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Unions should embrace new wave of worker co-operatives

Across the world a new model of worker-owned co-ops is bucking neoliberal austerity, says NICK MATTHEWS

There is no doubt that trade unions and worker co-operatives have the same roots. 

Both are attempts by workers to retain more of the value of what they produce and more control over how it is produced. Indeed when you look at the very early trade unions they look more like co-operatives. 

In more recent history unions and co-ops have not always been on the best of terms. 

Some trade unionists have seen worker co-ops as a hippy distraction to outright public ownership in the form of nationalisation of key industries. 

On the other hand the record of industrial relations in the nationalised industries has not always been that impressive. 

There is no doubt that since the great financial crash, the full impact of which is far from over, there has been a renewed neoliberal onslaught on workers’ terms and conditions and upon the public services they both work in and depend upon. 

Trade unions and co-operatives have both struggled to find an adequate response to the intensification of class warfare passed off as austerity. 

This has led to a reappraisal of the relationship between unions and co-ops in many quarters. 

A comprehensive international survey of trade unions has shown a huge upturn in their support for workers’ co-ops and particularly in strengthening their support capacity to create and sustain them.

This research published by the ILO is full of terrific examples for ways unions and co-operators have worked together to create significant benefits for their members. 

The ILO’s international Journal of Labour Research has published a special issue exploring the relationship between the trade unions and worker co-operatives?

The editor Pierre Laliberte points out that the way finance capital has taken over the management of productive capital has eroded any sense of trust workers had in their employers’ social responsibility. The irony is of course that a large portion of finance capital is workers’ savings. 

This issue has been hugely clouded in Britain by the coalition’s creation of false co-operatives to mask their public services privatisation agenda. There is no doubt this has prevented the trade unions embracing worker-run co-ops.

One country that was particularly hard hit by the crisis in the 1990s was Argentina where hundreds of worker-owned co-operatives have emerged from the crisis. 

In fact across south America there has been a growth in worker co-ops. 

A key case study is that of Forja in Brazil, south America’s largest forging business. With the support of Brazil’s ABC Metalworkers Union, it became the worker-owned co-op Uniforja. This turned out to be a huge success leading to a wave of co-op formation and a new organisation, the Unisol worker co-op federation, to represent them.

This federation now has over 800 member organisations supporting over 70,000 jobs. 

Another important example with probably more relevance for us in Britain is the new union co-op model from the US. This grew out of collaboration between the famous Basque co-operative Mondragon and the United Steel Workers of America.

The union co-op model adapts the Mondragon model by turning the social council into a union bargaining committee. Interestingly one of their case studies is also a forging business. Market Forge’s workforce was, with the support of the UAW, able to buy and keep open the business without having to permanently lay anyone off. 

A missing ingredient which the Basques have is the Caja Laboral, the huge credit union which bankrolls the whole Mondragon phenomenon. It is this crucial link the US union co-op model is now seeking to create. There are numerous other examples from Africa, Latin America and Europe.

One other interesting development, coming from France, could be a really important opportunity here in Britain. That is the establishment of a new law that guarantees that when a firm is sold the employees have a fair chance to make a collective bid for it.  

This is coupled with a series of financial support ideas which make the “entry costs” for worker co-ops much lower. 

This would be a great thing here where often the succession crisis in family firms leads them to either closing or being asset-stripped by larger competitors. A great idea methinks for Labour’s election manifesto.

 

Nick Matthews is chair of Co-operatives UK. He is writing in personal capacity.

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