What is a worker cooperative?
A worker cooperative is a type of business owned and run by all of it’s workers on an equal basis.
What is meant by “equal basis”?
All workers involved in the cooperative would receive equal remuneration for their labour. They would also get an equal say in the running of the business (one vote per person).
What’s the point?
There are many reasons for setting up a worker cooperative, here are some of them:
- Increased job security.
- Greater job satisfaction.
- Often workers don’t work hard because their efforts will only make the director of the company wealthy.
- See ‘Aims’ for more details.
Ideally the worker cooperative business would be set up by the workers who want to be part of the project equally (each member raising an equal amount of capital).
There may be members or potential members who want to be involved but are unable to raise the same amount or capital or any capital.
This is an issue that must be made clear from the outset as in the future the cooperative will very likely need to increase it’s members in the future.
There could be a danger of those members capital being taken by the members who don’t raise capital as every member gets an equal vote irrespective of who raises capital and how much the raised. This can be negated by a solid constitution which can only be changed by a unanimous vote. See ‘Constitution’ for more details.
The aims of the worker cooperative should be as follows:
- To create as many sustainable jobs as possible with a real liveable wage.
- Place the quality of the product/service at the centre of the business (not profit).
- Minimise the environmental impact of the business as much as possible.
- Support the local community as much as possible.
- Each member is entitled to equal remuneration pro rata
- New members can join the cooperative if agreed by a two-thirds majority
- Dismissal of existing members can be done is agreed by a two-thirds majority
Decision making and responsibilities
- Any idea/decision put forward can only be enacted provided it doesn’t breach the cooperatives constitutional aims and it has a two-thirds majority.
- Any member can put forward any motion
- Each member has one vote in any decision
- Responsibilities and roles within the cooperative will be agreed by it’s members with the best interests of the cooperative as a whole in mind.
- Remuneration for employees will be agreed by it’s members on an equal basis.
- If the monthly balance is insufficient to pay it’s members the balance will be divided equally between members.
- If the monthly balance is in surplus the excess money will be kept firstly for any months for there is insufficient income for salaries and secondly for upkeep of the business (i.e. maintenance etc.) then thirdly for the expansion of the cooperative.
More employees can mean less salary per person as the pay is divided equally. As specified in the constitution this should now be negated due to the actual salary being constant rather than fluctuating as per the monthly balance.
The incentive to expand the cooperative and increase membership (other than it being constitutional) is that it will create greater stability and greater income. Greater income over time, provided that the financial data shows it is sustainable and it is agreed by it’s members will mean salary increases for all.