it is one of the few vegetarian grocery stores in the entire country. That's my experience with a co op, right.

Yeah, Sevenonda legendary store.

It is, and it's great. A great, great grocery store. So they're kind of like this almost like fringe thing, especially in the US, and you know basically everywhere they're not really mainstream. But there was a time where there are people who are like, this is the way to go,

Yeah, well you forgot the last part of that little descriptor, which is they get the money the profit from that said business because they're the owners.

Yeah, that's true. Yeah, and we don't really question that, although that's a little more easily questioned, you know.

Yeah, but you know that pushed co ops now in the United States to this fringe area where you might have a you know, you kind of look at them as or at least I do, as like these little hippie operations, sure like Sevenanda, like this little vegetarian grocery store that has been in little five Points since I mean, it's got to be since the seventies, don't.

You think it sure seems that way.

Yes, yeah, I.

Mean some of the stuff on the shelves looks like it's been there since the seventies.

For sure. It's definitely got that well lived in feel for sure.

Yeah, it's great, but that yeah, it's a fringe thing for the United States. And I guess we could go back in time a little bit and talk about where these were this idea was.

Sort of born. And I know we've talked about Owenism before, haven't we.

I don't know if we've talked about Owenism, but we've definitely talked about the Chartists. But I mean, we've talked about so many utopian societies from the nineteenth century who can keep track.

Yeah, I guess you're right, or maybe I'm thinking of I don't know, one of those other ones. But yeah, this was a utopian sort of philosophy. Owenism named after a guy named Owen, Robert Owen. He was a Welsh mill owner and he had this vision that you were kind of talking about, like, hey, it's it's early on, it's in eighteen twenty five, and there's a way forward that could be great for everyone. He tried this out in New Harmony, Indiana, like I said, in eighteen twenty five, for the first time.

Yeah, it didn't really live very long. New Harmony, Indiana is still there. It's not a utopian society any long ago, though it looks like a nice town based on its website. But his whole idea was like what happens if everybody kind of takes care of everybody else in this again mill. I think he was a mill owner to where like your children are schooled and fed, and you have opportunities for education outside of your work, and he found that

Yeah, sure, sure. I don't know if they were using the S word back then.

I don't know how much we're going to use the S word, but it's impossible to, I think, not use the word socialism at some point when talking about at least some of these early ideas, because they were very much sort of socialist ideas of let's take like you said, let's take care of everyone, let's have all boats rise and everyone chip in, sort of in a hippie commune kind of way.

Initially, Yeah, and I was I was thinking about that. I read something that was basically like, this is socialism in its purest form. It's not like a planned central government or planned society. It's more just like, hey, let's all take care of each other, let's all contribute, let's all benefit. That's about the extent of it. And I was thinking about socialism too, the way that you just basically danced around it like we do in the United

Yeah, you know.

Yeah, here's your socialist get here's here's mediocre everything. Just open it up and enjoy your mediocre life with mediocre things, because nothing is awesome because capitalists aren't in charge of making things perfect or great. Right, all right, So we talked briefly about Robert Owen with this short lived sort of hippie commune and New Harmony, and you mentioned that that inspired people and at least uh, you know, overseas and you know in England and here in America, but

They wove flannel.

It was a big seed of flannel manufacturing for like hundreds of years. And they started staging the workers there, started staging strikes kind of when industrialization hit, because you mentioned that the beginnings of co ops were kind of lockstep with the beginnings of the industrial revolution.

Yes, for sure, because there was this idea that like, okay, you like, you don't have to submit yourself to wage labor. Your work is valuable. You should own your own work and lease it out as you see fit. That was kind of the way that they were thinking. And so the weavers ended up forming I think sixty of them got together and formed the Rochdale Friendly Cooperative Society. And I'm sure, just based on experience, we're mispronouncing. It's probably

Yeah, this one, the Friendly Cooperative Society didn't last long. That store was just a couple of years. I think it was eighteen thirty when it opened. And about fourteen years later they got together and they tried it again. There were some people from that original society. They got together with other people who were you know, unemployed or facing poverty or hungry. So some of those owenites and

And they had to And you'll see that.

