Worker Owned Cooperatives

May 20th, 2011

Since the advent of the industrial revolutions there has been a noble experiment both here and abroad of businesses that owned and democratically controlled by their worker/owners. If you know about these types of businesses, you probably think of them as small and local. For the most part that’s true here in the US. However, if we look across the Atlantic we find a very different story.

Since its modest beginnings in 1956 as technical college and a small workshop producing paraffin heaters, the Mondragon Corporation is a worker owned collective of cooperatives that is the seventh largest Spanish company in terms of turnover (almost $2B) and the leading business group in the Basque Country. At the end of 2008 it was providing employment for 92,773 people working in 256 companies in four areas of activity: Finance, Industry, Retail and Knowledge. This model is also prominent in Italy and other countries in Europe. The story in the US has been not so strong.

Today on Business Matters, we will explore the history of the worker owned cooperatives in the US. We will talk with several success stories and a financial collective that provides funding for these type of businesses. Finally, we will talk about a recent remarkable development that links the Mondragon folks and a large US union in a novel experiment.

Originally Broadcast on January 15, 2010
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Melissa Hoover
Executive Director
US Federation of Worker Cooperatives

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The United States Federation of Worker Cooperatives is a national grassroots membership organization of and for worker cooperatives, democratic workplaces, and organizations that support the growth and development of worker cooperatives. Founded in 2004 as the result of several years of organizing on the part of worker cooperatives and regional groups from around the country.

They provide support to their members and educational outreach to the public through conferences and events, resource referrals, and networking and training opportunities. Check out the various sections of their site to connect to resources and see what’s happening in the dynamic and growing world of worker cooperatives!

Erbin Crowell
Outreach Coordinator
Cooperative Fund of New England
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Erbin worked for over ten years with Equal Exchange, a worker-owned co-operative marketing fairly traded coffee, tea and chocolate from small farmer co-ops. He is currently working on a pilot program for Domestic Fair Trade. He has served in a number of elected roles with Equal Exchange, including chair of the board and worker-owner coordinator. Erbin brings to Cooperative Fund of New England a commitment to workplace democracy, community-based economics and sustainable agriculture. He holds a BA in anthropology and the visual arts from Brown University, and is currently working toward a Masters in Management (Co-operatives and Credit Unions) from St. Mary’s University in Nova Scotia, Canada.

The Cooperative Fund of New England is a non-profit organization supporting cooperative development in the Northeast area of the United States. The Fund provides alternative financial services and related technical assistance to cooperative organizations at favorable rates and terms. Its policies generally accord eligibility on the basis of community service, need and merit.

Operating on a small budget, the Fund has been successfully assisting a wide variety of cooperatives, non-profits, worker owned businesses, and community groups since 1975. Funds for program lending are provided by “social investment loans” from individuals, religious groups, cooperatives and other organizations. Social investment loans are furnished on a long-term basis at low to moderate rates of interest. This investment option may be of interest to persons with discretionary financial resources who have strong social concerns about the use of their funds. Support may also be provided through tax-deductible contributions.

Joseph Tuck
CEO/ General Coordinator
Alvarado Street Bakery
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Joseph Tuck is the General Coordinator/C.E.O. of Alvarado Street Bakery. Joseph started work at Alvarado Street Bakery in 1981 as a sanitation worker and over the years gained expertise both in the baking business and in worker cooperatives. Joseph has held his current position for over twenty years. In this period of time Alvarado Street Bakery has been fortunate in realizing significant growth both in its revenues and profits. Joseph has assisted the cooperative’s evolution organizationally in ways that meet the needs of their customers while giving good returns to its worker members. Currently the average hourly worker/member earns $30 dollars an hour that is augmented by a robust benefit and 401k plan. On top of the compensation package worker/members have also had yearly redemption of stock dividends that has averaged around $14,000 per year.

Joseph has provided technical assistance to various bakeries and food processors in the Russian Federation. His experience in managing a worker cooperative in a free market economy did give Joseph a unique perspective in terms of assisting Russian businesses during the first years of Perestroika. Before his employment at Alvarado Street Bakery Joseph lived in the western highlands of Scotland and was employed as a shepherd/ghille.

Alvarado Street Bakery is one of the most successful worker-owned cooperatives in the US. It provides quality baked goods to its customers nationwide. For over 20 years Alvarado Street Bakery has been a leader in producing healthy, organic whole grain breads.

Alvarado started producing whole grain organic baked goods for their local community in 1979. Their roots can be traced back to the “Food for People not for Profit” movement in the San Francisco Bay Area. They were originally part of a non-profit organization called Red Clover Worker’s Brigade. The brigade consisted of the bakery, a retail store (Santa Rosa Community Market), a trucking company, and a wholesale warehouse.

In 1981 five brigade workers decided to form a worker cooperative. They purchased the bakery and formed Semper Virens Bakery Food Cooperative. Semper Virens in Latin means “ever green” and is the botanical name for one of our area’s largest treasures, our ancient redwood forests. They decided to change the business name to Alvarado Street due to a serendipitous placement of a road sign stowed away in the bakery.

Michelle Matos
Co-op Development Trainer
WAGES Cooperative
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Michelle joined the WAGES team in November 2008 as a Co-op Development Trainer, and provides tailored technical assistance and workshops to foster skills for new and existing co-op members. Michelle is a promoter of social justice with over 10 years of experience in organizing, leadership development and facilitation. Together with community-based organizations, Michelle has developed the leadership of immigrant workers and communities of color by conducting issue-based research and facilitating grassroots leadership development, trainings and strategic planning processes for both short-term campaigns and long-term community initiatives. Michelle holds a degree in Cultural Studies from The New School University.In the years that have passed they have continued to grow and reach out to customers that now span the globe. Currently they employ over 100 people and produce and distribute over 30 organic baked goods.

For 15 years, WAGES, Women’s Action to Gain Economic Security, has worked with low-income immigrant Latinas to launch green business cooperatives, a model that enables women to work together to succeed.

As co-op members, women have healthy work, good pay, and a voice and a vote in key decisions – and they distribute business profits equitably. WAGES provides training and technical assistance to incubate the co-ops and a framework for continued learning and business growth through our Co-op Network.

In addition to building successful cooperative businesses locally, WAGES conducts community workshops throughout the San Francisco Bay Area and consults with other groups around the country. They offer an in-depth Co-op Development Toolkit to qualified organizations, and we have provided technical assistance for a number of new co-ops inspired by their model.

Rob Witherell
United Steelworkers

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The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (United Steelworkers or USW) is the largest industrial labor union in North America, with 705,000 members.[1] Headquartered in Pittsburgh, Pennsylvania, the United Steelworkers represents workers in the United States, Canada and the Caribbean. The United Steelworkers represent workers in a diverse range of industries, including primary and fabricated metals, chemicals, glass, rubber, heavy-duty conveyor belting, tires,transportation, utilities, container industries, pharmaceuticals, call centers andhealth care.
The United Steelworkers is currently affiliated with both the American Federation of Labor – Congress of Industrial Organizations (AFL-CIO) and the Canadian Labour Congress (CLC), as well as several international union federations. On July 2, 2008 the United Steelworkers signed an agreement to merge with the United Kingdomand Ireland based union, Unite, to form a new global union entity called Workers Uniting.

Find our about their agreement with the Mondragon Corporation by clicking this link.

For Your Consideration

Find out about the grass roots campaign to move bank deposits from the “big banks” to community banks and credit unions.

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