
Worker-owned businesses: 'We get paid the same regardless of role' - adrianhoward
https://www.theguardian.com/business-to-business/2018/feb/23/worker-owned-businesses-we-get-paid-the-same-regardless-of-role
======
golergka
> We all get paid the same hourly rate regardless of the roles we do.

Good luck retaining any skilled professionals then. One of the most repulsing
stories that I got from Soviet Union from my grandparents was about excellent
engineers being on the same pay scale with manual labour workers. No matter
how much do you put into your skills, the system had standard pay scale that
you couldn't break out from.

I'm happy that these days are gone now, and skills and professionalism can be
valued by the free market by people competing for them; why, despite pure
populism for the lowest common denominator, someone wants to return to
something like this, is completely beyond me.

~~~
balance_factor
> skills and professionalism can be valued by the free market by people
> competing for them; why, despite pure populism for the lowest common
> denominator, someone wants to return to something like this, is completely
> beyond me.

The real determination of where the money goes is by the owners of the
business. If one looks over the Forbes 400 richest list, we can see the heirs
who drain off so much profit each year from the labor of those who work - the
Kochs, the Waltons, the Johnson family. The Rockefellers fell off the list in
the past few years, $2 billion is the individual cutoff and I suppose Forbes
doesn't know of any individual in the family worth more that that. But I can
assure you if they and their three siblings are worth 1.5 billion each, and
their first cousins are all worth 1.5 billion each, they are not out there
breaking the bricks.

It's amusing to hear about meritocracy and the rat race for education, skills
etc. when these heirs are the people controlling the economy, and causing so
many economic and other problems due to its increasing lopsidedness towards
them. What are their skills and professionalism that are valued? The money
they suck off from those who work is the truest lowest common denominator,
rule by parasites. At least Lenin, Stalin and Molotov rose due to their
merits, not their birthrights. Russia went from being a country pushed around
by the Japanese, with an GDP equivalent to 1917 Brazil, to a superpower
sending satellites, men into space, probes to the Moon (the first country to
do so). It also had little crime and little poverty.

I am supposed to get into a tizzy about someone with less skills getting the
same pay as me, when the money is being sent off to the heirs who do no work?
I certainly would prefer that the people actually doing the work alongside me
get the money.

~~~
wyager
> we can see the heirs who drain off so much profit each year from the labor
> of those who work

If successful people couldn’t pass ownership onto their heirs, the value of
ownership itself would drop dramatically. If Bud and Sam Walton knew they
couldn’t pass on their business to their kids, they would either have never
done it in the first place or they would structure the business to close out
well before they died. Neither of these is good.

Most complaints about rational capital allocation, including this one, are
based on a failure to generalize or punch through enough layers of
indirection.

~~~
maksimum
> If Bud and Sam Walton knew they couldn’t pass on their business to their
> kids, they would either have never done it in the first place or they would
> structure the business to close out well before they died

How confident are you in those conclusions? There are plenty of very rich
people who claim that they don't intend to leave much for their heirs.

~~~
nine_k
They still can command what happens to their capitals after their death.

Remove this ability, and incentives change dramatically.

------
lev99
I'd be interested in the economics of founders selling to their employees from
a founder's point of view. It seems like a way to protect a founder's legacy
after they exit.

Where does the money come from? Do the employees get a loan and then the money
from the loan go to the founder? Does the founder provide a loan to the
employees and receive regular payments on the loan? Do the employees have to
have cash? Do all employees own equal shares regardless of role of employment
length? Do employees buy businesses at the market rate?

~~~
jubal00
Employee Stock Options Programs (ESOPs) are the way most conduct this
transaction. It's frequently a way for a founder to sell to employees due to
relationships/promises, to get a higher valuation than the market offers, or,
like with options, to incentivize productivity and retention.

The employees can get a loan with the business as collateral but the founder/s
is going to hold a note as well. Assignments of stock are similar to options -
customizable but more valuable employees get the lion's share.

~~~
steveax
That’s what Bob and Charlee did with Bob’s Red Mill when he decided to retire:

[https://www.bobsredmill.com/bobs-way-meet](https://www.bobsredmill.com/bobs-
way-meet)

------
typeformer
German companies are pretty great at finding the balance between corporate
profitability and worker interests.

~~~
philipkglass
In the post-WW II economic "golden age," roughly up through the early 1970s,
American manufacturing workers and the corporations they worked for were also
both doing well. That fell apart as America went from a net exporter to net
importer. I'm unsure if the importer/exporter transition is a _direct cause_ ,
because a lot of things changed in the 1970s, but that's about the time the
party ended.

I wonder if Germany will do better when/if Germany no longer has a substantial
export surplus. I hope that it can. It's mathematically impossible for every
country to run an export surplus, so "look to Germany" is a useful
prescription only if there are _other_ good ways to imitate Germany.

------
remir
I find worker-owned businesses very interesting. Obviously getting paid the
same regardless of role may be an obstacle to attracting highly skilled
people, but if salaries are competitive and established in function of role
and experience, in a transparent way, that could be great.

