
Can worker cooperatives alleviate income inequality? - spiralpolitik
http://america.aljazeera.com/articles/2015/1/13/worker-run-cooperatives.html
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jandrewrogers
One of the assertions made in the article is obviously wildly incorrect: the
ratio between the highest paid and lowest paid workers in traditional
corporations is not remotely 600-to-1. In the US, that would mean the top paid
people in "traditional corporations" are earning _at least_ $9M/year.

Given that the average corporate CEO in the US makes a bit under $200k/year
(per the US Federal government), it would require a definition of "traditional
corporation" that has been stretched to the point of misleading. Even for
multi-billion dollar publicly traded companies, the CEO base pay is frequently
<$1M (this is largely public record). With very rare exception, no amount of
bonuses or vested stock options will close the gap between that and a
_minimum_ of $9M/year at most large corporations.

Some people at companies may be overcompensated but let's be honest about what
typical figures actually look like.

~~~
seattlegal
Average CEO compensation came in at $15.2 million in 2013 for Fortune 500
companies.

~~~
TulliusCicero
It may surprise you to learn that there are many more corporations than the
ones in the Fortune 500.

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TaylorAlexander
I've been dreaming lately of starting up a worker coop in silicon valley that
focuses on consumer robotics. Is anyone interested in something like that? I'm
an extremely capable hardware guy with a broad skill set and extensive
robotics and manufacturing experience. I'm running my own little start up now
that could help fund initial operations, and could use some people who excel
at software, mechanical design, or general operations.

I am really troubled by the way traditional companies exploit workers, and see
that as a major problem of our age. If you could show the world that a worker
coop could succeed doing something highly technical like robotics, it would
serve as proof that the cooperative model can work for more than just chicken
farms. I'd be focused on growth like a silicon valley startup to some extent,
but quality of life for everyone in the organization would be a big deal.

I'm also kind of curious about B-corporations, which allow a specific public
benefit to share standing with profit as a legal goal. This would be more
silicon-valley friendly as far as funding, since worker coops don't have the
same revenue generating opportunities for investors. Though the coop could
agree to some kind of internal "revenue tax" to pay back investors or save
money.

I'd love to see some wealthy people just give their money away to talented
organizations that want to spread public good. What I'd love most would be to
just work on open source robotics that help the world. I've been developing a
system for 3D printed robotics that use as few non-printed parts as possible,
making it easier to collaborate online with hardware designs. I don't
typically even use screws, since sourcing them can be expensive and slow -
most parts just snap together or interlock.

An alternative plan though is for me to get rich the traditional way and then
use my own money for good, so I am going to be checking out the new YC RFS for
hardware whenever that comes out. I have some good ideas about improving life
in the kitchen that might be workable. :)

~~~
yochaigal
You should reach out to NoBAWC ([http://nobawc.org](http://nobawc.org)) and
[http://techworker.coop](http://techworker.coop) (and the list serv).

My worker co-op started out in the Bay Area and now is bi-coastal; SV is full
of like-minded folks so you're among good company.

PS, check out
[http://www.reddit.com/r/cooperatives](http://www.reddit.com/r/cooperatives).

~~~
TaylorAlexander
Awesome, thanks! I have been following that subreddit but the other links are
new to me.

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falcolas
To make this more relevant to our industry:

[http://techworker.coop/sites/default/files/TechCoopHOWTO.pdf](http://techworker.coop/sites/default/files/TechCoopHOWTO.pdf)

I wish this was easier to set up where I live; too many big companies holding
all of the area's mindshare (for instance, our city is less than 50,000 in
population, and we have two sizable startups, one incumbant and Oracle
commanding the tech staff in the area). I can't imagine any of these companies
tolerating hiring out work to a tech co-op.

~~~
dublinben
>I can't imagine any of these companies tolerating hiring out work to a tech
co-op.

Why should the internal structure of a subcontractor matter to the client?

~~~
falcolas
Because they would rather hire employees than contractors. Oracle in
particular has several miles of red tape just to authorize the use of a
particular contractor...

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throoooooowaway
"The various forms of cooperation are incontestably one of the most equitable
and rational ways of organizing the future system of production. But before it
can realize its aim of emancipating the laboring masses so that they will
receive the full product of their labor, the land and all forms of capital
must be converted into collective property. As long as this is not
accomplished, the cooperatives will be overwhelmed by the all-powerful
competition of monopoly capital and vast landed property; ... and even in the
unlikely event that a small group of cooperatives should somehow surmount the
competition, their success would only beget a new class of prosperous
cooperators in the midst of a poverty-stricken mass of proletarians. While
cooperatives cannot achieve the emancipation of the laboring masses under the
present socioeconomic conditions, it nevertheless has this advantage, that
cooperation can habituate the workers to organize themselves to conduct their
own affairs..."

