Worker Coops in the USA

The Democracy at Work Institute in Oakland California conducts an annual census of all the worker cooperatives in the United States, and they have just released their analysis of their data from 2015. This is a relatively new research project. They have previously published data for 2013 and 2014, so this most recent report represents the first time that they can compare data from several years and discuss emerging trends. I highly recommend reading the whole report; it is fascinating, but here are some of the key findings:

  • The worker-cooperative sector in the US is still very small, but growing. The authors identify 323 cooperatives in the US in 2015, employing about 6,000 workers and generating about $395 million in annual revenue. This represents an 8.1% increase in the number of worker coops from 2013.
  • From the perspective of this blog, it is interesting to note that most of these businesses (70.9%) were founded as worker-cooperatives rather than becoming cooperatives through conversion from capitalist businesses.
  • The vast majority maintained a 2-1 top-to-bottom pay ratio or less. This compares to an average 303-1 pay ratio in US corporations.
  • Over two thirds of the workers were women.
  • Almost 60% of the workers were people of color.
  • On average, worker-owners represented only 60.2% of the total work-force in the cooperatives surveyed. This is a critical statistic because the percentage of worker-owners to non-owner employees in a cooperative is a key measure of the cooperative’s health as a democratic organization. The lower this number goes, the more a cooperative is degenerating toward becoming a capitalist business.
  • Only 33% reported holding indivisible capital reserves. This is an important statistic because holding significant capital reserves (often generated as a result of mandatory profit plow-back rules) is one factor that substantially strengthens worker cooperatives in other parts of the world.

As in all research, these data have limitations. Of the 323 worker cooperatives identified, only 106 (33%) filled out the researchers’ detailed survey. This is a respectable return rate in the social sciences, but still, it limited the researchers in their analysis. The authors of the report urged us to be particularly wary of the measurement listed above of the average percentage of worker-owners to non-owner employees, as the data-set included some democratic workplaces that were non-profits, and therefore, where worker-ownership would not legally be an option.

Hopefully, as they continue to conduct this survey each year, their response-rate will improve, providing them with more data that will allow them to perform more detailed analysis. In particular, the average ratio of worker-owners to non-owner employees in US cooperatives is arguably the most important measure of the health of the cooperative sector, so it would be great if they had the data to improve this particular measurement in the future.

Timothy C. Palmer 2017 Worker Cooperatives in the U.S. : 2015 State of the Sector. Oakland, CA: Democracy at Work Institute.

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