This is kind of a it's not always because all co ops, you know, operate in their own way, but they had to pay to be a part of it, so everybody chips in a little bit of money. In this case for the Society of Equable Pioneers, it was just one pound each. And they got it going and said, hey, we're going to do the kind of the same thing.

And it was very much in that Owenite model.

Yeah, so they went from just being a co op store to trying to get a whole utopian community formed, and again that didn't go very far. I don't know that there is any utopian community that's still around today. They don't seem to last very long. Maybe there's no such thing as utopia. Yeah, but that store model became like just what all co ops were based on after that, and in fact, the Rochdale Pioneers Cooperative store mushroomed into what's now called today the Cooperative Group, which is a

I think so, yeah group, Yeah, yeah, And you know, you'll see that as a common thing too. Where the largest co ops in the world, and we'll talk about some later on in Spain and India are groups of co ops that have formed larger co ops because the whole idea is that you know, there's a lot more you can get done with a lot more people, obviously.

Yeah, or a lot more companies. Like the different companies can stand in for different individual workers, you know, I think it's neat.

So in the United States, it was really post Civil War when things started to boom, and in particular Black Americans after the Civil War were the ones who kind of got this idea going because they were obviously, you know, post Civil War, having a hard time with wide owned businesses being treated poorly obviously, and they're like, well, why

Yeah. Calkers were the people who worked in shipyards that waterproof the ships, make sure they didn't leak, right, And it was traditionally a black dominated profession, but black people were starting to get edged out in shipyards. So this Colored Calkers Trade Union Society just decided to buy a shipyard themselves so that they could employ black calkers, and they did exactly that. They also bought railways and just started founding this huge, essentially cooperative empire of black workers

I think they're also the ones who coined the contractors term calk and paint will make it what it ain't.

I've not heard that one.

Have you never heard that?

No? Did you make it up?

Oh? No, no, No, that's really Yeah.

There's two contractor terms that basically mean you're getting kind of shoddy work, right, calkin pain, I'll make it what it ain't. And my favorite one, which is I can't see it from my house.

Oh that's an app for that one.

That one really stings.

Yeah, it especially when they're talking about your work.

Yeah, exactly.

Well at any rate, Yes, the Caukers did come up with that. I believe that's right. So your initial statement, Yeah.

Things got going on a larger scale after that when farmers started banding together, and in this case, post Civil War, black farmers were excluded from the Southern Farmers Alliance and they formed the Colored Farmers National Alliance and Cooperative Society, which had a million members or more by eighteen ninety one. And this wasn't sort of a strict, you know, definition

Yeah. And because they were dealing with the Jim Crow South, post Civil War South and all of that, they were basically faced with an option like just submit yourself to like really bad treatment, or figure out how to come together. You don't have to know about co ops throughout history to come up with your own co op. It's actually like a general idea that any group would stumble upon, typically when they're being mistreated or when they don't have

Yeah, and this was like, this is spreading as a philosophy more so than like all these like concrete examples of like literal co ops that would come a little bit later. But one of those other sort of ideas that was spreading mixed in with this was something called labor republicanism, and that was just you know, aligning with this sort of the idea that hey, you know, if you want real freedom, then you need to be able to control your work and just be a wage laborer.

Right, You own that work, That's what I was talking about earlier. You own that work, you lease it out as you see fit. You're not submitting yourself to wage slavery. Like, that's what that's all about. Apparently there's a debate going on still today between labor republicanism and just universal basic income, which one is actually the way to actual freedom from being dominated by some boss.

Yeah, for sure.

It's also tied into the rise of unions and unionism for sure, don't you think.

Yeah, there's the Knights of Labor, which was basically the first massive union in the United States that came close to a million members by the eighteen eighties. Their whole thing was essentially setting up worker cooperatives, like creating an economy in the United States based around co ops, collectives, things like labor republicanism. That's exactly what they were about.

Yeah, and that was less like hey, let's you know, get rid of these bosses and make a co op, and it was like, let's try and find a way to work with them, and you know, and true union style like get fair pay and all that kind of stuff, which is great, but just sort of strayed from that co op idea a little bit more. And I think in eighteen ninety five was when finally the International Cooperative Alliance was formed.