~ Bakunin

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lincolnq
So... I've been interested in this model for startups. But it doesn't make
sense, right? Because startups already give equity to employees as part of
their compensation package. But nobody would call Google a "worker coop" \--
but I haven't figured out exactly why not. What's the deal?

~~~
TaylorAlexander
I think a worker coop is always explicitly owned equally by all workers, which
isn't what Google does.

The model makes it hard to get investment, since there are no "super owners"
like investors typically are. The coop could pay the investment back like a
high interest loan with flexible terms, but I haven't seen exactly how that
would work. I'm interested in that though - see my other comment here.

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jerf
This basically sounds like the lean-startup equivalent in the non-tech space.
I suspect it's more possible than before because it's easier for the coops to
outsource the legal bits than it used to be. It is ironic and perhaps even
naive to pitch this as a reaction against capitalism when it is the
efficiencies of capitalism making it possible in the first place.

And if these people really think this is a reaction against "capitalism", in
its capacity as all-powerful bogeyman rather than description of how economic
transactions work...

"but to Henry Lezama, the goal is to keep growing, to bring more people into
the cooperative."

... they're in for a shock because as they bring in more people, in the limit
this just becomes another form of business, and as more regulations kick in
based on their size they won't be able to help becoming a "business", to say
nothing of how "flat management" becomes practically impossible pretty quickly
and hierarchy _will_ set in. (It's a human thing, not an ideological thing or
a government thing or a "capitalism" thing. We instinctively, and I mean that
fully literal, structure ourselves into social hierarchies.)

It's fantastic that people are starting to realize this and move the gains of
this sort of business structure down the economic ladder. It's a powerful and
flexible structure for both the members and society itself.

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mc32
I'm not sure a cooperative is going to alleviate income inequality. When you
form the cooperative, I imagine the first member and subsequent members would
filter for ability, qualifications, productivity, etc. So the same "average"
and bellow average worker would be left out. How are the passed over want-to-
be workers going get in on the cooperative and thus enjoy an income and
presumably above average income?

Are the cooperatives going to take on slackers or averagely skilled people
wanting to join? How would that cooperative compete against more 'competitive'
cooperatives?

~~~
sanderjd
Your comment seems to presuppose that income inequality is largely the result
of differences in skill and/or work levels, which is a common viewpoint that
is not necessarily correct. The alternate viewpoint is that there are a lot of
hard-working people with highly valuable skills who are underpaid due to the
way corporations are usually structured. In a typical corporate structure, the
people closest to the money are the best paid, which doesn't necessarily imply
that they are the hardest working or mostly highly skilled.

~~~
mc32
You're right. But my question is about income from those at the margins who
are laid off fired etc. Due to stack ranking, etc. How is that addressed? It's
important to get those people in the economy as much as its important to
attenuate cxo salaries...

~~~
TaylorAlexander
I imagine a compartmentalized market of coops where highly successful coops
have only a few employees with a large salary, and then they buy goods and
services from other coops that may make less money and therefore cost less. So
a robotics design coop may make $500k per employee but only have 5 employees.
When they ship products they could ship via a shipping coop that only pays
$60k per worker.

This allows some room for exploitation but it would probably better adjust for
real market value of workers than what we have now.

~~~
mc32
Doesn't this result is similar income disparity that this idea is trying to
avoid? So instead of expressing itself between intra corp hierarchy it's
expressed extra-corp hierarchy... So basically its exported but still
exists...

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bcheung
Co-ops seem like they are better suited for a side-hobby rather than your main
source of income.

Part of the reason for less income inequality is that the types of people who
join them aren't primarily concerned with their monetary compensation. They
are more concerned about a cause or outcome than earning money.

It's selection bias.

The majority of people want to get paid the most they can. It seems like a co-
op tends to pay the in demand and highly skilled people less, and the less
skilled people more.

I think it would be hard to attract and retain high-end talent if they can
earn more in the standard workplace.

~~~
mercer
It's a bit of a chicken and egg situation. I suspect variations on the co-op
model, more 'holistically' extended to include more parts of life perhaps,
might be preferable to many people over the current approach, whatever it's
called. But without experiencing it, and with the mindset that more money =
more happiness, most people wouldn't give it a shot. And I understand that.

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zwieback
Definitely works in retail and not just for low-volume specialty markets. I
shop at WinCo, which is a great supermarket and successful coop:

[http://www.forbes.com/sites/maryjosephs/2014/11/05/millionai...](http://www.forbes.com/sites/maryjosephs/2014/11/05/millionaire-
grocery-clerks-the-amazing-winco-foods-story/)

Also Bi-Mart, fantastic coop chain.

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whiddershins
I've always wondered why cooperatives assume consensus decision making.
Couldn't I be an equal owner of something, but decide to leave the leadership
to someone else, at least for a specified time? I feel like the
consensus/debate thing often brings down egalitarian organizations. But
ownership does not HAVE to equal control.

~~~
nhaehnle
You're absolutely right, and I think this is more an assumption _about_
cooperatives rather than how cooperatives actually work. For example,
Mondragon is a federation of coops some of which have hundreds of employees;
they're not going to have a debate with everybody about everything.

Another way to think about it is that cooperatives are the ultimate expression
of a democratic workplace. Yet it's not as if every law were discussed by
everybody in a democracy.

In a way, that shows that we have a lot to learn about how cooperatives can
work. The quote of the union representative is very relevant: Cooperatives
aren't magic dust, even though I personally believe that they are one of the
key tools for dealing with the problems of capitalism. As a society, we simply
have too little understanding of how cooperatives work, and until enough
experiences is collected and networks exist to advise founders of
cooperatives, and all those other little things that help traditional business
founders are extended to cooperatives, it's going to be difficult.

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njharman
Owning means of production is so "few revolutions ago". Extreme income
inequality is due to capital ownership.

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Kalium
Short answer: sometimes, provided they can function and compete effectively as
businesses.

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dropit_sphere
Relevant: "Beyond Capitalism: Leland Stanford’s Forgotten Vision"
[http://dynamics.org/~altenber/PAPERS/BCLSFV/](http://dynamics.org/~altenber/PAPERS/BCLSFV/)

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dreamdu5t
Enough with the ignorant pop-econ articles laced with subtle political
pandering.

~~~
Estragon

      > Enough with the ignorant pop-econ articles laced with 
      > subtle political pandering.
    

Can you please point out the ignorant pandering parts? Are you just referring
to the "income inequality" headline? Because the article seems pretty good to
me. Lots of well-informed, well sourced information about co-ops.

