About six months into the pandemic, an Ohio based cooperative network received an influx of requests from small businesses that wanted to turn themselves into worker owned co ops. For a lot of folks, they have been unhappy with how their current jobs, the current economy has been working for them, and the idea of being part of something truly holding workers as a most important piece is really really attractive.
That's Ellen Vira. She's the director of coop Organizing at co op Sincy, a network of around dozen cooperative businesses in Cincinnati, Ohio, where workers manage, own, and ultimately share in the profits of their labor co ops. Since has been around for about a decade, but in that fall of alone it got applications to help another dozen businesses go coop. One of the businesses that reached out was the Shine Nurture Center, a Monostori style day air next
to the lush mount Airy Forest in Cincinnati. As the pandemic dragged on, its founder and owner wanted to move on. Like many people, she was reevaluating her life and decided to go back to school, but she didn't want to shut down the center she'd built and run for the last six years, so she decided to sell it to the teachers who worked there. My name is Beth Heya. I work here at Shin Nurture Center Cooperative and I'm currently the office manager and we are a nature based center,
so we're mostly outside in Mount Airy. We're very lucky we have a path right out of our parking lots and we get to go back there a lot with the kiddos. Beth is one of four teachers who went from working in the center to owning it. Before, she says she was at the whims of administrators and parents and at times found herself in less than ideal working conditions. Now she's a business owner. She and the other teacher
owners have a say in how things get run. That includes increasing pay and benefits and making sure class rooms aren't understaffed, and at the end of the year, she and the other owners will share in its profits too. There's not a lot of like groping about, like why we're doing something, because we all understand why we got to those steps. You can see why co ops would be attractive during a pandemic that created enormous economic uncertainty.
It gives people some power over their work lives, if they can work from home or take sick days, or when they clock in, and what they get paid. Looking at the childcare crisis, being an educator, there's just a lot of pressure put on childcare and there's not a lot of voice given to the folks who are in charge of it. So I think for post pandemic I think this might be a really good solution for teachers at centers who feel like they want to have a voice. Yet,
cops are still relatively rare in the US. Just around a hundred people work at the companies and coops and see for example. But there is somewhere worker co ops abound and it's a place of notable equality. Mandragone is a group of around a hundred cooperatives in the Basque region of Spain that's been around for half a century. It covers nearly eighty thousand workers across all sorts of industries. Nobody there is wildly rich, but there isn't much poverty either.
It's the kind of place that often gets dismissed as a special place doing a special thing that can't be replicated elsewhere. But now more and more people are thinking maybe they can be the next mandragone jobless claims coming in, I mean really jumping from the week before, pretty brutal, three point to a million record six point six million Americans filed for unemployment last week and then working for
the worst infected by the pandemic. Prices of public housing resail flats have hit an old time high in the first well. Now to the billionaire boom. According to Bloomberg, super riocht charters are up over three and a billionaire was created every twenty six I was during this pandemic. Is time for a wealth tax in America? Welcome back to the paycheck. I'm Rebecca Greenfield. For the last seven weeks, we've gone around the world to see how the pandemic
made things more or less equal. The answer depended on all sorts of variables, a country's pre existing economic conditions, how it managed the virus itself, and what financial decisions were made facing a global economic crisis. In some places, there were some pleasant surprises, like in the US, where the poorest got some stability and economic security for the
first time in decades. In others, like India, economic desperation lad people to make life altering choices that derailed their futures. The question as we head into the next phase of the pandemic is how lasting will any of these trends be. That's what led us to work our own co ops. Interest in worker own co ops tends to spike during times of crisis. At a very basic level, worker co ops they tend to emerge where there's a market failure. That's Mike Paul Mary, an associate researcher at the Ohio
Employee Ownership Center at Kent State University. He says that people who feel left out of the economy seek out alternatives to traditional business models. After the two thousand eight recession, for example, he says, the number of co ops in the US has more than doubled. To him, they are key to closing wealth gaps. A lot of our beIN a quality today is driven by inequality and wealth and assets.
