WORKER COOPERATIVES

Worker Cooperatives: Reclaiming Ownership, Reviving Democracy

Imagine a business where decisions are made by the people who work there, not by distant shareholders or billionaire owners, but by the very employees who keep the lights on and the wheels turning. Imagine profits being shared equitably, working conditions decided democratically, and the company's long-term success aligned with its workforce's well-being.

This isn’t a fantasy. It’s a worker cooperative, a model of economic democracy that has proven both morally compelling and economically sound. It may be one of the most powerful yet underused tools to combat inequality, restore community wealth, and reclaim economic control for ordinary people.

What Is a Worker Cooperative?

A worker cooperative is a business owned and self-managed by its employees. Every worker-owner:

• Has a share in the business,
• Votes on major decisions (one person, one vote),
• Shares in the profits,
• And often serves on elected committees or governance bodies.

Unlike traditional corporations, where decisions are made to benefit shareholders, often at the expense of workers and communities, worker cooperatives align ownership with labor.

They are democratic, rooted in the community, and often far more stable in times of economic downturn.

A Forgotten American Tradition: SAIC and Beyond

The United States has a long but often overlooked history of worker ownership. One notable example you mentioned is Science Applications International Corporation (SAIC).

Founded in 1969 by Dr. J. Robert Beyster, SAIC was one of the first major employee-owned tech firms. Beyster believed that scientists and engineers should share ownership in the ideas they helped create. The company grew rapidly under this cooperative model, with over 40,000 employees eventually participating in its employee-ownership program. SAIC’s success proved that employee ownership could work in small shops, co-ops, and complex, high-tech industries.

Though SAIC eventually shifted away from its original structure after going public, it remains a powerful example of how a worker-owned enterprise can thrive at scale.

Other historical examples include:

• Cooperative Home Care Associates (CHCA) in the Bronx, a worker-owned business employing over 2,000 home health aides, mostly women of color, who control their workplace and share in its success.
• Equal Exchange is a fair-trade food company owned by its workers, prioritizing ethical sourcing and worker governance.

International Models: Scaling Worker Ownership

Worker cooperatives are not just successful in isolated cases. They have thrived internationally, especially in countries that support them through policy and infrastructure.

• Spain – The Mondragon Corporation

Perhaps the most famous example is Mondragon, a federation of over 90 worker cooperatives based in the Basque region of Spain. Founded in 1956, it now employs over 80,000 workers, all owners. Decisions are made democratically, and profits are reinvested in the community. Mondragon operates in finance, manufacturing, education, and retail, proving that worker ownership can scale across sectors.

• Italy – Emilia-Romagna Region

Home to one of the densest networks of cooperatives in the world, this region’s success stems from supportive laws, local investment funds, and cooperative education. Cooperatives here are highly productive and woven into the community's social and economic fabric.

• Argentina – Worker Recaptured Factories

Following the 2001 economic collapse, thousands of workers in Argentina took over abandoned factories and turned them into cooperatives. Many of these cooperatives still operate despite legal and financial challenges.

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Why Worker Cooperatives Work

Studies consistently show that worker-owned firms:

• Are more resilient during recessions.
• Pay better wages and have lower wage gaps.
• Experience lower turnover and higher employee satisfaction.
• Invest more in community and environmental sustainability.

Perhaps most importantly, they help address the massive wealth inequality that has grown under shareholder capitalism. By giving workers equity and voice, cooperatives build assets and power where they’re needed most.

The Challenges and How to Fix Them

Worker cooperatives are not a silver bullet. They face obstacles:

• Lack of access to capital since traditional lenders are wary of non-traditional governance.
• Legal and regulatory frameworks that don’t recognize or support the cooperative model.
• Lack of awareness and education among workers and entrepreneurs.

But these are solvable problems if we choose to solve them.

A Policy Blueprint for Strengthening Worker Cooperatives

To scale worker ownership in the United States, Project 2029 proposes:

• Create a Federal Cooperative Development Agency

• Modeled on the Small Business Administration.
• Provides seed funding, technical assistance, and training to cooperative startups and conversions.
• Offers grants to regional co-op development centers and incubators.

• Tax Incentives for Conversions

• Business owners who sell to their employees (primarily upon retirement) should receive capital gains tax deferrals or exemptions.
• Employee Stock Ownership Plan (ESOP) transitions should be fast-tracked toward full cooperative governance.

• Cooperative Incubators at Community Colleges

• Embed cooperative training programs within vocational and entrepreneurship tracks.
• Connect students with pathways to cooperative ownership.

• Legal Recognition and Simplification

• States and the federal government must formally update corporate codes to recognize worker cooperatives.
• Provide model bylaws, governance templates, and dispute resolution mechanisms.

• Public Procurement Preferences

• Give contracting preference to cooperatives and employee-owned businesses in public purchasing.

A Moral and Democratic Imperative

Worker cooperatives are more than a business model. They are a democratic alternative to corporate feudalism. In an age of billionaire consolidation, gig work exploitation, and economic insecurity, cooperatives offer a path toward shared power, wealth, and responsibility.

This is not charity. It is justice. The economy functions as it should, not for profit alone but for people and the community.

If democracy is to mean anything in the 21st century, it must exist in the voting booth and the workplace. Strengthening worker cooperatives is how we get there.

William James Spriggs