I wish this was easier to set up where I live; too many big companies holding all of the area's mindshare (for instance, our city is less than 50,000 in population, and we have two sizable startups, one incumbant and Oracle commanding the tech staff in the area). I can't imagine any of these companies tolerating hiring out work to a tech co-op.
Because tech workers are well-compensated, and can pretty easily move themselves around on a risk/reward tradeoff, and also pretty finely tune an effort/payout tradeoff. And because co-ops are probably at least an order of magnitude less likely to produce a $10million+ payout after 5-10 years than a startup is.
Because they would rather hire employees than contractors. Oracle in particular has several miles of red tape just to authorize the use of a particular contractor...
> Enough with the ignorant pop-econ articles laced with
> subtle political pandering.
Can you please point out the ignorant pandering parts? Are you just referring to the "income inequality" headline? Because the article seems pretty good to me. Lots of well-informed, well sourced information about co-ops.
One of the assertions made in the article is obviously wildly incorrect: the ratio between the highest paid and lowest paid workers in traditional corporations is not remotely 600-to-1. In the US, that would mean the top paid people in "traditional corporations" are earning at least $9M/year.
Given that the average corporate CEO in the US makes a bit under $200k/year (per the US Federal government), it would require a definition of "traditional corporation" that has been stretched to the point of misleading. Even for multi-billion dollar publicly traded companies, the CEO base pay is frequently <$1M (this is largely public record). With very rare exception, no amount of bonuses or vested stock options will close the gap between that and a minimum of $9M/year at most large corporations.
Some people at companies may be overcompensated but let's be honest about what typical figures actually look like.
Looking at Ratio of average compensation of CEOs and production workers, 1965–2009. Source: Economic Policy Institute. 2011. Based on data from Wall Street Journal/Mercer, Hay Group 2010. Yes, CEO's only make 200-300 times "production" workers (not lowest paid worker). Fucking break out the champagne, we have beat income inequality!!!
http://www.fastcodesign.com/3036217/infographic-of-the-day/t... gives it as "In the United States, the average American CEO makes a whopping 354 times the salary of the average worker." (One of the comments says it used to be 600:1.) Note that the "S&P 500" got dropped from the description.
I've always wondered why cooperatives assume consensus decision making. Couldn't I be an equal owner of something, but decide to leave the leadership to someone else, at least for a specified time? I feel like the consensus/debate thing often brings down egalitarian organizations. But ownership does not HAVE to equal control.
I don't have a source, but I'm sure I've read about coops that hire a CEO. Basically, they offer a CEO enough money to attract a skilled executive, but they still own the company, and can collectively give the CEO the boot if things go sour. So, individually, everyone answers to the boss, but the boss then answers too the collective group.
You're absolutely right, and I think this is more an assumption about cooperatives rather than how cooperatives actually work. For example, Mondragon is a federation of coops some of which have hundreds of employees; they're not going to have a debate with everybody about everything.
Another way to think about it is that cooperatives are the ultimate expression of a democratic workplace. Yet it's not as if every law were discussed by everybody in a democracy.
In a way, that shows that we have a lot to learn about how cooperatives can work. The quote of the union representative is very relevant: Cooperatives aren't magic dust, even though I personally believe that they are one of the key tools for dealing with the problems of capitalism. As a society, we simply have too little understanding of how cooperatives work, and until enough experiences is collected and networks exist to advise founders of cooperatives, and all those other little things that help traditional business founders are extended to cooperatives, it's going to be difficult.
Except for very small coops, they generally don't -- they generally either appoint managers directly, or elect a board, which generally appoints managers much like the board of any corporation. Cooperatives may require more decisions to be voted on by the membership than most corporations would require be voted on by shareholders, but they generally delegate day-to-day management and much long-term strategy and oversight of management.
One significant advantage of consensus is that once you're able to get past disagreement you have everyone pulling in the same direction. That's not to say that there're no disadvantages, but it's often overlooked.
I'm not sure a cooperative is going to alleviate income inequality. When you form the cooperative, I imagine the first member and subsequent members would filter for ability, qualifications, productivity, etc. So the same "average" and bellow average worker would be left out. How are the passed over want-to-be workers going get in on the cooperative and thus enjoy an income and presumably above average income?
Are the cooperatives going to take on slackers or averagely skilled people wanting to join? How would that cooperative compete against more 'competitive' cooperatives?
I assume the income inequality here is owner vs worker, rather than above average worker vs below average worker. I expect the gap between workers in most fields is much smaller than the gap between the owner's profits and the salaries of each worker.
