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WORKER OWNERSHIP

Worker Co-ops

Worker Co-ops

Co-ops are more productive, robust, resistant to price shocks, and increase worker pay and engagement (as opposed to a firm organized by a traditional employer-employee framework). Check out this resource too for more information.

• Doucouliagos 95
  • Meta-analysis of 43 studies comparing various forms of worker participation in business
  • Found that “profit sharing, worker ownership, and worker participation in decision making are all positively associated with productivity”
    • These observed correlations are stronger in worker-managed firms than in traditional capitalist firms
  • Bit outdated as it’s from 1995 and only shows correlation, but still useful
• O’Boyle et al. 16
  • Meta-analysis of 102 samples representing 56,984 firms
  • Finds that employee ownership of businesses has a statistically significant but small impact on business performance
  • “We do find that the effect of employee ownership on performance has increased in studies over time and that studies with samples from outside the USA report stronger effects than those within.”
• Pérotin 12
  • The study found increased productivity in the case of:
    • Increased profit sharing (note: this may also involve reverse causality, although data on ESOPs seems to thoroughly verify this anyway)
    • A higher proportion of employees becoming cooperative member, thus increasing participation in decision-making (in France and Italy)
    • A greater proportion of workers on the board (in the UK)
• Williams 07
  • After 1 year, 50-60% of corporations fail while only 10% of cooperatives do
  • After 5 years, 90% of Co-Ops remain open while only 3-5% of standard corporations do
• Co-op Law
  • Co-ops have been shown multilaterally to be more resilient and less likely to fail than traditionally-operated businesses
  • Coops also face unique barriers to entry which might be mitigated through the transformation of existing enterprises into worker’s coops.
• Burdín & Dean 09
  • Economic analysis of capitalist firms vs worker cooperatives in Uruguay from 1996-2005
  • Coops have a greater correspondence between profit increase and wage increase
  • Employment in coops is more resistant to price shocks
  • Employment has a negative correlation with wages for capitalist firms and a positive correlation with wages in worker coops
• Abell 14
  • Coops make $652 billion in revenue, hold around $3 trillion in assets, and employ nearly one million people in the U.S., showing that coops are already successfully contributing to the U.S. economy
  • Data shows that worker coops:
    • can increase worker incomes by 70-80%
    • have 9-19% greater levels of productivity
    • have 45% lower turnover rates
    • are 30% less likely to fail in the first few years of operation
• Sabatini et al. 12
  • Study based on a 2011 questionnaire in Trento, Italy (where coops make up a substantial portion of businesses)
  • Found that employment in cooperative enterprises increases trust between workers relative to public and private enterprises
    • 47.5% increase relative to public enterprises
    • 36.9% increase relative to private enterprises
• Park 18
  • In conventional firms, there is a negative relationship between job demands and worker commitment
  • This negative relationship was not found in worker co-ops
• Erdal 12
  • Study of three Italian towns of similar demographics, income, and geography
  • The town with the most worker cooperatives experienced the following:
    • Better mental and physical health, as well as longer lives
    • Children were less likely to skip school and skipped school less
    • Less crime, including less domestic violence and greater feelings of safety.
    • Higher rates of ‘social participation’ (joining clubs and charities, giving blood, voting)
    • Perception of a more positive society, more supportive personal networks, and more trust in the government
  • Note: this study fails to prove causation, and only establishes a correlation between coop prevalence and community wellbeing
• https://core.ac.uk/download/pdf/6294741.pdf

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ESOP and Employee Ownership

ESOP and Employee Ownership

Increased employee engagement in decision-making at all levels is consistently associated with better performance.

• NCEO (National Center for Employee Ownership) 17
  • Analyzing the effects of employee ownership (typically ESOPs, where workers gain a stake in their company and its stock)
  • Data shows:
    • 33% higher income from wages (This holds true at all wage levels)
    • 53% longer median job tenure (5.2 years compared to 3.4 years)
  • Employee owners also have access to an array of benefits at work including:
    • flexible work schedules
    • retirement plans
    • parental leave
    • tuition reimbursement
    • Childcare benefits (23% of employee-owners compared to 5% of non-employee-owners)
• NCEO Economic Growth Report
  • More data on employee-owner firms
  • Compared to traditional firms, ESOP and companies with employee ownership:
    • Generate 2.5% more new jobs per year
    • Have a workforce that is ⅓ to ¼ as likely to be laid off
• Kruse 02
  • Analysis of a variety of studies on employee ownership
  • Productivity improves by an extra 4-5% on average in the year an ESOP (employee stock ownership) is adopted, and the higher productivity level is maintained in subsequent years.
    • This one-time jump is more than twice the average annual productivity growth of the U.S. economy over the past 20 years.
  • Most studies find higher organizational commitment and identification under employee ownership, while studies are mixed between favorable and neutral findings on job satisfaction, motivation, and other behavioral measures.
• Kruse & Blasi 95
  • META-ANALYSIS of 52 studies regarding employee ownership, focusing primarily on employee attitudes/behaviours and productivity/profitability
  • Finds higher levels of employee commitment in ESOPS but mixed results in regards to stuff like satisfaction and motivation
  • While it’s hard to make out a clear causal relation between employee ownership and more productivity, the two factors are certainly associated with each other

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Additional Resources

Additional Resources

• ISR: International Socialist Review
  • Coops are effective, but cannot in themselves facilitate a transition to socialism
  • Mondragon Cooperative Corporation, the world’s largest coop, has restructured to move its practices more in line with those of a traditional privately-owned corporation of a similar size.
• Co-operatives UK (video)
  • Cute lil explanation of cooperatives
• IWDC
  • Different types of coops - ‘Worker Coop’ is our interest
• OBOS
  • Massive Norwegian cooperative building association - 435,000 members
• Richard D. Wolff
  • Excellent Richard Wolff write-up on worker coops.
• Truthout: Wolff 14
  • Another Richard Wolff article, discussing social, political and economic barriers to forming workers’ coops.
• The Nation: Chen 19
  • Cute think piece on the value of worker coops
• RMEOC
  • Unorganized ESOP Factsheet

• A massive library on literature regarding worker coops

• Fat google doc containing a LOT of info on worker coops

• https://www.reddit.com/r/VaushV/comments/lxk9b1/destiny_and_shitty_arguments_for_his_ideas_high/

• Cooperative document sheet (unorganized and weirdly formatted)

• ownership structures, evidence for socialism - compilation of studies in favor of worker coops

• https://www.co-oplaw.org/special-topics/worker-cooperatives-performance-and-success-factors/#:~:text=15-,Why%20Worker%20Cooperatives%20Are%20So%20Scarce,creation%2C%20not%20to%20their%20survival talks about barriers to worker coop penetration into the market, mostly summing up these barriers not to coop non-competitiveness but difficulty getting them started