Dataset from first national survey of co-op workers publicly available through Democracy at Work Institute
by Adria Scharf
Over the years, worker cooperatives have sparked the imagination and hope of many who dream of a more just alternative to the capitalist employment relationship.
In a cooperative, workers own and control the business democratically—in contrast with the dominant capitalist employment model, where business owners reap profits from and exercise control over the business while workers often have little say over the conditions of their employment.
A new study by the Democracy at Work Institute (DAWI) documents the real-world experiences of workers in worker cooperatives across the United States. It both affirms the power of this alternative model—and brings down to earth perhaps some loftier utopian dreams.
Nonfinancial job quality benefits may be even more important than financial benefits for workers in cooperatives.
The study report, “How Economic Democracy Impacts Workers, Firms, and Communities,” by Laura Hanson Schlachter and Olga Prushinskaya, centers on the 2017 Census of Individuals in Worker Cooperatives, a national survey of 1,147 people employed in 82 worker cooperatives across the country. The first national survey of worker-owners at co-ops, the study includes in-depth interviews with 15 survey participants and enterprise-level data about the cooperative businesses themselves. This combined approach means worker attitudes and experiences can be linked to company characteristics, and statistical findings are enhanced with quotes from interviewees.
The report documents how workers in co-ops fare in terms of their pay, benefits, and wealth accumulation. It also explores worker perspectives on job quality, autonomy, voice, sense of ownership, and their participation in business governance.
Among the findings, the report reveals:
Cooperatives have markedly egalitarian pay structures and often offer profit-sharing opportunities.
- The median pay ratio was 1.5 to 1, meaning the highest paid employee received just 50 percent more than the lowest paid in the typical cooperative studied. Eight co-ops in the sample had completely flat wage scales in which every individual in the company earns the same amount of pay.
- More than half of individual respondents said they earn more at their cooperative job than in their previous job. The reports suggests there may be a “cooperative wage boost” of $3.52 per hour at the mean and $2 at the median for worker-owners.
- The mean value of equity, or wealth, individuals accumulated in their internal capital accounts was over $10,000; the median value was $2,000.
- Of the 280 worker-owners who had ever received a “cash patronage”–or profit-sharing–distribution from their cooperative, the median value of the distribution was $2,328.
Overall Job Quality Benefits
Nonfinancial job quality benefits may be even more important than financial benefits for workers in cooperatives, according to the report.
- The majority of individual respondents described their job security, job satisfaction, work effort, and the economic stability of the company as somewhat or much better than what they experienced in their last job.
- A majority reported the quality of supervision, feedback, and training was superior in their co-op job.
- Within co-ops, training and skill-building matters for democratic governance. Workers who received cooperative-specific training participated more in workplace decision making.
Benefits to Community
The report suggests that working in a cooperative is associated with increased civic engagement.
- Seven in ten respondents had participated in at least one civic activity in the past year–serving as an officer or committee member in an organization outside of work, attending public meetings, or joining a protest.
At its core, the worker cooperative promises a more worker-centered model of business organization. In seeming tension with that promise are the facts that just 19% of worker cooperatives in the study offered retirement benefits to their workers, and fewer than half offered health benefits.
Just 19% of worker cooperatives in the study offered retirement benefits to their workers, and fewer than half offered health benefits.
The typical cooperative is small, with about eight workers. It seems likely that these very low rates of benefit provision simply reflect the small size of many of the businesses in the study, 29% of which the report describes as “micro” businesses.
Still this tension is a reminder that however worker-centered their values, worker cooperatives in the United States must operate within larger societal systems–including the U.S. system of employer-based benefits provision. That system requires small businesses to shoulder the burden of the too-small welfare state and makes it difficult for employees of small businesses, regardless of their ownership structure, to access benefits comparable to employees in larger firms.
While worker cooperatives embody a democratic alternative—with egalitarian wage scales and worker governance rights—in the current phase of the development of the U.S. cooperative sector, the larger societal systems in which worker cooperatives operate continue to limit their ability to fully enact their worker-centered values in practice.
Racial and Gender Equity
Women and people of color are well-represented in the cooperative sector. The census, however, confirmed the persistence of pay inequalities when it comes to race and gender. Worker-owners, men, and white respondents had higher pay rates than non-owner employees, women, and people of color. The highest paid respondents, those making above $50 an hour, were primarily employed by firms in male-dominated industries like construction, professional, scientific, and technical fields.
The cooperative sector is not immune to replicating larger societal racial and gender inequities. As in every other corner of American society, intentionality will be necessary to achieve something like genuine racial and gender equity.
Accessing the Data
To encourage continued research on the worker cooperative sector, DAWI is making the 2017 census data available to others in the field. Researchers can submit proposals to gain access to this valuable dataset for further analysis.
The study was designed from the start to pair with the earlier (2010) Shared Capitalism at Work study of ESOP, profit sharing, and other firms with “shared capitalist” compensation practices. This makes it possible for future researchers to potentially compare response patterns from ESOP employees who were part of that earlier study and cooperative workers in the census. The census also incorporated questions on civic engagement from the Current Population Survey to enable some comparisons to a national sample.
For decades, research on cooperatives and other democratic forms of organization has represented an important strand of work in economics, sociology, and political science. (A list of nearly 100 existing research publications and teaching materials about worker cooperatives is available through the Curriculum Library for Employee Ownership.) The availability of this data set will encourage continued exploration of a variety of important empirical and theoretical questions.
The Census of Individuals in Worker Cooperatives is sponsored by the Democracy at Work Institute (DAWI) and was conducted in partnership with the U.S. Federation of Worker Cooperatives (USFWC), Center on Wisconsin Strategy, and University of Wisconsin Survey Center.
Adria Scharf, PhD, is a Beyster Fellow and Director of the Curriculum Library for Employee Ownership at the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University’s School of Management and Labor Relations. Over the course of 2021, she will be contributing regular columns covering new research in the employee ownership field to Employee Ownership News.