What employee ownership allows you to do and not just provide a higher wage via income, but it gives individuals who otherwise wouldn't have wealth and assets wealth and assets, providing them that cushion and closing that gap as well. And some employe ownership kind of attacks I would say economic inequality at its fruit. While the pandemic isn't over yet. Mike says there's been a notable uptick and interest in
the co op model. People see it as a gateway to greater equality and security when the next pandemic or whatever crisis comes around. But how realistic is that and how did it work? My colleague Jeanette Newman went to the Basque region in Spain to visit them Undergone co ops, the mecca of worker cooperatives, to see how they fared during the pandemic and what lessons can be learned about creating a more equal world. Here she is with the story.
I'm standing on an assembly line watching some workers build washing machines. The company is called fog Or Industrial. It's one of the hundred or so cooperatives that are part of the Moundergo network. One of the workers on the assembly line is Baltasar Garcia Leone. Balta, as he's called, is fifty nine years old. He has a clean shaven head and an athletic build thanks to frequent outings with his cycling buddies. He's been building washing machines at Mundergone
cooperatives for more than three decades. He's telling me how the assembly line works. Balt and his colleagues on the line build twenty two washing machines every day. They're sold to hotels and restaurants. When the pandemic hit, Balta's assembly line, like many around the world, down shifted. Every Friday, they sent us home, so we missed out on a lot of ours. Bolt and his colleagues also worked fewer hours on the days they went into the factory. Those were scary,
uncertain times. Balta was worried about the virus like everyone else, but he was less worried than many people about his paycheck and his savings. Thousands of workers at Mondragon felt the same in those chaotic first months. As COVID nineteen up ended everything around the world, Mundergone was, by comparison, an oasis of calm for workers. The reason moundergone has a playbook to protect jobs that it's been honing for
more than half a century. Mundragon's first cooperative was founded in the nineteen fifties by a priest and some of his acolytes. Since then, crisis after crisis, the cooperatives have found a way to keep unemployment and inequality in check. The pandemic was no exception your Bilk. When I go to other areas, I noticed much greater social differences. Here the manager can be my neighbor. Elsewhere, I guess they
live in gay good communities. Joblessness here is much lower than in the rest of Spain, and the level of income inequality is on par with countries such as Finland and Norway. The differences that the Nordic countries have relatively high taxes they redistribute wealth. In the undergone region, taxes are lower than in the Nordics. The cooperatives create wealth for a lot of people. One way they do that
is by digging up their annual profits among workers. Assembly Line workers like Balta, for example, have retirement savings that are in line with top managers. The objective of the cooperative is not to produce rich people, is to produce rich societies. At the end of the day, even if you are not rich, if you belong to a rich society, you will be happy that he works at Moundergon Assembly. It makes solar panels as well as machinery to help
firms automate their production. Most of the cooperatives in the network are industrial. One of them is even making rocket parts for Blue Origin. That's the aerospace company owned by Jeff Bezos. As a rule, managers across the Moundergone network can only earn six times more than the lowest paid worker. At some places, like yours cooperative, the gap is even smaller three to onegre and many of his colleagues or engineers, they do similar work, he says, so they are in
similar pay or associeties. Here very realitarian. We don't have a lot of rich people are not very rich. But in the other hand, we also don't have poor people. The CEO or the engineer or the man who makes the photocopies. We all belong to the same social group. But how do those egalitarian ideals hold up when times get tough? How did the cooperatives and their worker owners survive the worst economic crisis in a century? I speak
to under Chevita. He's an executive at headquarters called Moundergone Corporation. The corporation overseas the one hundred or so cooperatives that form part of the Moundergone network. When a crisis hits, all the co ops rely on a safety managed by headquarters. Understays. The goal is to preserve jobs and That means the safety net has to be flexible. For that we have different mechanisms. If there is no work for me in my corporative, I have the right to work in another
corporative of the corporation. If there is no work for me in the corporation, I have the right to be trained to be more employable. And if still there is no work for me the corporation, I have the right to get an unemployment benefit for maximum two years. This is great. That does sound great, and under makes it seem so easy, But the cooperative model doesn't always work perfectly. About a decade ago, the co op where Balta was working went bankrupt. It was in the aftermath of the
global recession. That was a wake up call for Balta and many others. Failure is possible. So even when things appear to be running smoothly at Montrigone during the pandemic, in the backup workers minds, the threat of failure loomed. I visit Bolts at his apartment to learn more about how he survived that bankruptcy and the pandemic. He lives just outside the town of Mondragon. The area is surrounded by forested mountain tops which gave way to pastures and farmland.