Sure, and that was you know.

These are this is like a worldwide organization, obviously international.

Sure, what if they were just based in Topeka with none but they're shooting for the sky.

Yeah, that'd be fun.

You want to take a break, Yeah.

We'll take a break and we'll talk a little bit sort of how these things work right after this.

All right, we're back to talk.

Who helped this is Libby, I think, and she called this section nuts and bolts because that's exactly what it is.

Sure.

These are all sort of listed under the Roachdale Principles of Cooperation, which the ICA, the International Cooperative Alliance, adopted in nineteen ninety five. And it's a series of bullet points basically of generally how co ops can work. But like I said, they're all they all have their own nuances. But the first one is probably true across all cases. You have a membership that is voluntary and anyone can join as long as they fit the bill, like you can't discriminate.

Yeah, there are some slight differences among co ops that as these bullet points start to spread out, that one seems to be like that's the that's a common universality, you know. Yeah, there's also another one. They need to be run democratically with one vote per member.

Mm hmm.

There's another way to do it that some co ops choose where the more shares you have, the more votes you have, so one share equals one vote rather than one worker equals one vote. So one worker can amass ten shares and they'll have ten votes opposed to the other workers who just have one share each for sure.

And that capital that you have is also controlled democratically and should serve the organization's goals and not just you know, the CEO or whatever.

Right, Like, if you're if your honeymakers, you wouldn't want to use your profits to invest in like an up and coming b extermination out of it? It makes sense. Yeah, you also want to be autonomous. I love this one too, Like it doesn't matter who you sign a contract with, whether it's a government contractor with another business, a corporate vulture who cares, there's nothing in that contract that can

Yeah, that's great.

Another thing that you have to do is you got to train up your folks, got to coach them up so they can all be contributors. And then you know, another part of that is just letting people know what's going on that you're you're not some weird fringe group. But educate the people on what sort of the benefits of cooperative.

Work, right, and then they're like all co ops smell like this. Yeah, and then you want to work with other cooperatives. That's a big one. I mean supporting one another because it even in societies where they really support co ops there they still have the decks stacked against them. So the more they can rely on other co ops on each other, the better off each co op is.

Going to be you know, yeah for sure. And they always give back to the community.

It seems like, you know, that's part of getting the word out is doing like good work in the community. And so they so people see like, oh, this is that co op that's doing you know, the park cleanup or you know, any anything sort of like that.

And here's the deal.

You know, we said, there's a lot of different ways you can structure these not you know, if you see there's a co op, it doesn't mean every single person that's working there that day is a member owner because a lot of times you have to kind of prove you're in it for the long haul, like there's a probationary period. Sometimes you have to buy into it financially, but not always. And also sometimes you either you're either buying in financially and or being voted in by existing members.

Yes, by Biff, that's right.

And sort of the final thing is how it works the structure at the top, because you know, even though it's a co op, you still need to have kind of people near the top in charge of the higher you know, upper management sort of decisions, especially if they're you know, larger co ops, because you know, you can have some smaller co ops that are a little more like you know, probably like Sevenonda, where you have workers that are voting directly on just about everything that.

Happens with a co op.

But the bigger you get, the more you might see a structure where those workers aren't voting on everything directly, but they're electing some of their own to sort of act as the executive branch or maybe who like you know, go out and hire a leadership staff or form a board or something like that. But they're voting on the people that do that. And you know, ideally, and I think usually in most cases they're they're bringing in the

Right, We're going to bring in a young hot shot fresh out of a private equity firm to take over.

Not a good idea.

And again it's like some co ops face easier goes of it, and depending on the country you're in, and depending even on the state, it can be easier than others. If you're in the Pacific Northwest, you can turn to the Northwest Cooperative Development Center and Cooperative Fund of the Northeast. It just keeps going and they'll essentially tell you how to convert your business into a co op, which you can do if you have an existing business, how to start a co op from scratch, all the ins and outs,

Co op ops.

Yeah, so you know, there are definitely some efforts in the United States to assist people that have these ideas, it's just not as robust as like in other countries. And speaking of other countries, I know we talked about Spain early on, and that is the home of the largest and most prominent co op in the world, basically, which is the I'm gonna say Mandragon.