The idea is that, in a traditional company, the owner (or stockholders) puts up all the investment and risk and in return, get the lion's share of the payoff. In the coop, there is no 'owner' and any profits that aren't reinvested in the company are divvied up by the workers. The trade-off is the difficulty in finding investment capital to get started, which is why many coops are simple businesses like cleaning services that can be started by workers pooling their resources.
Also, in regard to below average workers, I suppose that in many fields a coop could use productivity/skill/experience/etc to scale how big a slice of the pie each worker gets. This would allow any reasonable worker to be hired, while encouraging competitive productivity. It would all depend on the coop's rules.
Your comment seems to presuppose that income inequality is largely the result of differences in skill and/or work levels, which is a common viewpoint that is not necessarily correct. The alternate viewpoint is that there are a lot of hard-working people with highly valuable skills who are underpaid due to the way corporations are usually structured. In a typical corporate structure, the people closest to the money are the best paid, which doesn't necessarily imply that they are the hardest working or mostly highly skilled.
You're right. But my question is about income from those at the margins who are laid off fired etc. Due to stack ranking, etc. How is that addressed? It's important to get those people in the economy as much as its important to attenuate cxo salaries...
I imagine a compartmentalized market of coops where highly successful coops have only a few employees with a large salary, and then they buy goods and services from other coops that may make less money and therefore cost less. So a robotics design coop may make $500k per employee but only have 5 employees. When they ship products they could ship via a shipping coop that only pays $60k per worker.
This allows some room for exploitation but it would probably better adjust for real market value of workers than what we have now.
Doesn't this result is similar income disparity that this idea is trying to avoid? So instead of expressing itself between intra corp hierarchy it's expressed extra-corp hierarchy... So basically its exported but still exists...
The current model is unsustainable, more so when you factor in predictions that 50% of jobs could be automated within the next decades. [1]
I think a mix of cooperatives and a guaranteed base income, healthcare, and housing would allow those that wish to work to continue to do so while not forcing anybody to work who doesn't wish to offers a much better alternative to keeping inequality in check than the current system.
"The various forms of cooperation are incontestably one of the most equitable and rational ways of organizing the future system of production. But before it can realize its aim of emancipating the laboring masses so that they will receive the full product of their labor, the land and all forms of capital must be converted into collective property. As long as this is not accomplished, the cooperatives will be overwhelmed by the all-powerful competition of monopoly capital and vast landed property; ... and even in the unlikely event that a small group of cooperatives should somehow surmount the competition, their success would only beget a new class of prosperous cooperators in the midst of a poverty-stricken mass of proletarians. While cooperatives cannot achieve the emancipation of the laboring masses under the present socioeconomic conditions, it nevertheless has this advantage, that cooperation can habituate the workers to organize themselves to conduct their own affairs..."
I've been dreaming lately of starting up a worker coop in silicon valley that focuses on consumer robotics. Is anyone interested in something like that? I'm an extremely capable hardware guy with a broad skill set and extensive robotics and manufacturing experience. I'm running my own little start up now that could help fund initial operations, and could use some people who excel at software, mechanical design, or general operations.
I am really troubled by the way traditional companies exploit workers, and see that as a major problem of our age. If you could show the world that a worker coop could succeed doing something highly technical like robotics, it would serve as proof that the cooperative model can work for more than just chicken farms. I'd be focused on growth like a silicon valley startup to some extent, but quality of life for everyone in the organization would be a big deal.
I'm also kind of curious about B-corporations, which allow a specific public benefit to share standing with profit as a legal goal. This would be more silicon-valley friendly as far as funding, since worker coops don't have the same revenue generating opportunities for investors. Though the coop could agree to some kind of internal "revenue tax" to pay back investors or save money.
I'd love to see some wealthy people just give their money away to talented organizations that want to spread public good. What I'd love most would be to just work on open source robotics that help the world. I've been developing a system for 3D printed robotics that use as few non-printed parts as possible, making it easier to collaborate online with hardware designs. I don't typically even use screws, since sourcing them can be expensive and slow - most parts just snap together or interlock.
An alternative plan though is for me to get rich the traditional way and then use my own money for good, so I am going to be checking out the new YC RFS for hardware whenever that comes out. I have some good ideas about improving life in the kitchen that might be workable. :)
Just to make sure, when you say traditional companies exploit workers, I presume that means that your coop would pay more than these "exploitive" companies? Or is this a thing where you use the "coop" selling point to vastly underpay your workers?