Further down in the narrow mountain valleys sit box the industrial warehouses where the cooperatives manufacture their products. I ring Bolt's doorbell. All right, we sit down at his kitchen table. He proudly points to a white washing machine from his cooperative tucked underneath the countertop. Balta joined his first co op in n He worked there for more than two decades. In two thousand thirteen, it went bankrupt after struggling through
Spain's double dip recession bolting. Around nine workers lost their jobs. It was the biggest crisis the cooperatives had ever faced. Enjoy of course, I was scared. I had done an interview or two at that time, But I mean I was forty eight years old. I was already pretty old. I thought it was going to be difficult. But Mondragon eventually found new jobs at other cooperatives for most of the workers, including Balta. He got a position at Fogor Industrial,
where he is now. Other workers went into early retirement. Still, the bankruptcy meant that Balta and other members lost the money they had been stashing away for years in their retirement savings. Accounts. That was a lesson for everyone at Mondragone. When a crisis hits, workers after react quickly to show up the finances of their cooperatives and prevent things from getting worse. During the pandemic, Bolton his colleagues tried to put that lesson into practice. In the U S and
other countries. Unemployment spiked in the early days of the pandemic, Business slowed down or came to a halt, and executives had to cut costs, so they laid off workers. Balton other operative members or workers and owners. So it wasn't an option for them to fire themselves, but they still had to find a way to cut costs, otherwise they
could end up saving themselves. But tanking the cooperative seen our interest in every respect that the cooperative does well, our livelihood depends on so making money that has to be the baseline, because a company can have a really nice financial targets, but if it doesn't earn any money in the end, it's gone. It would be destroyed. This
is where Mundergones Crisis playbook kicks in. The leadership team, which is made up of assembly line workers like Balta and members who have more executive experience meant to make a plan. First, they decided to lay off a few dozen workers who aren't members of the cooperative. Only around one third of workers at Undergone are also members. Some people don't qualify. New members have to be voted in
by existing members. If someone as a reputation as being a bit irresponsible or isn't considered a team player, they might not be accepted. Others don't want to pay the roughly sixteen thousand dollars it costs to become a member. That's a kind of down payment to join the cooperative. It goes into a savings fund for the worker. Next. Balta's co op trim salaries on days they didn't work, which ended up being more than anticipated they would get of their salaries. We missed a lot of ours. We
couldn't recover a lot of those hours. How did the co op afford to pay Balta and his colleagues for all those days they didn't work after all revenue had fallen. Wondergoing Headquarters stepped in and tapped a kind of insurance program.
It has co ops that were doing well, such as those producing medical gear and bicycles, transferred funds to co ops like Balta's, where workers had missed a lot of days under the monder going executive we spoke too earlier explains that mechanism we are bright for nine thousand workers in the enemic year and it had a cost of thirteen point to million euros. So when we are talking
about solidarity, it is also about money. Honors comments should dispel any images you might have in your mind of the cooperatives as a kind of utopian commune in the Spanish countryside. On another's at mundergo and talk about money and profits with the same ease as any capitalist. The co ops are first and foremost a business. They need to be profitable. At a publicly traded company, the goal
is to return profits to shareholders. The goal of the cooperatives, by contrast, is to be profitable in order to create and maintain good jobs. Another big difference is how the cooperatives share their profits. Bolton, the other worker owners decide that we gather at an annual general assembly, and that's where a lot of the important issues are presented and are voted on by all of the members. Ahead of the annual meeting, the leadership team comes up with a
proposal to raise, lower, or maintain salaries. They also come up with a plan for profit sharing. Then the leadership team briefs workers, hashing out any disagreements at meetings and around the water cooler. Finally, they all vote. Advocates of worker cooperatives often emphasize the importance of one worker, one vote. That means each member's vote has the same weight. Balta says the phrase gives people an idealized impression of what
actually happens at the annual meetings. It's ultimately the manager who's in charge. I mean, it's very nice to say from the outside that we are represented. I feel qualified to make decisions at my own job, but not at the company level. While Balta doesn't want to be responsible for setting company strategy, he does value having a say and how the company has run, and if workers aren't happy with the leadership team, they can vote them out. I am part of that company. I make decisions. I