That's what I would say too, not.

The Mandragon, even though that's way cooler.

So it is, and that's how I want to put it too.

Yeah, but the Mandragon Corporation is a collective. Again, this is one of those it's a bunch of co ops that got together to make a larger co op in the Basque region of Spain. And it's named for the town of Mandragon.

Yes, And it was founded by Jose Maria Rismonda Rieta. That is quite a name, nice, believe me. I know he is a priest or. He was a priest who was actually started out as a journalist writing against the fascists against the Franco regime in the Spanish Civil War in the thirties. After the war, he became a priest and he was assigned to the town of mandra Gone in nineteen forty one and he said, hey, mandra Gone, we are going to go capital s word all the way in this town.

Yeah, he you know, doing good stuff, like hey, let's create a medical clinic, let's get some housing going for these people. What about technical schools in education to like lift everybody up. And in nineteen fifty six, there were five workers who had been part of this, you know, planned with him, and they created a cooperative company to make kerosene heaters. That's how they got their start, the biggest one in the world. Started out making kerosene heaters initially.

Yeah, for sure, and then it just started to grow from there. They created their own pension and healthcare systems. Essentially, every time the town faced a problem, they needed something like funding for a new co op and they couldn't get it from the outside world. They just did it themselves. So each new problem, each new obstacle, saw a co op founded to address it, and it just it just kept growing and growing from there, and eventually it became

Yeah, and how it works for them.

They are one of the ones that has one of those probationary periods before you can become a member. And once you've done that, you are a shareholder. You are a worker and a shareholder in that company, and you're voting on you know, all the stuff it takes to run a corporation, business strategies, what kind of money people make. Everyone gets an equal vote. They do have a governing council, and that one because you know, it's a big, unwheeled so they need they need sort of a higher up council.

Yeah, it's pretty impressive. They also share the co ops profits the member owners, and they have to make difficult choices. This is something that co ops are are good at like this. This is why co ops are pro worker. Like. If there's a hard time, an economic downturn or something like that and sales are down, profits are down, most capitalist companies just lay people off. They ramp up a lot of works in like fat times, and then they just cut them in lean times. Co Ops don't tend

Yeah, for sure.

And they you know, they've had to change things a little bit over the years. That ratio I think that I said with six to one, that's an increase. It used to be a three to one ratio of the highest paid to the lowest paid worker. So they've had to roll with the times a little bit. But six to one is still way different than three hundred and fifty to one for sure.

So this is the far and away the largest. There's the second largest is nothing to sneeze at either the or A lungo labor contract Cooperative Society founded in Kerala, India, has about eighteen thousand employees and it was founded back in nineteen twenty five while the Brits were still ruling India as a colony, and some of the workers from the lower casts I think sixteen of them got together to pool their money and said, hey, we're going to

Yeah, for sure.

The first Prime Minister of India, Nehru was was basically very much into the idea of these workers co ops and farmers co ops, and you know, did a lot to encourage and incentivize these popping up over there. I think there are a ton of Indian cooperatives and this is just the biggest one at like eighteen thousand employees.

Right, Yeah, Yeah. Nehru also encouraged people to rethink their jackets.

Oh man, those are good looking. I can't get away with those, but those are cool.

Okay. So that's India. I guess that's kind of second to Spain, like we said, at least as far as the largest co ops go. But Italy I would say, is possibly the country that supports co ops the most. On a societal level.

It seems like there's that.

S word streak still running through Italy to a large degree.

Sure. Yeah, yeah, So the Italian government gives financial incentives to start and run a co op. There's laws that say if you don't run a co op, you have to give up one of your kids. They're really pro co op. They also this is another thing too that some co ops come out of, where a company will be failing and the owners will be like, well that's it for me, I'm ruined, and the employees will be like, well, we still have some money that we can put together.

Yeah, that's a big thing that happened in Argentina, and I sort of remember this in the early two thousands when Argentina was having such a rough time. A lot of workers were laid off in the industrial sector and they were did what you were just talking about. They were like, well, hey, this factory is going out of business, so let's as employees get together and buy these things.

