Two Federal Reserve regional presidents have separately offered a grim prognosis in the wake of last week’s rise in national unemployment to 10.2 percent (over 12 percent in Sacramento). More than six people are chasing every available job. It seems that unemployment is likely to remain high for several years, and is not done rising.
Rather than wait for job creation to become profitable again (which will take a while), we must create our own jobs through development of worker-owned enterprises. One of the beautiful things about such cooperatives is that they can operate in that grey area between breaking-even and lucrative. They might not be attractive to people who just want to make a buck in the stock market (or venture capital or whatever). But when people need jobs – and we do, badly – worker ownership is attractive enough.
An excellent example of this can be found in the wake of Argentina’s financial collapse (2001-2), which prompted thousands of workers to simply take over their workplaces after the owners walked away. Many of these are still operative, even in cases when the owners decided that they want the place after all. The Take is a fascinating movie depicting the struggle to reopen one factory, and its web site provides a good introduction to this very important movement.
Of course, the trick question in all this is where do unemployed workers get the money needed to invest in their own workplace? It is one thing to occupy an abandoned plant during a full economic collapse, but in “normal” times significant investment is necessary.
In the Basque Country, the Mondragon cooperatives created their own fund by pooling resources. Each worker-owner’s retirement fund was available for additional co-op development. Contrast that to here (and elsewhere in Spain), where most investment is tied up in publicly-traded enterprises that sometimes use that money to move production overseas. In some cases, workers are paying to destroy their own jobs.
An investment fund is a big part of the plan announced in last month’s agreement between the United Steelworkers union and Mondragon Internacional. It is also part of the plan for the Evergreen Cooperatives initiative of Cleveland. And it has long been the plan for the Arizmendi Association of cooperative bakeries in California.
This is a good start, but we need a lot more money to create the jobs needed to get unemployment back down to the “natural” rate of five percent. Organizations like union pension funds would be a great source for this needed capital, and they would also benefit their members by investing in cooperative development.
There seems to be a groundswell of interest in cooperative economics coming from several unions. United Food & Commercial Workers is involved with the Detroit Community Grocery Store Coalition. The executive board of the Maine AFL-CIO is now discussing a resolution on worker cooperatives from their recent conference. And of course, there are some other intriguing developments popping up that I’m not at liberty to publish on the internet (but stay tuned for a future interview).
Clearly something is going on with unions, and hopefully it will help stop and reverse their long decline in membership and influence. There is a bit of a paradigm shift from fighting with management to appointing it, but we should remember that the Knights of Labor used cooperatives as a key part of their struggle in the late 19th Century.
Even those unions that aren’t ready to commit to their own (Steelworkers-style) co-op development initiative should at least be looking for ways to support this approach, possibly by investing in each other’s cooperatives.
There might be less profit up front, but isn’t that a worthwhile cost for building an economy that works?
Another thing to consider is that many union workers in Detroit are being bought out of their jobs. Their capital is limited, but by banding together with other workers, starting carefully planned enterprises is very possible.
Because many workers have taken early retirements and other retirees have lost on their investments, many “older workers” will need to reenter the job market. By entering cooperative workplaces they bring unique experiences and insights that promote cross-generational learning.
Labor Notes just posted an excerpt from my previous post on Steelworkers: http://www.labornotes.org/blogs