I mean... if I am concerned about exploitation of workers, do you think I'd be hoping to exploit my workers? You're basically just asking if I'm genuine or not, and the answer is yes - I actually care. I'd rather make much less than my potential pay if doing so lifted many others out of the harsh capitalist dystopia we've created in the US.
I'm actually under the impression that everyone would get paid the same, as everyone would have an equal share of the company and profits. I honestly don't mind if the staff packing shipping boxes gets paid the same as I do designing new robots, though it is also possible to contract out nonessential parts of the operations so that the coop employees only form the core of the company. However that seems like cheating, since you're relying on exploited workers.
I believe open source robotics and solar power can free us from the shackles of work we put on ourselves in the name of productivity. I have a lot of respect for Karl Marx, but I also appreciate why so many of the Marxist experiments failed in the 20th century, and I hope that 21st century tech can change things.
I also believe food and housing should be made available at no cost to anyone who needs it. We can easily afford that in the US, we just have a near-religious aversion to it.
Sorry to be so confrontational about your intentions, however I just see way to often good businesspeople (like Elon Musk) talk about how they are changing the world, while using this to underpay their workers. Now as a theoretical worker at your company, I think I couldn't care less about what other people make, the question for me is would my pay be competitive with my other options. If however your company is based on the idea that normally I would be paid 100k and the janitor 20k, but in yours both of us will earn 60k, well I hope you can understand why I would be less than enthusiastic about this proposition.
A co-op is basically the default corporation. As in, everyone shares the profits and liabilities equally.
This means that if you're making 1 million a year in profit, and you have 10 employees, everyone gets 100,000.
But it also means that if you have to pay 1 million a year as interest service payments on your bank loan, and your profit is 2 million, you still only make 100,000 per person. To address your point, the salary is set by every current employee based upon the financial condition and strategy of the company in real time. If sales are down for a quarter, salaries will go down. If the company is saving for a big investment, salaries will be lower. It all depends on how the owner-employees decide to allocate the funds. As such, you wouldn't so much be an "employee" looking for a competitive market salary, as the 25th co-founder signing up for whatever the current compensation/investment package the present owner-employees have decided upon within the financial strategy of the company.
Basically, expenses and costs are shared equally across the company. As in, every single worker is a co-founder.
This is an ideal model and I'm surprised it hasn't taken off more in tech. We are rapidly approaching the point where talent and capital are the two fundamental bottlenecks to innovation, profits and progress. Offering Engineer #1 one percent compared to the co-founder's 30% seems absurd in this climate. The engineer will just go and co-found his own company, and charge for consulting services.
The co-op is the natural end state of a capitalist society where the only means of progress is through hard innovation, research and optimization. This is the only solution when there is no more easy sweat-shop exploitable work which prints money.
Personally, this future can't happen fast enough. Most talented people I know are fed up with the tyrannical power structure of startups and corporations in general.
You can also set it up like a small democracy as the company gets larger. Have the coop (that is all the people in it) evaluate different jobs and adjust salaries accordingly (or perhaps pay people based off of the jobs they could fill rather than the ones they are filling). Have steering committees make decisions about where to place manufacturing and design studios, etc. Keep it all very internally (and externally?) transparent.
The point of the cooperative model is to find people who do not necessarily prioritize profit over all else. Teachers for example tend to value the social good of their work over pay. Worker coops would offer people like that a way to actually produce goods rather than just educate people.
But the worker coop model is not for people who want the most profit. However we cannot simultaneously have a world where no one is exploited but the most capable maximize their profit. In order to have more income equality the elite would have to accept less pay. We see major inequality because those who could have taken as much profit as possible. That kind of thinking would need to end if we are to end worker exploitation.
However there are non-pay related benefits to working for a coop and we would find people who appreciate those benefits more than money. Certainly this is not for everyone.
But what if the coop makes millions and every worker gets $500k per year? That would be an awesome place to work.
> I honestly don't mind if the staff packing shipping boxes gets paid the same as I do designing new robots
You may not mind, but this sort of salary system would undoubtedly make it very difficult to attract people to more senior, in-demand positions. If the going rate for a highly experienced robotics engineer is 300k, and you can only offer 100k because you can't afford to pay everyone 300k, it will be nearly impossible to fill the position.
Certainly this model makes some things more difficult. That is kind of unavoidable when you do things totally differently. There will be pros and cons any time you choose one approach over another. However, this problem isn't insurmountable. The members of the collective could all agree to pay certain bonuses to highly productive members, or everyone could agree to give more productive members more time off.
Alternatively, we could only hire people like me. If you want to make the most money, go work for a traditional exploitative company with a lot of extra money. If you want to live with a clean conscience, take less pay. Teachers do this for example. They teach because they care even though the salary is less. A tech coop could offer better pay than teaching with similar non-monetary benefits.