Yeah. What's cool about the Argentinian model too, is I think they actually took over these companies. They were all laid off and they're like, oh yeah, watch this. I think that's pretty neat. Yeah. Mexico is well known for fishing cooperatives. This happens around the world, but Mexico has some pretty strong ones. And one of the cool things is that there's often lax enforcement of things like sustainability

So you want to take another break.

Oh yeah, I didn't see that coming.

All right, we'll come back right after this, and Josh, we'll speak first, because that's how we do things.

So Chuck, it's probably not a surprise, as we've seen compared to other countries, the United States is not exactly up to speed. As far as co ops are concerned, there's potentially seven to ten thousand Americans out of what three hundred and sixty somethingter million who are employees and co ops in the United States. That's not a very significant number, but there are the people who are employed there are happier than you will ever be in your entire life. Yeah.

Probably.

So.

The largest one in the United States is the Cooperative Home Care Associates started in the Bronx in nineteen eighty five when twelve home health aids came together and said, hey, there's got to be a better way, and they started recruiting people and they've got Wow. Out of that seven to ten thousand, two thousand of them work for the UHCA.

Yeah, and then they also typically hire women of color and immigrants, usually low income, and train them to be home health aids. And then eventually, with a one thousand dollars payment, you can buy in and become a worker member owner. And they tend to have people have compared this model to actually this company to other home health aid companies, and the workers tend to have greater job satisfaction.

Yeah, for sure, there are some other cool examples here I'm going to jump to. I know you know where I'm going because Olivia included the podcast company Maximum Fun. Longtime supporters of stuff you should know. Maximum Fun was had a single sole owner in Jesse Thorn. Yeah, he was mogul very early on. He's the guy that set up Mark Marin initially in his garage with equipment and was like, here's how you do podcasting. So Jesse's a

Yeah, which is pretty cool. I mean even before that he had basically transferred ownership of the individual shows to the show creators and then so it was a I guess kind of an easy, easyish leap into a co op from there. So hats off Jesse Thorn and all the peeps at Max Fun.

That's right.

If you happened to be up in Maine along the coast and you're island hopper. I could not find exactly what islands, but there is a trio of stores, the Galley, VNS Variety and Burnt Cove Market, and all three of them are worker owned and operated. And there it was one of those situations where all three stores were being sold and the owners couldn't find any buyers, and then

I don't think Maine has many islands, so I'm surprised you didn't find out what the deal was.

I saw that the thing was headquartered and I think Stonington, Maine, but I didn't see what island that was on, and who knows could be the mainland for all I know, I'm not a up up northeaster and up easter.

A manor Yeah, across the pond, you're from away, I think that is what they say.

Yeah, I know, I cannot tell you how much murder, she wrote, I've seen in my life, and I still was that picked up the lingo. Oh yeah, cabin cokain.

Yeah.

I never, as you know, never saw a single episode of murder. She wrote very sad about that.

I didn't know that, and I see you differently now.

I need to I need to check it out. I know it's a classic.

By way, I think my delivery might have been so dry that we're going to get Germany as landlocked emails. I know there are thousands of islands off of Maine, by the way.

Oh, okay, you got me, You fooled me, Chuck.

We should talk just at least mention aesops or employee stock ownership plans.

Yeah, this isn't the same as a.

Co op because you're you're generally not getting like a vote on things and how things run. But it's employees owning the business. And our beloved Public's supermarket chain is easily the largest employee owned company in the United States. I think they owned about employees of Public's owned about eighty percent of the company, which is a lot.

Yeah, it's like they have stock, but rather than being publicly traded, you have to be in a Public's employee to buy and own public stock, and pretty cool. A lot of people retire pretty well to do because of the public stock that they've accrued over their career and it is. It's great for sure.

Yeah.

ACE Hardware that's another kind of cool, and that's you know, they're independent retailers, and I think most people know that because your local ACE Hardware is is owned and operated by somebody who lives there, which is kind of a cool model.

