Stronger together? Building new worker co-ops with union support

by Laura Hanson Schlachter

The United States is experiencing an explosion of interest in worker cooperatives: firms owned and democratically governed by workers according to the principle of one worker, one vote.  According to a forthcoming report by the Democracy at Work Institute, two-thirds of American worker co-ops formed after 2000 and the sector has grown 8.5 percent since 2013.

Although some of the energy is coming from longtime employee ownership advocates, a surprising number of unions are also wading into the worker co-op development game.

Union interest was catalyzed, in part, by a 2009 agreement to promote union co-ops between the United Steelworkers (USW) and the Mondragon worker cooperatives in Spain.  The agreement marked a turning point in the debate about whether unions and worker co-ops are stronger together.  It also helped inspire a new generation of start-up efforts explicitly emulating the USW-Mondragon model.

Democratic worker ownership can offer employment stability, solidarity, wealth accumulation, and other benefits to workers.  Yet scaling up worker co-ops is no easy task.  Low formation rates, cultural individualism, lack of financing, and unwieldy governance structures are major constraints.

Can directly engaging unions in the worker cooperative formation process help make democratic worker ownership more widely available to workers?

In a recent study, I identify six possibilities and dilemmas of union involvement in worker cooperative development through a case study of the Cincinnati Union Co-op Initiative.  This nonprofit incubator has launched three union co-ops since 2011 and become a hub for efforts to implement the USW-Mondragon model across the country.

I argue that advocates and skeptics alike should consider these takeaways from Cincinnati’s experiences as union co-op momentum continues to grow.

The USW-Mondragon vision

“A worker cooperative directly connected to the labor movement is … the most beautiful version of democracy in the economy that I can imagine,” said Casey Whitten-Amadon, a former Cincinnati Union Co-op Initiative staffer.  Like many advocates of the USW-Mondragon model, Whitten-Amadon traces common roots between unions and worker co-ops back to the Knights of Labor.  The Knights supported the development of hundreds of co-ops in the late 19^th century and promoted a vision of producer and worker control over the means of production.

Some labor activists are now reclaiming this vision in the wake of USW and Mondragon endorsing unionization to scale up the worker cooperative sector in North America.  In 2012, USW, Mondragon, and the Ohio Employee Ownership Center to release a formal union co-op model that combine democratic worker ownership and union membership.  For instance, workers elect union committees to negotiate collective bargaining agreements and communicate with management.

Possibilities and dilemmas of union involvement in worker co-op formation

 The Cincinnati Union Co-op Initiative is the first and most mature USW-Mondragon union co-op incubator in the United States.  It is an opportune case to examine the implications of directly engaging unions in the worker co-op formation process.

My study draws on twenty interviews with union co-op advocates, incubator staff, and workers conducted over sixteen months of qualitative fieldwork in Cincinnati, Ohio.  I triangulated these narratives with organizational documents and media coverage to examine the origins of the Initiative and ties to union partners.

Four labor and community organizers founded the Initiative in 2011 after learning about the USW-Mondragon agreement.  They launched Our Harvest food hub and farm in 2012 with support from the United Food & Commercial Workers (UFCW) Local 75 and Sustainergy energy retrofitting in 2013 (now part of Insulators Local 8).  They plan to open a multi-stakeholder cooperative grocery store called Apple Street Market with UFCW Local 75 in late 2017.

My study puts claims about the USW-Mondragon model in dialogue with aspirations and experiences of people on the ground.  I identify six possibilities and dilemmas of directly engaging unions in worker co-op formation.

Possibility #1: Resources

Union co-op advocates argue that unions can address barriers to scale by bringing resources to bear in the start-up process.  I found that direct union financing has been limited in Cincinnati but in-kind resources such as meeting space significantly reduced incubation costs.  The single largest contribution was from UFWC Local 75, which dedicated organizer staff time to support the launch of Our Harvest.  I also found that unions supported worker-owner training through existing apprenticeship programs and flexed their political muscle to support co-op-friendly legislation.

Possibility #2: Conflict resolution

A second claim is that early unionization can strengthen solidarity and manage conflict between managers and rank-and-file workers by providing formal mechanisms to address unfair treatment.  Consistent with David Ellerman’s prediction that unions can function as the “legitimate opposition” in a worker co-op, I found that unionization was instrumental in resolving a worker grievance at Our Harvest in 2014.  Workers also reported that their union committee helped facilitate democratic debate about workplace issues.

Possibility #3: Solidarity

Advocates also claim that unionization can help worker co-ops break out of silos and connect with the broader workers’ movement.  Solidarity was a recurring theme in my interviews.  As Initiative founder Phil Amadon said, “Our focus becomes not just our workplace, not just our cooperative … but all workers everywhere.”

Dilemma #1: Antagonism

The first dilemma is the potential for collective bargaining to introduce antagonism into a budding democratic workplace.  A focus on extrinsic incentives can put worker and owner interests at odds, particularly in a small cooperative.  I found some evidence of conflict in discussions around voluntary wage cuts at Our Harvest that pointed toward a delicate balance between worker-employee solidarity and financial tradeoffs during the start-up phase.

Dilemma #2: Conflict of interest

The potential for direct union involvement in business development to undermine cooperative autonomy is a second dilemma.  The Initiative encountered this issue and determined that union-appointed managers do have the potential to introduce a conflict of interest.  As founder Ellen Vera said, “[The union] can be extremely involved” in the startup process but should “not be part of actually managing the co-op itself.”

Dilemma #3: Discrimination

Finally, skeptics of the USW-Mondragon model argue that historically white- and male-dominated unions can make marginalized workers feel unwelcome.  I did not find evidence that unionization perpetuates discriminatory practices at Our Harvest, Sustainergy, or Apple Street Market.  In contrast, workers described unionization as a strategy to fight workplace discrimination against workers who are employees but not cooperative owners.

Considerations for future debate

Scholars should continue to investigate these possibilities and dilemmas in future research as USW-Mondragon initiatives continue to mature.

Despite the emancipatory aspirations of worker cooperatives, their marginality in the United States economy requires creative solutions to the ways in which they fall short.  As union co-ops continue to organize, unions and workers should take these considerations into account as they contemplate adapting the model to their own context.

Laura Hanson Schlachter is a PhD Candidate in Sociology at the University of Wisconsin-Madison. This article summarizes findings from “Stronger Together? The USW-Mondragon Union Co-op Model” in Labor Studies Journal. For a free, pre-publication version of the article, click here.

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