We will never end exploitation as long as everyone focuses solely on maximum profit, but if anyone out there wants something different we will find them. I am not saying this is guaranteed to succeed but that it is worth trying. Elon Musk didn't think SpaceX would succeed but he knew it was worth trying even if he lost all his money. Not trying the coop model means accepting the status quo of exploitation, and I'm not sure I can do that.
Actually if a normal company is to make a profit off of you, you will get paid less than what you are worth to them. There are some market forces at play that determine typical worker's pay, but they aren't really tied to what you are worth and are instead the smallest fraction of your worth the company can get away with based on what other companies offer. Because of the nature of profit seeking companies, this fraction is always dropping in a healthy market. WalMart workers, for example, are not paid what they are "worth" or the company would make zero profit on their labor. It is a frustrating misconception that workers in a capitalist market get paid what they are worth.
In a coop, many people will get paid more than they would otherwise, as no one gets paid starvation wages unlike most companies in the US.
Highly productive workers may get paid less in a coop than in a typically arranged company however because typical companies exploit the workers at the very bottom in order to reserve more money for those at the top. It is possible for highly technical workers to get paid more in a coop though. Apple's latest profits were something like $750k per worker per quarter (this includes apple store employees), though clearly they are exceptional. If a coop does very well, they could easily provide more money to all workers than the typical pay of a highly successful company.
A coop that makes a lot of money can also contract out some work to coops that make less money, thereby taking advantage of cheaper labor without relying on exploitation of workers. A coop that ships boxes will earn less per worker than a coop that designs robots, but such a system is generally more fair to workers.
So some people may get paid less than normal but most would get paid more. Traditional companies can afford to pay more to those at the top by exploiting those at the bottom. This does not happen in a coop.
I don't think it's a misconception that workers get paid what they are worth. In a capitalist system, something is only "worth" as much as someone is willing to pay for it. Few people question this notion when we're talking about the price of gold or stock market shares, but it's true of labor as well.
From what I understand, Marx's definition of exploitation involves companies paying some workers less than what the fruits of their labor are worth. For example, McDonalds might pay an employee $9 an hour while getting $12 an hour in revenue from that employee's work. But, it sounds to me like your coop would be guilty of the same thing.
To take an extreme example, suppose your coop includes a janitor and a heart surgeon. Both used to work as independent contractors and bill for their time to whoever needed work done, and now your coop sends the bills and takes in the money. Before joining your coop, the janitor was making $8.50 an hour and the surgeon, $500 an hour. The coop now pulls in $508.50 an hour and gets to decide how to distribute it. I gather from your comments that you find income inequality and starvation wages to be undesirable things. Therefore, you equalize things somewhat and give the janitor $20 an hour and the surgeon $488.50.
Now, haven't you committed the same sin as the exploitative companies, namely paying an individual less than the fruits of their labor have produced?
Well in basically all cases the worker can't be paid exactly as much as they produce because some of that money must be used to pay for other business costs.
However in a market with excess labor, workers can get paid a very small fraction of the value they produce, keeping large sums of profit for those at the top. In a coop the workers simply won't allow this, and more reasonable pay rates can be determined.
According to another commenter, many coops operate with some kind of market rate pay scale and place limits on the ratio of highest pay to lowest pay. This prevents one CEO from gobbling up half of the money used to pay workers and leaves more money to pay those at the bottom.
So you are correct that in all cases workers are paid less than the value of what they produce, but in a worker-run coop the ratio of pay to value can be much higher than in a typical business.
As far as workers getting paid what they are "worth", I think you are missing something. Yes, workers are only worth what someone is willing to pay for them. However I don't think workers get paid the maximum a company is willing to pay, especially in a market with excess labor. A company may be "willing" to pay programmers $180k per year before their business model fails, but due to a good supply of desperate people they may only need to pay people $80k per year. So in that situation the workers are getting paid much less than they are worth.
Would you agree that workers typically do not get paid the maximum the company would be willing to pay but instead get paid the minimum the market will bear?
I agree with you entirely. Honestly I have to think that people with this logic don't truly believe it, the cognitive dissonance would be too high. Rather they are trying to exploit naive workers who have an idealistic understanding of the world. Meanwhile you and I will continue to be paid fairly by so called "exploitative" companies.
I hope you will read my comment adjacent to yours, rather than simply assure yourself that what you already believe is correct. You can theorize that I simply don't understand, but I offer an explanation for why this is the case in my other comment.
