Let’s hear it for the co-operative

As more and more Spanish companies take advantage of new labor legislation making it easier and cheaper to lay workers off, pushing official unemployment figures beyond 20 percent of the workforce, perhaps the time has come for the country’s 4.3 million jobless to think about a more cooperative approach to job creation.

After all, a highly successful model is close to hand.

Based in the Basque town of the same name, the Mondragón Cooperative Corporation (MCC) is the world’s biggest co-op system with more than 85,000 worker-owners employed in 256 companies, and who produce the Orbea bikes that won gold at the Beijing Olympics, along with Fagur fridges, Brandt ovens, Eroski supermarkets, or the forthcoming electric City Car.

The Mondragón model was developed in the 1940s by Roman Catholic priest, Father José María Arizmendi. It started with a school, a credit union, and a shop, all owned by workers who each had an equal share and vote. The three-in-one combination allows the cooperative to rely on its own resources for finance and training.

The worker-owners cannot be fired. Quite the opposite, through regular assemblies, it’s the workforce who hires and fires their managers, as well as deciding strategy and policy. As the worker-owners accumulate resources, they can encourage the formation of new co-ops, indirectly through their bank and directly through their firms, and bring them into the overall structures of MCC governance. This is how they grew from one small shop to 260 enterprises in the past 50 years. Finally, if a worker-owner retires, he or she can 'cash out,' but the share cannot be sold. It is only available for purchase by a new worker-owner at that firm.

This last crucial point was developed by Arizmendi from his studies of Catholic social theory, as well as the works of Karl Marx and the English co-operativist Robert Owen. A worker-owner's ability to sell his or her share to anyone was a flaw in Owen's approach, Arizmendi decided, since it enabled outsiders to buy the more successful coops, turning their workers back into wage-labor, while starving the other less successful co-ops of resources. Under Arizmendi's new approach, only four out of the several hundred MCC coop ventures have failed during the half century since Mondragón began.

What’s more, the workers themselves decide on the income spread between the lowest paid worker and the highest paid manager, which currently averages about 4.5 to one. (Compared with more than 400 to one in the United States and Britain.

And as even the IMF now admits, the extreme gap between rich and poor was a key cause of the global asset bubble and financial crisis, and is highly damaging to the social fabric of democracies.

Not that Mondragón wasn’t hit by the 2009 slump in machine tools, car components, and its other specialist sectors. In response, its cooperatives took pay cuts of up to 20 percent, and drew lotteries to lay off workers for a year, on 80 percent of their pay.

Faced with sharp decline, cities in the US rustbelt have sought help from Mondragón to create co-ops, hoping to emancipate itself from a Wall Street that hollows out companies by draining their cash and shutting down plants.

In late 2008, the MCC and the million-plus-member United Steelworkers (USW) union announced an alliance to develop Mondragon-type manufacturing cooperatives in the United States and Canada.

More than half a century after it was set up, Mondragón is alive and well, and generates 3 percent of industrial output in the Basque region and generates annual sales of E24bn. Almost 60 percent of its heavy production is exported.

 

 

Comments

[Publicado por: puma ferrari]

Pues eso. So much for the stupid ethnical homogeneity they are seeking around Brussels...

[Publicado por: Jaume]

Spain is pain because of this:

http://www.ingenioconsaboralaca.com/2011/04/ocupado.html