Why Can’t American Labor Build
Its Own Cooperative ‘Mondragon’?
By Harry Kelber
If you are looking for a model where workers in a company are also the owners of what they produce, the finest example is the Mondragon Corporation, a federation of worker cooperatives based in the Basque region of northern Spain.
Founded in 1956 in the Basque town of Mondragon, the cooperative, now the largest in the world, has developed a new way to organize a company’s production that is based on workers’ rights and needs. It now has 40 enterprises employing 100,000 worker/owners, manufacturing a large variety of products, from washing machines to microchips, from world-class bicycles to bullet trains, to building the titanium-covered Guggenheim Museum in Bilboa, the Basque Country’s largest city.
The Mondragon cooperatives have developed a humanist concept of business, and a belief in worker participation and solidarity. There is no discrimination of any kind toward workers who are or become members. In the General Assembly, all workers take part in policy decision, with each person having one vote.
There are differences in the wage ratios between the worker-owners who do executive work and those who work in the field or factory and earn a minimum wage. These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1. That is, the general manager of an average Mondragon cooperative earns 5 times as much as the theoretical minimum wage paid in his/her cooperative. Mondragon worker-owners at the lower wage levels earn an average 13% higher wages than workers in similar businesses outside.
The Many Advantages of a Worker/Owner Enterprise
There is no question that we would be better off, employed as a worker/owner than today, when a boss has the right to hire and fire us, and controls our lives from the minute we step into his workplace until we leave it. Why shouldn’t we have a fair share of the profits that he collects by compelling us to work harder and longer, so he can be more competitive against his rivals?
Right now, we have boards of directors making decisions about how many people to lay off (in round numbers) to lower their labor costs. As worker/owners, we would be the ones to decide whether layoffs were necessary and consider alternative measure if they were. We could improve health and safety standards in the workplace and make other changes for our benefit.
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American unions have the money and can raise additional capital if they can become convinced that producer cooperatives are one of the best ways to promote their growth and influence. We have a lot more people and resources than did the residents of Mondragon who had the courage and imagination to develop their “miracle.”
We can select states to establish producer cooperates and train managers to perform the duties of business executives. If done properly and over time, we can establish economic models that can serve workers and consumers far better than our current corporations. The cooperatives can advance new technologies, based on what is good and useful, besides their profit value
It is clear that American workers and their unions are in deep trouble, and their labor leaders have not come up with solutions to their problems. I an suggesting that the Mondragon model can be one part of the answers we are looking for. Has anyone anything better to propose?—Harry Kelber