Simply put, most workers would get paid more than they typically would, but the workers at the very top may get paid less. This would be true in any scheme that seeks to balance out the pay of those at the top, since there would no longer be huge sums of money from the exploitation of those at the bottom.
If you don't believe exploitation exists, I urge you to look into the state of capitalism in the 1850's when Karl Marx was forming his opinions and compare that to the state of WalMart workers today. Exploitation is a default component of capitalism and is not simply some imagined issue made up by those who wish for a more egalitarian society.
And apparently other commenters have mentioned that coops can have the same kind of pay structures as normal companies. For example someone noted that one company limits the pay to the CEO to 75x the lowest worker's pay, and he currently sits at just 60x. This is closer to pay differences we saw in the US in the 1960's.
But certainly when you pay the people at the bottom a fair wage, there may be less cash to throw around at the top. This is not a design flaw.
Organizing as a cooperative does not necessary mean that everybody is paid the same. For example John Lewis a large UK high street retailer is organized as a cooperative and limits the highest earner salary to x75 the lowest salary (the current chairman is at x60), and bonuses are distributed in an equitable manner.
> I'm actually under the impression that everyone would get paid the same, as everyone would have an equal share of the company and profits.
Real-world worker's cooperatives have equal voting shares for employees, but not necessarily equal pay (though generally not as unequal pay as is common in traditional corporations.)
They feature democratic control, and its quite possible for a consensus to exist that some labor is more valuable to the coop than other labor.
I actually recently moved to SF and was looking for a co-op in the area, but couldn't find much. I'm also a robotics engineer (software mostly) and couldn't find much interesting work going on in the Bay Area with regards to robotics. So I'm very interested in learning more if you're actually planning on moving forward with this proposition.
So... I've been interested in this model for startups. But it doesn't make sense, right? Because startups already give equity to employees as part of their compensation package. But nobody would call Google a "worker coop" -- but I haven't figured out exactly why not. What's the deal?
I think a worker coop is always explicitly owned equally by all workers, which isn't what Google does.
The model makes it hard to get investment, since there are no "super owners" like investors typically are. The coop could pay the investment back like a high interest loan with flexible terms, but I haven't seen exactly how that would work. I'm interested in that though - see my other comment here.
Options to buy less than .1% (possibly even a non-voting .1%) of a company which is majority-controlled by just a few founders is a far cry from joint-owning a company. Not only are the equity proportions vastly different but so is the management structure.
This basically sounds like the lean-startup equivalent in the non-tech space. I suspect it's more possible than before because it's easier for the coops to outsource the legal bits than it used to be. It is ironic and perhaps even naive to pitch this as a reaction against capitalism when it is the efficiencies of capitalism making it possible in the first place.
And if these people really think this is a reaction against "capitalism", in its capacity as all-powerful bogeyman rather than description of how economic transactions work...
"but to Henry Lezama, the goal is to keep growing, to bring more people into the cooperative."
... they're in for a shock because as they bring in more people, in the limit this just becomes another form of business, and as more regulations kick in based on their size they won't be able to help becoming a "business", to say nothing of how "flat management" becomes practically impossible pretty quickly and hierarchy will set in. (It's a human thing, not an ideological thing or a government thing or a "capitalism" thing. We instinctively, and I mean that fully literal, structure ourselves into social hierarchies.)
It's fantastic that people are starting to realize this and move the gains of this sort of business structure down the economic ladder. It's a powerful and flexible structure for both the members and society itself.
Co-ops seem like they are better suited for a side-hobby rather than your main source of income.
Part of the reason for less income inequality is that the types of people who join them aren't primarily concerned with their monetary compensation. They are more concerned about a cause or outcome than earning money.
It's selection bias.
The majority of people want to get paid the most they can. It seems like a co-op tends to pay the in demand and highly skilled people less, and the less skilled people more.
I think it would be hard to attract and retain high-end talent if they can earn more in the standard workplace.
It's a bit of a chicken and egg situation. I suspect variations on the co-op model, more 'holistically' extended to include more parts of life perhaps, might be preferable to many people over the current approach, whatever it's called. But without experiencing it, and with the mindset that more money = more happiness, most people wouldn't give it a shot. And I understand that.
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[ 3.1 ms ] story [ 123 ms ] threadhttp://techworker.coop/sites/default/files/TechCoopHOWTO.pdf
I wish this was easier to set up where I live; too many big companies holding all of the area's mindshare (for instance, our city is less than 50,000 in population, and we have two sizable startups, one incumbant and Oracle commanding the tech staff in the area). I can't imagine any of these companies tolerating hiring out work to a tech co-op.
