Benefits of Worker Cooperatives

Worker cooperatives are a way to reorganize our workplaces in a truly democratic fashion, where decision-making power and wealth are shared equally.

In contrast to traditional companies, workers at cooperatives participate in the profits, oversight, and often management of the organization using democratic practices. Workers own the majority of the equity in the business, and control the voting shares.

Worker cooperatives are emerging as a pillar of the U.S. economy, with approximately 13.5 million workers participating in some form of employee ownership program at over 7,000 companies. This model has proven to be an effective tool for:

  • Creating and maintaining sustainable, dignified jobs
  • Generating wealth
  • Improving the quality of life of workers
  • Promoting local economic empowerment

Worker cooperatives make business ownership possible for entrepreneurs of all backgrounds.

One of the primary barriers to business ownership is access to start-up capital. This is especially true for women and people of color. By placing workers’ needs ahead of profits, cooperatives address the root cause of economic disparity and create meaningful change for underserved populations.

Worker cooperatives create quality jobs.

Workers have a meaningful role in the business, as they contribute to and benefit from the success of a company they co-own. Jobs at worker cooperatives tend to be longer-term, offer extensive skills training, and provide better wages than similar jobs in conventional companies. Furthermore, worker cooperatives offer opportunities for greater participation in management and governance decisions that help the business succeed.

Worker cooperatives promote the stability of local neighborhoods.

At a worker cooperative, profits do not go to distant investors, but instead go directly to the workers. As a result, the money stays grounded in the local economy, building community wealth. With ownership in the hands of workers, who are usually living and spending locally, these companies stay connected and accountable to their communities.

Worker cooperatives save good jobs when small business owners retire.

Cooperative ownership transfers are in the interest of local business owners who seek to liquidate their ownership interest or retire. These transfers are also in the interest of the employees, who gain the opportunity to ensure the survival of the company and their jobs, while gaining genuine ownership stake in their business and community.

Want an even deeper dive?

Check out these answers to frequently asked questions about worker cooperatives.

 

Sources:  Democracy at Work and the Democracy at Work Institute