Worker Cooperatives Are More Productive Than Normal Companies - Deepstash

Imagine an economy without bosses.

A close analysis of the performance of worker-owned cooperative firms—companies in which workers share in management and ownership—shows that, compared to standard top-down firms, co-ops can be a viable, even superior way of doing business.

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“Virginie Perotin of Leeds University Business School synthesized research on “labor-managed firms” in Western Europe, the United States and Latin America, “

Perotin found improvements in operations, efficiency and holistic social benefits associated with increased worker autonomy, and having a direct stake in managing production.

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Worker-run management reduces friction with boss/worker issues like

  • communication breakdown
  • disputing theory vs practice
  • resisting unfair burdens/rewards
  • monitoring and correcting skills and attitudes.

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“European co-op sector is generally as diverse as any other type of ownership structure, including full-scale factories . Though co-op conversion is often seen as a way to rescue “failing” firms, Perotin’s research reveals that in France from 1997 to 2001 more than eight in 10 worker co-ops starting up during this period were established “from scratch,” not derived from ownership transfers in failing companies (compared to new business formations overall, co-ops had a larger portion of brand-new startups)”.

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Co-ops offer sustainable long-term employment because worker-owners protect their own livelihoods. This is seen in periods of economic distress, co-ops generally preserve jobs while planning to maintain current assets—vs. many corporations shed jobs to tighten budgets.

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Not all worker-owned models prioritize further generations. Some co-ops though balance both democratic enterprise and public trust principles- and in some states are mandated by law to protect the co-op model by keeping a long term reserves, and that when owners leave, indivisible assets are recycled back into future co-op organization.

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“In an increasingly precarious economy, advocates push worker ownership as a pathway to restore equity and control to labor. Co-ops can boost career mobility and seed homegrown job opportunities, while communities benefit from an ownership structure that keeps capital reinvested locally, not exploited or outsourced to faceless corporate chains.”

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Hoover projects that an oncoming wave of retiring Baby Boomer small business owners’ firms are viable, but won’t attract big buyers, so instead of folding, a retiring owner can hand the keys over to veteran staff. This could offer fresh opportunities for co-op conversion .

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“Co-ops may not bring about a revolution, but they do bring a priceless return on investment— giving workers the power to repay one good turn with another”.

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