Why should the internal structure of a subcontractor matter to the client?
Given that the average corporate CEO in the US makes a bit under $200k/year (per the US Federal government), it would require a definition of "traditional corporation" that has been stretched to the point of misleading. Even for multi-billion dollar publicly traded companies, the CEO base pay is frequently <$1M (this is largely public record). With very rare exception, no amount of bonuses or vested stock options will close the gap between that and a minimum of $9M/year at most large corporations.
Some people at companies may be overcompensated but let's be honest about what typical figures actually look like.
"Only about 20 percent of a CEO's pay is base salary; the rest is made up of incentives based on the company's performance." http://www.salary.com/executive-compensation-it-starts-with-...
Looking at Ratio of average compensation of CEOs and production workers, 1965–2009. Source: Economic Policy Institute. 2011. Based on data from Wall Street Journal/Mercer, Hay Group 2010. Yes, CEO's only make 200-300 times "production" workers (not lowest paid worker). Fucking break out the champagne, we have beat income inequality!!!
http://www.fastcodesign.com/3036217/infographic-of-the-day/t... gives it as "In the United States, the average American CEO makes a whopping 354 times the salary of the average worker." (One of the comments says it used to be 600:1.) Note that the "S&P 500" got dropped from the description.
Another way to think about it is that cooperatives are the ultimate expression of a democratic workplace. Yet it's not as if every law were discussed by everybody in a democracy.
In a way, that shows that we have a lot to learn about how cooperatives can work. The quote of the union representative is very relevant: Cooperatives aren't magic dust, even though I personally believe that they are one of the key tools for dealing with the problems of capitalism. As a society, we simply have too little understanding of how cooperatives work, and until enough experiences is collected and networks exist to advise founders of cooperatives, and all those other little things that help traditional business founders are extended to cooperatives, it's going to be difficult.
Except for very small coops, they generally don't -- they generally either appoint managers directly, or elect a board, which generally appoints managers much like the board of any corporation. Cooperatives may require more decisions to be voted on by the membership than most corporations would require be voted on by shareholders, but they generally delegate day-to-day management and much long-term strategy and oversight of management.
Are the cooperatives going to take on slackers or averagely skilled people wanting to join? How would that cooperative compete against more 'competitive' cooperatives?
The idea is that, in a traditional company, the owner (or stockholders) puts up all the investment and risk and in return, get the lion's share of the payoff. In the coop, there is no 'owner' and any profits that aren't reinvested in the company are divvied up by the workers. The trade-off is the difficulty in finding investment capital to get started, which is why many coops are simple businesses like cleaning services that can be started by workers pooling their resources.
Also, in regard to below average workers, I suppose that in many fields a coop could use productivity/skill/experience/etc to scale how big a slice of the pie each worker gets. This would allow any reasonable worker to be hired, while encouraging competitive productivity. It would all depend on the coop's rules.
This allows some room for exploitation but it would probably better adjust for real market value of workers than what we have now.
I think a mix of cooperatives and a guaranteed base income, healthcare, and housing would allow those that wish to work to continue to do so while not forcing anybody to work who doesn't wish to offers a much better alternative to keeping inequality in check than the current system.
[1] http://www.technologyreview.com/view/519241/report-suggests-...
http://www.forbes.com/sites/maryjosephs/2014/11/05/millionai...
Also Bi-Mart, fantastic coop chain.
~ Bakunin
I am really troubled by the way traditional companies exploit workers, and see that as a major problem of our age. If you could show the world that a worker coop could succeed doing something highly technical like robotics, it would serve as proof that the cooperative model can work for more than just chicken farms. I'd be focused on growth like a silicon valley startup to some extent, but quality of life for everyone in the organization would be a big deal.
I'm also kind of curious about B-corporations, which allow a specific public benefit to share standing with profit as a legal goal. This would be more silicon-valley friendly as far as funding, since worker coops don't have the same revenue generating opportunities for investors. Though the coop could agree to some kind of internal "revenue tax" to pay back investors or save money.
I'd love to see some wealthy people just give their money away to talented organizations that want to spread public good. What I'd love most would be to just work on open source robotics that help the world. I've been developing a system for 3D printed robotics that use as few non-printed parts as possible, making it easier to collaborate online with hardware designs. I don't typically even use screws, since sourcing them can be expensive and slow - most parts just snap together or interlock.