vote yes or I vote know. The annual meetings aren't without conflict. Some tensions always emerge when hundreds of people are deciding what to pay themselves. As people are on under going like to say, this is not paradise and we're not angels. Last year, Balta and some colleagues voted against a proposal to increase executive pay. While salary differences in Undergoing are minimal by global standards, Balta worries the
increases are a slippery slope to greater inequality. Okay, okay, I think the differences are getting bigger, and that's what bothers me. I understand that a qualified person has to be paid, but maybe a different system has to be found. In the end, the salary increase went through. Balta is still frustrated about that. But that's democracy, he says. Your
candidate doesn't always win. I think for a minute about an average US company, Then think about a majority of employees at that company voting to cut their salaries during a crisis. It seems like a long shot, right. Some employees would probably say, well, I performed well where my division is thriving, so why should I take a hit. That's different from how workers at Undergone and other worker
cooperatives think about salary cuts. They're also the owners, so a salary cut helps to ensure the survival of their company. It's about shared ownership. Mike Paul Mary, the Kent State co op expert we spoke too earlier, explains there's this democratic component that makes worker cooperatives so much different than
just owning a share in a company. Every person gets one vote regardless of how long they've been there, so it's detached from capital and at the same level, the way that the profits are distributed at the end of the year are based on hours worked, and so it's very equitable. It might seem a little surprising, but if people have a steak in the business doing well, they're going to care more. If you work at a company where the company does great and it does absolutely nothing
for your life, who cares? Whereas where you have a real steak where you will really benefit, people tend to call out sick a lot less that employee on companies. People tend to have a much different relationship with management and employee on companies. They're more likely to say something, and they're more likely to look at their coworker and say, hey, you're kind of slack and you know can let's let's
do something here. And the co ops that are part of the Monergo network are just a fraction of the thousands of co ops located all across the Basque region. Explain worker co ops have flourished in this part of the world in part because shared ownership is an important part of the culture that's different than in the US co ops since he told us they have to hold classes on how to build a culture of solidarity. But in the Basque region, the benefits and responsibilities of owning
something with a group of people are almost second nature. Too. Many people around here uphold these values even when they're having fun. One evening, I joined under the co op executive for dinner. We walked through the town of Mondragone. It's narrow streets are lined with old stone buildings. We're going to go to a club Basque traditional calinary club chocomica. They are a place to be with your friends, colleagues, family, and today. For example, in the town of Manga One,
we are twenty two south Habitans. We have twenty two clubs. Culinary clubs are essentially a private restaurant that's collectively owned and run by a group of acquaintances. The club votes to elect new members and everyone pays a membership fee. We walk down some stairs and come into a big room that looks like a restaurant with long wooden tables. Some of Ander's friends await us, including cape O Leton,
a journalist, and a fantastic chef. He's prepared a dish traditional and nearby son Sebastian Hake, white asparagus, hard boiled eggs, and clams in a white wine sauce. He also sizzles up some rearby stakes and we have some red wine. At culinary clubs, you can find a CEO of a company and an assembly line worker at the same table. All members pay the same fee and have equal access to a professional kitchen and spacious dining room. That's a
major perk in this food obsessed region. Around here, people tend to live in apartments where kitchens aren't particularly big. Also, there aren't a lot of restaurants in many of the small towns. Many of the culinary club members and the workers at Mondragon were born and raised nearby. This culture have shared ownership is in their blood. That culture, though,
can sometimes feel exclusionary to outsiders. But what would I like most of all, I'd like to see more people who are representative of the whole society and the cooperatives. That's Diego Montoya he's originally from Columbia. Diego says he would like to see more Colombians, Ecuadorians, Senegalese and others who weren't born in the area but who were part of Basque society joined the cooperatives. About twenty years ago, Diego left his native Columbia guerrilla groups such as the FARC.
