This week, several media outlets posted stories about one of Bernie Sanders’ proposals for restoring the American middle class and boosting job creation as well as productivity and job satisfaction – all while providing greater job security and putting more money into the pockets of workers.
That proposal, which Sanders made months before announcing his candidacy, is the establishment of worker-owned co-operatives:
Instead of giving huge tax breaks to corporations which ship our jobs to China and other low-wage countries, we need to provide assistance to workers who want to purchase their own businesses by establishing worker-owned cooperatives.
Although it was included in his “Economic Agenda for America,” the idea of employee-owned companies is not a new one. It is, in fact, one of the cornerstones of socialism: to have the means of production under the direction and control of the workers themselves under a decentralized management model. It is a model that was embraced by President Ronald Reagan himself, back in 1987:
I can’t help but believe that in the future we will see in the United States and throughout the Western world an increasing trend toward the next logical step, employee ownership. It is a path that befits a free people.
Currently, the US Federation of Worker Cooperatives estimates that there are 350-400 such worker-owned companies in the country today, employing 5,000 workers. Most of them are service providers of one kind or another. Not surprisingly, many of them are found in immigrant and working-class communities. These worker-owned co-operatives generate more than half a billion dollars in annual revenues – an indication of the economic potential of this business model.
Significantly, worker co-ops in the US have done better under adverse economic conditions. Such businesses were the subject of a 2013 documentary film by Mark Dworkin and Melissa Young, entitled Shift Change. A year ago, journalist Laura Flanders wrote an article for Yes! Magazine, covering the success of the workers’ co-operative model in New York City. One woman, who struggled on $6.25 an hour as a house cleaner, saw her wages quadruple after joining a workers’ co-op. This year, mayor Bill de Blasio and the city council earmarked $1.2 million in support of worker-owned businesses.
It is readily apparent that the worker-owned business model offers a solid alternative to traditional capitalism, in which the sole objective is to squeeze maximum profits out of the company, regardless of the costs to the community, the environment, and even the planet. But just how does Bernie Sanders’ economic vision fit into all of this?
Last year, Sanders introduced two bills in the Senate. One bill provides funding through the US Department of Labor for employee ownership centers, modeled after a similar organization in his home state of Vermont. The primary purpose of such an organization would be to provide education and support on worker ownership of companies. The companion bill, co-sponsored by Sanders’ colleague, Senator Leahy, would establish a US Employee Bank to provide financing in order to assist workers in purchasing businesses.
On his senate website, Sanders says:
At a time when corporate America is outsourcing millions of decent-paying jobs overseas and with the economy continuing to struggle to create jobs that pay a livable wage, we need to expand economic models that help the middle-class…when employees have an ownership stake in their company, they will not ship their own jobs to China to increase their profits. They will be more productive. And, they will earn a better living.”
In case you have any doubt that an employee-owned business can be successful, consider Publix Super Markets. According to WikiPedia:
Publix is a private corporation that is wholly owned by present and past employees. It is currently ranked No. 67 on Fortune magazine’s list of 100 Best Companies to Work For 2015 and was ranked No. 8 on Forbes’ 2014 list of America’s Largest Private Companies and is the largest in Florida. The company’s 2014 sales totaled US$30.6 billion, with profits of $1.74 billion, ranking #104 on Fortune magazine’s Fortune 500 list of U.S. companies for 2014. Supermarket News ranked Publix No. 5 in the 2014 “Top 75 North American Food Retailers” based on fiscal year sales. Based on 2014 revenue, Publix is the thirteenth-largest US retailer and thirty-fifth in the world.