Is worker ownership the way to eliminate workplace inequalities?
While organizational scholars here and elsewhere have long focused on the range of mechanisms that create and maintain a variety of social inequalities within workplaces, the context of capitalism and investor-owned firms minimizing worker voice and power is generally treated as a given.
However, an alternative form of enterprise exists: worker cooperatives, businesses owned and democratically controlled by their workers. Although worker cooperatives are still a small proportion of U.S. enterprises, an estimated 4,700 workers in as many as 1000 worker cooperatives produced over US$238 million in revenue in 2020. Indeed, as part of the anti-inequality activism that arose from the Great Recession, worker cooperative numbers have essentially doubled in the last decade across multiple industrial sectors, increasingly with the support of unions and local municipalities, and have shown great resilience during the pandemic years. Under conditions of worker ownership and control, we might assume resistance to and disruption of the kinds of class, ethnoracial, and gender inequalities that have been central to these social movements and their organizations.
Worker cooperatives exist to provide economic benefit by distributing business profits to their worker members based on each worker’s labor contribution to the whole, and to distribute democratic control on a one person/one vote basis regardless of profit distribution or any other economic measure.
In both of these respects they differ from the far more common ESOP, or employee stock ownership plan, which creates retirement accounts rather than annual profit-sharing, and typically distributes voting rights based on the proportion of stock held. Worker cooperatives are also different from consumer cooperatives like REI or the local food co-op, where voting rights and profit distributions go to customer members based on spending.
In my recent book, however, I propose that worker ownership is perhaps necessary but not nearly sufficient to address or remedy social inequalities within organizations: while worker cooperatives are certainly capable of greater equity and inclusion than non-worker-owned enterprises, they also have a history of gender, ethnoracial, and class inequalities and exclusions dating back to the labor republican era of the 1880s and continuing into the self-help Depression-era as well as the countercultural collectives of the 1970s and 1980s.
Through comparative ethnographic research conducted over fifteen years at two well-established, mid-sized worker cooperatives in Northern California, I observed two other factors besides worker ownership and control that shaped whether, how, and what kinds of inequality each cooperative was willing and able to address: bureaucratic variation and worker identity.
When scholars attribute inequalities to bureaucracies, anti-bureaucratic organizations, and post-bureaucratic organizations, it is the Weberian conception of bureaucracy that serves as a common model: the consolidation of specialized and expertise-based positions into a hierarchy of offices and authority, which is administered on the basis of universally applied rules and policies encoded in a range of documents, and define a life-long organizational career.
While Weber clearly identified a new form of rule, critically distinguishing the formalized rationalization of this new kind of organization from its more value-oriented predecessors, it is not a stretch to say that his model was as historically bound to his time as any other. For instance, although few people have a life-long career in a single contemporary corporation, no one would claim that contemporary corporations aren’t bureaucracies.
The two cooperatives I studied were a 100+-worker bakery with a managerial hierarchy and a 200+-worker grocery with a hybrid mix of representative and participatory democratic structures. I came to understand that the grocery members’ strong formalization of decentralization of authority was not anti-bureaucratic or even post-bureaucratic, but rather a contemporary variation of the Weberian type: a “participatory bureaucracy.” Although the bakery and grocery had emerged at roughly the same time and place from the same 1970s counterculture and had similarly grown to become primarily working-class and ethnoracially diverse organizations, the bakery’s turn to managerial bureaucracy had produced ethnoracially segregated and gender-exclusionary working conditions, while the grocery’s development of participatory bureaucracy generated a surprising degree of ethnoracial, gender, and class egalitarianism.
What I found was that when direct democratic management and governance was distributed through densely formalized practices, the participatory bureaucracy not only facilitated relationships with other bureaucratic organizations like vendors or the state as well as managerial bureaucracies did, but also provided better protected socially marginalized members and neutralized many of the advantages of the socially privileged than did either managerial bureaucracies or anti-bureaucratic organizations.
Variation in bureaucracy between organizations with such similar histories and populations did not make sense, however, without understanding the difference in how each organization produced a “worker identity,” or the organizationally specific and consequential expression of a particular self through individual and collective narratives and practices. It is because “identity” instantly, messily, and often obliquely connects processual, discursive, and regulatory ways of perceiving oneself in relation to others that it becomes such a powerful aspect of organizational inequality regimes, or the interlinkages between intersectional social and organizational inequalities. At the bakery and the grocery, worker identities shaped the response of each cooperative to inequality.
Although the memberships of the two worker cooperatives were demographically very similar, the discursive gap between the bakery’s monist class worker identity and the grocery’s pluralist intersectional worker identity generated disparate decisions about organizational polices regarding pay, scheduling, or the allocation of authority to managers or elected committees. In turn, these policies affected who was included or excluded, what kinds of jobs were available to what kinds of people, and how resources were assigned to different kinds of work.
A reciprocal relationship emerged between each cooperative’s worker identity and its bureaucratic form: While the bakery’s monist worker identity made its working-class managers seem representative of bakery workers as a whole, obscuring gender and ethnoracial inequalities, the grocery’s pluralist worker identity legitimated and even seemed to demand a wide distribution of management and governance to allow for participation across its valued worker diversity.
While I argue that worker ownership is not sufficient to reduce inequality, it provides conditions that allow workers to experiment with both workplace empowerment and conceptions of what it means to be a worker. In turn, these affect how workplaces reproduce or reduce categorial inequalities by defining—expanding or narrowing—who has a legitimate organizational voice and producing organizational apparatuses through which those voices can authorize actions.
However, it is possible that worker ownership is not even a necessary condition. Learning from worker cooperatives, nonprofits and B-corporations that share a social justice framework can also take steps to implement participatory bureaucracy and pluralistic worker identities. As worker cooperatives make their way back into the labor movement that birthed them in the U.S., their insights can inform union demands in collective bargaining. That is, while worker ownership may not be necessary for a particular organization’s broader and deeper empowerment of its workers, it has certainly been necessary to understanding what workers need.
Joan S. M. Meyers. Working Democracies: Managing Inequality in Worker Cooperatives. Cornell University Press 2022.