We're fighting the government. When Diego and his sister arrived in the Basque region, they had to sleep on the streets. Eventually, Diego found work as a waiter than in construction, but he wanted a job at of the cooperatives, so he decided to get his engineering degree. After a decade in Mondragone, when he was nearly forty, he finally became a member. I've reached a place of fability, which gives me peace of mind. And also I'm not worried that at my
age they're gonna fire me. They're not gonna fire me. Diego wants more people like himself to be able to experience the benefits of Mondragon's cooperatives. He says that one hurdle is that some of the co ops strongly encouraged members to speak the Basque language well. He appreciates that the language is an important part of Basque identity. He doesn't want it to be a barrier to entry. Diego's wife, Maria Protegi, has co ops in her blood. She grew up in the town of Mondragon and her father was
an important figure in the early cooperative movement. I'm speaking to both of them at a small weekend home that Maria's family owns. It's a short drive from Mondragon. We're sitting outside and have a great view of the Basque mountains in the distance, miles and miles of green. They would get together, all of them to help one of the farms, you know. Like also, land means neighborhood work. Maria's head of customer service at Orbea, am undergone co
op that makes bicycles. It's a well known brand in Spain and among cyclists globally. When the pandemic struck many of Orbea's clients, bicycle shops around the world shut down. Maria says Orbea decided to act to avoid pushing its clients into bankruptcy. When restrictions started to lift, demand for bicycles surged, Orbea has had a great couple of years. I asked Maria if she and her colleagues voted to boost their salaries as a result. No, we are quite
conservative and we are very aware of the cycles. ORBEA was founded in eighteen forty, so I guess they passed a lot of bad things out of good things. And so whenever it's going very well, we always get like, okay, just in case, we get these my any justin cage, you know, well the justin caage boxes full because we know that, you know, but things come, Maria says. The stability of the cooperative is the stability of hundreds of people's livelihoods who are playing with many people's money. That's
something that it makes you think twice. In general, Europe was a relatively stable place for many workers. During the pandemic, Spain and other countries rolled out national furlow programs. They subsidized the salaries of tens of millions of employees who couldn't work. The difference is that the scale of these programs was new. There were major growing pains. Some workers didn't get their furlow payments for months. For example, at Mondragon,
there were no growing pains during the pandemic. Their crisis playbook is tried and tested back in Balta's kitchen, he tells me I was co op has been doing. In May of this year, Balton, the members of his cooperative gathered for their annual meeting. Demand for washing machines has been picking up. FuG Or reported a profit workers increase their salaries by about five and they voted to distribute some of those profits to members. Each member got the
equivalent of thousands of dollars deposited in a savings fund. Yes, here, my experience has been very positive. The worst that could happen to me happened. I lost my job when I was forty eight, fifty years old. Now I'm fifty nine years old and I'm still working, and I've held on to everything I've fought for. I've held onto it. Not everywhere can be like Mandergone, but it's become a kind of north star for places like co ops Sency. That's what Kristen Barker, one of the other founders of the
co Op Network, told me. On issues like inequality, I think there's just a tendency to throw up our hands and feel like we can't really do anything on here. But you look at Mandragon, a living, breathing, proven model of extraordinary progress. This is possible, and this is what we want to be about. Creating the pandemic has led to unimaginable devastation and trauma, but it has also shown
that there are proven models that create greater equality. Whether it's the co ops of Mondragone, or giving people cash like in the US, or the power of community based programs like in Kenya. There are things that work. It's now up to us to decide if we'll learn any of those lessons. This is our last episode of this season of The Paycheck. Last week's episode said that Singapore has no manufacturing sector. We have corrected the error, as the category now accounts for of its GDP. Thank you
so much for listening. If you like our show, please head on over to Apple Podcasts or wherever you listen to podcasts to rate and review. This episode was hosted by Me Rebecca Greenfield and reported by Jeanette Newman and Me. It was edited by Daniel Balby and Me with help from Francesca Levy, Janet Paskin, and rock Sheeta Soluja. We also had editing help from Shelly Banjo, Kristin b Brown, Gilda to Carly, Nicole Flato, Elissa McDonald, and Kay Schultz.
This episode was produced by Gilda to Carly and sound engineered by Matt Kin. Original music is by Leo Sidrin. The voice actors you heard were Alex Mario and Juan Carlos Ernandez. Special thanks to Magnus Henrickson, Mckinninda Kuiper, Margaret Sutherland, and Stacy Wong. Francesca Levy is Bloomberg's head of podcasts. What do