Sunday, May 12, 2013

Economic Democracy

It's obvious, really: Workers in control of their own workplaces are much less likely to ship their own jobs overseas, underpay employees or pollute their own communities.

More information:

2013-01-10 "The Foundation of a New Democratic Economy Is Worker Self-Directed Enterprises"
by Kevin Zeese and Margaret Flowers from ""
A commitment to democracy logically should extend to the place where adults spend most of their lives. Workers in control of their own workplaces are much less likely to ship their own jobs overseas, underpay employees or pollute their own communities.
Truthout readers can get "Democracy at Work: A Cure for Capitalism" free with a minimum contribution by clicking here [].
This article is based on a radio interview with Richard Wolff on Clearing the FOG (Forces Of Greed). You can listen to the interview here [].
The economic collapse and slow recovery that has led to high unemployment and under-employment, coinciding with an extreme wealth divide in which workers have a shrinking share of the GDP, means people are looking for new approaches. How can we create an economy that works for all Americans?
Through his new project, Democracy at Work, economist Richard Wolff strives to develop a social movement that puts in place a reorganization of the economy built on a foundation of employee control of the workplace. Employees would act together as their own bosses in a fully egalitarian, democratic workplace where workers run the business, share the assets and create a workspace that runs in harmony with not only its workers, but the entire community.
We join him in this effort through our project, It's Our Economy, which seeks to create economic democracy, with worker ownership at its foundation. Economic democracy is consistent with the democratic ideals of the United States. And employee ownership is an all-American approach to problem-solving that has been supported by people on the Right and Left. Workers will relish the democratic structure; businesspeople will appreciate its entrepreneurial spirit. In our next column we will review the history of worker ownership and communalism that dates back to the founding of this country, indeed, pre-dates European settlement of North America.
We are not starting from scratch. There are thousands of successful, majority worker-owned businesses in the United States. The largest majority employee-owned business is Florida-based Publix Super Markets, a $27 billion company that employs 152,000 people. That's more workers than Costco and Whole Foods combined. As we finish the international year of the co-op, worker ownership is growing. One in five adults in the world are members of co-ops; and a majority  of Americans find cooperatives to be less expensive, more trustworthy and to provide better service than traditional businesses.
As political economist Gar Alperovitz reports, "There are 120 million members of cooperatives in the United States; 20 percent of the American electric system is either co-op or municipal, essentially socialized. Land trusts are developing at the local level. At the state level, there are many approaches, like public pension funds, for example. California's is the most well-known, but the state of Alabama is heavily using its pension funds and even investing in some forms of worker-owned companies."
Wolff argues that workplaces need to go beyond majority ownership, to "Worker Self Directed Enterprises" (WSDE). He makes a strong case that workers in control of their own workplaces are much less likely to ship their own jobs overseas, underpay employees or pollute their own communities. As workers' enterprises become fully functioning, they benefit those who participate as workers as well as the customers and communities they serve.
Much of what goes wrong in US-European capitalism is due to how corporations are organized - hierarchical and undemocratic. As Wolff says "people go to work and do what they are told rather than participate." The undemocratic workplace is dominated by a handful of people - owners, stockholders or a board of directors. Those who make the decisions create greater wealth and power for themselves, usually at the expense of their workers; and not surprisingly they get involved in politics to ensure that they continue to keep their power and wealth.
Worker Self Directed Enterprises are a new way of organizing. Workers have the capacity to direct decisions in their workplace. As decision-makers they have to live with the decisions they make, like moving jobs overseas, replacing workers with technology or polluting their environment. Wolff says: "If we are committed to democracy, then the workplace where people spend most of their adult lives should be democratic."
Especially when an economy is not working, it is time to say "this system does not do what we need, we can do better." Throughout history, there has been a gradual move to self-governance. As Wolff notes, "We don't need kings, nor do we need to be governed by a few at the workplace." To accomplish this transition to a decentralized and democratized economy, we need to build a social movement that takes this message to the American people.
A large portion of the population already agrees with us. These ideas are majoritarian, but are not realized because wealth is in the hands of a few and politicians need concentrated wealth to sustain them and remain in office. This wealth also controls the media and limits discussion. Thus, we also need to continue building an independent, citizen's media to broaden discussion and understanding.
Worker Self Directed Enterprises are built on the experience of the worker cooperatives. The phrase WSDE is used to emphasize that workers make the decisions. The largest cooperative in the world is the Mondragon Cooperative - a network of 250 co-op enterprises that makes up the 7th largest corporation in Spain, with 85,000 worker-members who make the decisions. Mondragon defied the economic collapse  in Spain. And now Mondragon is joining with US steelworkers to develop worker-owned steel mills in the US.
There is experience-based evidence that worker directed enterprises can have advantages over traditional corporate models. According to a study by Harvard and Rutgers researchers, companies with substantial employee ownership often outperform those without, because of lower staff turnover, stronger trust relationships at work and greater innovation.
The companies that succeed do so in large part because of the "innovation engine" that is unleashed by worker ownership. Group innovation is free fuel for a business that is created when people's passion is ignited toward innovating together and employees are engaged in creating better products and better ways to deliver them. This strategy seeks to create a competitive advantage in the marketplace.
What are the some of the keys to success? Research shows successful businesses realize that innovation comes from differences in thinking, therefore engaging many workers encourages innovation. Most of the time innovation does not mean new technology, but new solutions to problems, rearrangements and improvements in operation. Allowing experimentation, trying new approaches and sharing the lessons from these efforts means all can learn and innovate further. And success comes from sharing information not only with employees, but also with suppliers and customers. The entire organization is rewarded for its innovation and values of teamwork and sharing. Worker ownership is a practical, not utopian, model of organizing workplaces.
Changing the workplace is not only about more successful business; it is about people living more fulfilled lives. Wolff points out that many workers view work and workplaces negatively because they are not organized to be positive experiences for workers; that "Happy Hour" is something that takes place outside of work. "If more enterprises were employee-owned, fewer workers would face daily exploitation. The ratio of average CEO pay to worker pay (currently, an astounding 380:1) would shrink. Inequality, which harms society and hampers economic growth, would lessen."
Employee Self-Directed Enterprises will also change politics as they put democratic power in the workplace and build wealth among workers. As the balance of power shifts, majoritarian solutions to the challenges the country faces will no longer be taboo. The foundation of political democracy will move from a small number of owners, to worker directors thereby broadening the base of government.