Yeah. Like, try buying something at one ACE and then taking it back at the other ACE. You're going to be sorely disappointed, my friend? Is that true? Oh? Yeah? They? Oh, I didn't know that I bought something. I should say. You and me bought something at an ACE and I took it to the other ACE owned by the same company, and because we bought it online, they could not they could not return it.

Oh interesting, I don't think I knew that.

Okay, yeah, be careful. You have to go back to the same ACE. It says it like on the sign. Yeah. ACE is the place and the only place.

The helpful hardware folks.

Isn't that? Yeah? It is?

Should we end on a few pros and cons?

Oh, I just real quick want to shout out a couple of co ops that are nonprofits. Subvert is an alternative to band camp. It's musician owned and then fair, which I think is a clever use of the term. It's fare. They're an alternative to like Uber and Lyft, and they're co ops. Oh okay, yeah, there you go.

Yeah. I mean that's I got to check out and see affairs in Atlanta.

Okay, okay, I don't use Uber.

I use Lyft, but I've heard they're bad now too, So it's I just don't even know who to get rides from when I've had too much to drink anymore.

Yeah. I used to do Lyft because supposedly they treated their people better. And I was talking to a lift driver once He's like, no, Lyft is terrible. Now Uber's nice to their drivers, and it's like, wow, who can keep up with this? So I guess, yeah, just take fair all.

Right, I'm gonna check that out.

Pros and cons now, yes, all right, well we've mentioned some of these along the way. But one pro is, you know one we touched on, which was that ratio between the highest paid worker and the lowest paid worker. They're definitely you know, the co ops. You're not going to see things just so out of whack in terms of wage earning.

No, that's huge. Another one that's a pro in favor of co ops, not all. All of them are pros and favor of co ops. There are some cons too, Like you said, pros and cons. But if you work for a co op the chances of you getting laid off are pretty low, which you would think like, oh, okay, well, does our co ops just run and work as staffed by lazy people. Turns out no, because as an owner, a part owner of this co op, of this company

Yeah, or what do they call it? Quiet quitting?

Oh I hadn't heard that, but that makes sense.

Yeah.

Quiet quitting is when you're like phoning it in and just doing the bare minimum to not get fired.

Yeah, which is yeah, no good. Everybody.

One con is or I guess you would say it's a pro for a non co op is they tend to be able to move a little quicker and add quicker on stuff if there's a crisis or if there's anything that needs like really fast attention. They don't have to sweat, you know, taking boats and asking everyone and debating what they think. So that can definitely sort of slow down in times of crisis if you're in a co op.

Yes, but that said, you can make quick decisions and be more agile as a traditional capitalist company, but you can also make the wrong decision and go down the

Yeah for sure, and yeah, just job satisfaction.

And we talked about this a few times, but overall people that work for co ops tend to report much happier lives basically when it turned in terms of their jobs.

That's right, I guess that's it for co ops, Chuck, I think so well. We both agreed that that's it for co ops, which means it's time for listener.

Yeah, there's a follow up on the West Kowloon Walled City episode, which I thoroughly enjoyed personally.

Yeah, me too.

Hey, guys, just listen to The episode reminded me of the Ponta I guess po and t or Ponti City Tower and Johannesburg. Ponti City was completed in nineteen seventy five and originally intended to be a luxury development for

Up to the fifth or sixth floor.

When I was visiting friends in Johannesburg back in twenty thirteen, I did a tour of the tower with one of the residents. It's a truly astonishing building with a super interesting story of grandeur and rapid descent into chaos and looks to be coming back again. Ponti has been used for sets of several sci fi films. Neil Blombcamp is a big fan and was also the inspiration for the tower setting of the questionable twenty twelve Dread reboot.

Thanks for the great stuff. That is from Bobby.

Bobby sent in a picture from the interior of the City Tower and it is indeed super sci fi and interesting looking.

I got to check that out, man, I hadn't heard of that at all. That was Bobby, Yeah, Bobby. Well, thanks a lot, Bobby. That was a great email. We appreciate it. And if you want to be like Bobby and tell us about something that we didn't know about, we're always welcoming those. You can send it off to Stuff Podcasts at iHeartRadio dot com.

Stuff you Should Know is a production of iHeartRadio. For more podcasts my heart Radio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.