An alternative plan though is for me to get rich the traditional way and then use my own money for good, so I am going to be checking out the new YC RFS for hardware whenever that comes out. I have some good ideas about improving life in the kitchen that might be workable. :)
I'm actually under the impression that everyone would get paid the same, as everyone would have an equal share of the company and profits. I honestly don't mind if the staff packing shipping boxes gets paid the same as I do designing new robots, though it is also possible to contract out nonessential parts of the operations so that the coop employees only form the core of the company. However that seems like cheating, since you're relying on exploited workers.
I believe open source robotics and solar power can free us from the shackles of work we put on ourselves in the name of productivity. I have a lot of respect for Karl Marx, but I also appreciate why so many of the Marxist experiments failed in the 20th century, and I hope that 21st century tech can change things.
I also believe food and housing should be made available at no cost to anyone who needs it. We can easily afford that in the US, we just have a near-religious aversion to it.
So yes, I am genuine.
This means that if you're making 1 million a year in profit, and you have 10 employees, everyone gets 100,000.
But it also means that if you have to pay 1 million a year as interest service payments on your bank loan, and your profit is 2 million, you still only make 100,000 per person. To address your point, the salary is set by every current employee based upon the financial condition and strategy of the company in real time. If sales are down for a quarter, salaries will go down. If the company is saving for a big investment, salaries will be lower. It all depends on how the owner-employees decide to allocate the funds. As such, you wouldn't so much be an "employee" looking for a competitive market salary, as the 25th co-founder signing up for whatever the current compensation/investment package the present owner-employees have decided upon within the financial strategy of the company.
Basically, expenses and costs are shared equally across the company. As in, every single worker is a co-founder.
This is an ideal model and I'm surprised it hasn't taken off more in tech. We are rapidly approaching the point where talent and capital are the two fundamental bottlenecks to innovation, profits and progress. Offering Engineer #1 one percent compared to the co-founder's 30% seems absurd in this climate. The engineer will just go and co-found his own company, and charge for consulting services.
The co-op is the natural end state of a capitalist society where the only means of progress is through hard innovation, research and optimization. This is the only solution when there is no more easy sweat-shop exploitable work which prints money.
Personally, this future can't happen fast enough. Most talented people I know are fed up with the tyrannical power structure of startups and corporations in general.
But the worker coop model is not for people who want the most profit. However we cannot simultaneously have a world where no one is exploited but the most capable maximize their profit. In order to have more income equality the elite would have to accept less pay. We see major inequality because those who could have taken as much profit as possible. That kind of thinking would need to end if we are to end worker exploitation.
However there are non-pay related benefits to working for a coop and we would find people who appreciate those benefits more than money. Certainly this is not for everyone.
But what if the coop makes millions and every worker gets $500k per year? That would be an awesome place to work.
You may not mind, but this sort of salary system would undoubtedly make it very difficult to attract people to more senior, in-demand positions. If the going rate for a highly experienced robotics engineer is 300k, and you can only offer 100k because you can't afford to pay everyone 300k, it will be nearly impossible to fill the position.
Alternatively, we could only hire people like me. If you want to make the most money, go work for a traditional exploitative company with a lot of extra money. If you want to live with a clean conscience, take less pay. Teachers do this for example. They teach because they care even though the salary is less. A tech coop could offer better pay than teaching with similar non-monetary benefits.
We will never end exploitation as long as everyone focuses solely on maximum profit, but if anyone out there wants something different we will find them. I am not saying this is guaranteed to succeed but that it is worth trying. Elon Musk didn't think SpaceX would succeed but he knew it was worth trying even if he lost all his money. Not trying the coop model means accepting the status quo of exploitation, and I'm not sure I can do that.
You say that a company that pays me what the market says I'm worth, is "exploitative." Your coop won't exploit me, and results in me earning less.
So why are they the exploiters again, and not you?
In a coop, many people will get paid more than they would otherwise, as no one gets paid starvation wages unlike most companies in the US.
Highly productive workers may get paid less in a coop than in a typically arranged company however because typical companies exploit the workers at the very bottom in order to reserve more money for those at the top. It is possible for highly technical workers to get paid more in a coop though. Apple's latest profits were something like $750k per worker per quarter (this includes apple store employees), though clearly they are exceptional. If a coop does very well, they could easily provide more money to all workers than the typical pay of a highly successful company.
A coop that makes a lot of money can also contract out some work to coops that make less money, thereby taking advantage of cheaper labor without relying on exploitation of workers. A coop that ships boxes will earn less per worker than a coop that designs robots, but such a system is generally more fair to workers.
So some people may get paid less than normal but most would get paid more. Traditional companies can afford to pay more to those at the top by exploiting those at the bottom. This does not happen in a coop.
