A new documentary on cooperative enterprise shows how cooperative enterprise could be a model for economic revival and resilience.
By Francesca Rheannon
It’s a word that is bubbling to the surface these days as traumatized New Yorkers pick through the tattered remains of their homes and businesses in the aftermath of Hurricane Sandy. As I write, a new storm is howling outside my window on the East End of Long Island, threatening the fragile recovery that has just begun.
Financial storm clouds are brewing, as well. Stocks tumbled this week, as jitters over the Euro crisis, the “fiscal cliff” and other issues took the wind – at least temporarily – out of the sails of recent buoyancy on Wall Street. So, the idea of building systems, whether economic or physical, that can weather the superstorms increasingly headed our way is one whose time has come.
A new film about the cooperative enterprise movement, Shift Change, comes at an opportune moment to give viewers an in-depth portrayal of resilience in action. Filmmakers Melissa Young and Mark Dworkin tell the stories of “employee-owned businesses that compete successfully in today’s economy while providing secure, dignified jobs in democratic workplaces.”
Mondragon Cooperatives Weather Spain’s Economic Storm
They begin the story in Mondragon, Spain, home to the oldest and largest network of cooperatives in the world. Born out of the terrible privation in the aftermath of the Spanish Civil War, the Mondragon cooperatives have built an economic system that employs more than 83,000 people (including 60 percent of workers in the Mondragon region) in 120 worker-owned and operated companies handling more than 32 billion euros in assets.
And Mondragon is weathering the implosion of the Spanish economy. Its cooperative network has allowed it to respond nimbly to the downturn. As a result, the region has the lowest unemployment rate in Spain – half the national rate.
Sharing The Sacrifice So All May Work
Unlike most capitalist enterprises, making a profit is not the goal of Mondragon, but a means to an end: create jobs.
“People are the most important thing,” says one representative of the cooperative interviewed in the film. From this one simple goal, flows a multitude of other benefits.
Because all the workers are owners, they are invested in the success of the company. And when the company is threatened, they are able to make the tough decisions that can save it and jobs.
The oldest (and largest) Mondragon industrial enterprise is Fagor Appliances, which manufactures home appliances like washing machines. When it got hammered by the collapse of the housing market, Fagor’s workers voted a 20 percent pay cut for themselves so that more jobs could be preserved.
But more was needed.
Because Fagor is part of a network, the cooperative was also able to send workers to other enterprises that were doing well or offer them early retirement. Another cooperative enterprise, the “Social Cooperative,” made sure that workers needs were met during the transition.
WAGES: Building Pride And Enterprise
One of the most moving stories Shift Change tells is that of a young Latina immigrant who was given a step up into economic stability and dignity by becoming a worker-owner in a green housecleaning cooperative, Emma’s Eco-Clean. Her coop was started by the Oakland nonprofit, Women's Action to Gain Economic Security (WAGES), which seeds and develops eco-cleaning cooperatives like hers.
She came to the U.S. as a single mother with a young son. Unable to speak English and unfamiliar with the culture, she felt completely isolated and adrift. But with the training and education provided by WAGES, steady work, and, most importantly, the empowerment that came with working with other women like herself to build their common business, she has taken charge of her life. She makes between 150 and 200 percent of the typical area wage for housecleaners.
“Being in a cooperative won’t make us rich, but it does make our lives better,” she says in the film. “We’re not working for a boss. We have our own business.”
Cooperative Enterprise is Competitive
The traditional argument for hierarchy is that it is more “efficient” and relies on the supposed superior wisdom of the boss. But the economic landscape is littered with the wreckage of companies headed by stratospherically paid CEOs whose indifference to the welfare of their employees, let alone their customers, drove their companies to ruin.
The stake that worker-owners have in their enterprises enlivens innovation and problem-solving. Nothing can beat the power of a group of people who are committed to a common goal for coming up with solutions.
And while horizontal decision-making, where everyone has a voice and voting is by consensus, takes more time investment up front, once the decision is made, everyone is on board. That’s what a young worker at another cooperative featured in Shift Change says. He’s a worker-owner in the Arizmendi Bakeries cooperative in San Francisco. Named after the Spanish priest who created the Mondragon cooperatives in 1941, the bakeries are run by committees, each of which is responsible for different aspects of the enterprise.
Being a worker-owner isn’t for everyone, he acknowledges. It takes work and a willingness to compromise. That’s something that is increasingly rare in our culture of me-firstism and polarization. Even the Mondragon Cooperatives have found they need to educate younger workers in the culture of cooperation – something Father Arizmendi himself carefully nurtured in the young people who became the cofounders of the first industrial cooperatives.
But if Hurricane Sandy – like any disaster -- shows us anything, it is that working together for the common good is the only way we are going to survive.
Shift Change shows us how it can be done.