~~~
wutbrodo
Yea, i wondered the same thing. I like the idea of a worker owned Co-op in
general, but it's subject to them actually being functional. I don't see how
that could be the case with industries with large productivity/talent gaps,
like software. Most of the co-ops I've come into contact with are smallish
restaurants or grocery stores, which makes sense: most tasks can be handled by
anyone and those that aren't can be judged a lot more effectively.

~~~
icebraining
_I don 't see how that could be the case with industries with large
productivity/talent gaps, like software._

And yet: [https://github.com/hng/tech-
coops#coops](https://github.com/hng/tech-coops#coops)

The gaps problem seems self-correcting; anyone who thinks they are underpaid
will leave, and conversely the team will probably push out those badly
underperforming. You'll still have gaps, but only among people who don't mind
getting paid the same despite them.

~~~
gremlinsinc
Thanks for that link.. lots of good resources...

I want to start an MSP (Computer Repair / Maintenance as a Service) + Hosting
+ Development Business as a worker co-op someday, when I get the free-time and
money to do so.

------
jacobkg
There is an excellent book called 'Maverick' about a Brazilian manufacturing
company that, while not owned by the workers, gets much closer than almost any
other business. I highly recommend that all founders read it

[https://www.amazon.com/Maverick-Success-Behind-Unusual-
Workp...](https://www.amazon.com/Maverick-Success-Behind-Unusual-
Workplace/dp/0446670553)

~~~
Cyph0n
Very interesting.

The first successful non-hierarchial company that comes to my mind is Valve.

I recall reading that Valve has a higher revenue per employee than any company
in the world...

 _Edit_ : profit, not revenue

~~~
jessriedel
Seems to me the causality works the other way. Industries where companies are
formed from a small number of employee who are individualy quasi-millionaries
(elite SV talent) are more likely to function well without a heirarchy than
industries built on coordinated entry-level manual labor (Walmart).

Also, I don't really get this claim. Valve has ~360 employees with annual
revenue under a billion dollars,

[https://en.wikipedia.org/wiki/Valve_Corporation](https://en.wikipedia.org/wiki/Valve_Corporation)

whereas there are ten companies in the S&P 500 with over $3M in annual revenue
per employee.

[https://priceonomics.com/which-companies-have-the-highest-
re...](https://priceonomics.com/which-companies-have-the-highest-revenue-per/)

Perhaps the comparison is only supposed to be to other tech giants like Apple,
which are roughly $1-2M per employee.

~~~
Cyph0n
> Also, I don't really get this claim. Valve has ~360 employees with annual
> revenue under a billion dollars,

Looks like I was wrong: Newell claims that Valve has the highest _profit_ per
employee.

I'm sure the numbers are not accurate, but that is still a very impressive
figure for revenue/employee.

------
aaronchall
I'll recount a short twitter conversation I had with some engineers who wanted
to be in a collective, I suggested them all being equal partners, and was
promptly blocked...

> My company laid off 17 engineers including me when we tried to unionize. Now
> I’m having a hard time finding a job. Any leads for junior-to-mid software
> developers in the DC area or remote, send em my way. And please share.
> #LanetixUnion #jobsearch - Sara J. Martinez ‏

> Software developers are generally well treated and compensated. What drove
> you to attempt unionizing? - Me.

> There should be interviews with Lanetix engineers coming out soon which will
> go in depth. For a quick overview, here is what we wrote to management: -
> Björn Westergard ‏

> If you're a collective of software engineers worth bargaining with, you
> should all form your own consultancy firm, and forget about _that_ "client".
> This might be your best, realistic solution. Thank me when you're making 2x,
> in nicer conditions and fewer hours... - Me

> This “solution” doesn’t scale due to the competitive race to the bottom
> dynamics of capitalism. Unions demonstrably do work at scale. Everyone is
> “worth bargaining with” for those who don’t to serve mammon alone. - Björn
> Westergard ‏

> You have limited options as I see it, and you probably need to ask
> yourselves what's more important, getting back to work (but apparently not
> at Lanetix), or grinding an ideological axe? If you're so egalitarian, make
> everyone an equal partner, and start looking for clients. - Me
> ([https://twitter.com/aaronchall/status/970717102465323008](https://twitter.com/aaronchall/status/970717102465323008))

Björn promptly blocked me at that point.

> "It is difficult to get a man to understand something, when his salary
> depends upon his not understanding it!"

In this case, his non-existent union salary, I suppose...

------
notyourday
This has been tried multiple times. All of those attempts failed, regardless
of the scale. It won't be different this time.

~~~
dang
[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

~~~
blorsh
I found the comment to be insightful. I'm trying to find his violation, and I
can't really. There are a few things that are close, maybe, but not really.

"political or ideological battle" and "shallow dismissals" seem most
plausible, but neither really fits. It's not as if the entirety of his comment
was "more dumb leftist shit". There was more substance to his comment.

???

~~~
dang
It's a shallow dismissal. It makes a grandiose claim without support. More
importantly, it doesn't teach us anything. An example or two could have
rectified that.

~~~
notyourday
Do I need to provide an example that water is wet? But ok, just for you:

Largest scale:

USSR North Korea Cuba Recent entry: Venezuela Recent entry: South Africa

Smaller:

[https://www.economist.com/news/business/21589469-collapse-
sp...](https://www.economist.com/news/business/21589469-collapse-spains-fagor-
tests-worlds-largest-group-co-operatives-trouble-workers)

Even smaller:

[https://munchies.vice.com/en_us/article/gvkqnm/marxist-
vegan...](https://munchies.vice.com/en_us/article/gvkqnm/marxist-vegan-
restaurant-in-michigan-closes-for-predictably-marxist-reasons)

~~~
dang
Maybe an example or two wouldn't have rectified it. Would you please read the
site guidelines and abide by them when commenting here?

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