From what I understand, Marx's definition of exploitation involves companies paying some workers less than what the fruits of their labor are worth. For example, McDonalds might pay an employee $9 an hour while getting $12 an hour in revenue from that employee's work. But, it sounds to me like your coop would be guilty of the same thing.
To take an extreme example, suppose your coop includes a janitor and a heart surgeon. Both used to work as independent contractors and bill for their time to whoever needed work done, and now your coop sends the bills and takes in the money. Before joining your coop, the janitor was making $8.50 an hour and the surgeon, $500 an hour. The coop now pulls in $508.50 an hour and gets to decide how to distribute it. I gather from your comments that you find income inequality and starvation wages to be undesirable things. Therefore, you equalize things somewhat and give the janitor $20 an hour and the surgeon $488.50.
Now, haven't you committed the same sin as the exploitative companies, namely paying an individual less than the fruits of their labor have produced?
However in a market with excess labor, workers can get paid a very small fraction of the value they produce, keeping large sums of profit for those at the top. In a coop the workers simply won't allow this, and more reasonable pay rates can be determined.
According to another commenter, many coops operate with some kind of market rate pay scale and place limits on the ratio of highest pay to lowest pay. This prevents one CEO from gobbling up half of the money used to pay workers and leaves more money to pay those at the bottom.
So you are correct that in all cases workers are paid less than the value of what they produce, but in a worker-run coop the ratio of pay to value can be much higher than in a typical business.
As far as workers getting paid what they are "worth", I think you are missing something. Yes, workers are only worth what someone is willing to pay for them. However I don't think workers get paid the maximum a company is willing to pay, especially in a market with excess labor. A company may be "willing" to pay programmers $180k per year before their business model fails, but due to a good supply of desperate people they may only need to pay people $80k per year. So in that situation the workers are getting paid much less than they are worth.
Would you agree that workers typically do not get paid the maximum the company would be willing to pay but instead get paid the minimum the market will bear?
Simply put, most workers would get paid more than they typically would, but the workers at the very top may get paid less. This would be true in any scheme that seeks to balance out the pay of those at the top, since there would no longer be huge sums of money from the exploitation of those at the bottom.
If you don't believe exploitation exists, I urge you to look into the state of capitalism in the 1850's when Karl Marx was forming his opinions and compare that to the state of WalMart workers today. Exploitation is a default component of capitalism and is not simply some imagined issue made up by those who wish for a more egalitarian society.
And apparently other commenters have mentioned that coops can have the same kind of pay structures as normal companies. For example someone noted that one company limits the pay to the CEO to 75x the lowest worker's pay, and he currently sits at just 60x. This is closer to pay differences we saw in the US in the 1960's.
But certainly when you pay the people at the bottom a fair wage, there may be less cash to throw around at the top. This is not a design flaw.
Real-world worker's cooperatives have equal voting shares for employees, but not necessarily equal pay (though generally not as unequal pay as is common in traditional corporations.)
They feature democratic control, and its quite possible for a consensus to exist that some labor is more valuable to the coop than other labor.
My worker co-op started out in the Bay Area and now is bi-coastal; SV is full of like-minded folks so you're among good company.
PS, check out http://www.reddit.com/r/cooperatives.
The model makes it hard to get investment, since there are no "super owners" like investors typically are. The coop could pay the investment back like a high interest loan with flexible terms, but I haven't seen exactly how that would work. I'm interested in that though - see my other comment here.
And if these people really think this is a reaction against "capitalism", in its capacity as all-powerful bogeyman rather than description of how economic transactions work...
"but to Henry Lezama, the goal is to keep growing, to bring more people into the cooperative."
... they're in for a shock because as they bring in more people, in the limit this just becomes another form of business, and as more regulations kick in based on their size they won't be able to help becoming a "business", to say nothing of how "flat management" becomes practically impossible pretty quickly and hierarchy will set in. (It's a human thing, not an ideological thing or a government thing or a "capitalism" thing. We instinctively, and I mean that fully literal, structure ourselves into social hierarchies.)
It's fantastic that people are starting to realize this and move the gains of this sort of business structure down the economic ladder. It's a powerful and flexible structure for both the members and society itself.
Part of the reason for less income inequality is that the types of people who join them aren't primarily concerned with their monetary compensation. They are more concerned about a cause or outcome than earning money.
It's selection bias.
The majority of people want to get paid the most they can. It seems like a co-op tends to pay the in demand and highly skilled people less, and the less skilled people more.
I think it would be hard to attract and retain high-end talent if they can earn more in the standard workplace.