A worker cooperative is a business that is owned and self-managed by its workers.
This could mean a firm where every worker-owner participates in democratic decision-making, or it may refer to a system in which management is elected by every worker-owner, using a one-person one-vote election process. The Democracy at Work Institute defines:
A worker cooperative is often a values-driven business that puts benefitting its workers and their community at the core of its purpose. The two central characteristics of worker cooperatives are:
workers own the business and they participate in its financial success on the basis of their labor contribution to the cooperative
workers have representation on and vote for the board of directors, adhering to the principle of one worker, one vote
In the U.S., worker cooperatives tend to be concentrated in the service and retail sectors, however any business can be worker-owned and -controlled. Common industries for worker-cooperation include:
hospitality and food service
manufacturing and engineering
"Building more worker-cooperatives and enhancing stakeholder rights to share the fruits of successful business may be key to addressing this phenomenon. By placing workers’ needs before investors’ profits, successful worker cooperatives democratize wealth rather than concentrate it."
One of the most compelling aspects of worker cooperatives is their capacity to counteract rising inequality.
We know that the rapidly widening wealth divide we’ve seen growing over the past half century has been bad for average families, for social cohesion, and ultimately the economy itself. Lack of economic and social mobility undermines the promise of our democratic institutions as well as the American Dream.
BUT what can we do?
We can work to anchor our wealth to our own local community.
Building more worker-cooperatives and enhancing stakeholder rights to share the fruits of successful business may be key to addressing this growing hazard. By placing workers’ needs before investors’ profits, successful worker cooperatives democratize wealth rather than concentrate it. This, more than anything else, is what compels the members of the Colorado Solidarity Fund to target cooperatives with our investment dollars. This is why we believe so strongly in cooperatives.
By sharing risk, cooperatives make business ownership possible for entrepreneurs of all backgrounds. They build skills and participation in the workforce. They boost employment retention and productivity. They stabilize their local economy, resulting in more resilience and partnership. Shared ownership can even be a means of preserving small businesses and saving good jobs when owners retire.