2013-05-09 "Republic Windows Sit-Downers Become Worker-Owners"
by Jane Slaughter from "Labor Notes" []:
Workers say it's a new era as they become owners of their window-making cooperative. In 2008 and again in 2012 they occupied their factory to keep management from removing machinery. Now they own those machines. Photo: New Era Windows Cooperative.

They inspired the country when they sat down inside their Chicago factory in December 2008, and now they’ll have the chance to inspire us again—this time as worker-owners [].
The workers who used to build windows at Republic Windows and Doors have bought the equipment from a cut-and-run owner. This afternoon marks the grand opening of their factory, New Era Window Cooperative, now housed in a former Campbell Soup plant for lower rent.
“We’ve defeated the obstacles in front of us before,” said Armando Robles, still president of United Electrical Workers Local 1110 at the plant []. “By doing things like occupying the plant. Now we have a whole another kind of obstacles.”
The union will continue to represent the workforce. UE has, in fact, a co-op division for similar worker-run businesses. UE members have been to Mexico to meet with members of the co-op division of the FAT, the UE’s sister federation there. (For a detailed look at an industrial co-op in action, see our profile of a worker-owned tire plant in El Salto, Mexico: “Can Worker-Owners Make a Big Factory Run?” [])
Production of samples has begun, with just 18 workers—way down from nearly 300 when Republic was at its peak—each of whom invested $1,000 in the business. The rest of the more than $400,000 necessary capital was raised by The Working World [], a nonprofit that helps worker co-ops get off the ground in the U.S. and Argentina. Working World found nontraditional “socially responsible” investors who were willing to wait for the venture to pay off.
Working World founder Brendan Martin is the only co-op member who’s not a former Republic worker, and he is bringing needed expertise on use of the web and sales strategy.
Some workers raised their $1,000 stake from three months’ severance pay they received when Serious Materials, the owner that took over from Republic, closed down [].

No Supervisors -
The plant will run without supervisors per se, Robles said. He expects some sort of in-plant leadership will be chosen by election, and there will be a board of directors. Wages have not been determined.
The plant will produce custom and standard replacement vinyl windows, Robles said, both residential and commercial. The co-op website advertises double-hung and picture styles—both with the tag “1110” as part of their brand name—for the local union [].
Prices will be lower than those charged by Serious. The co-op will be competing against window factories belonging to former owners of Republic, who use only temp labor and pay no benefits.
Robles’s goal is for each worker “to learn every spot.” In the past at Republic, he said, people tended not to share their skills. Now he wants everyone to know all the jobs, even in the office. None of the workers—who include Latinos and African Americans, five women and 13 men—had done office work at Republic or Serious.
The co-op already has five orders and urges Labor Notes readers: “If you live in Chicago, buy a window!”
For more, see a 10-minute Democracy Now! interview with Robles and two other New Era worker-owners [].

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