How Economic Democracy Impacts Workers, Firms, and Communities

Year: 
2021
Author(s): 
Laura Hanson Schlachter, Olga Prushinskaya
Affiliated Organization: 
Democracy at Work Institute
Description: 
 

How Economic Democracy Impacts Workers, Firms, and Communities  presents findings from a national survey of 1,147 workers in 82 worker cooperatives and follow-up interviews with 15 participants—the first national survey of its kind. This novel data, collected in 2017, allows us to explore the impact of workplace democracy on individuals, firms, and communities across the United States. It also provides important opportunities for future research about how worker cooperatives can promote resilience and racial equity in this moment.

As the COVID-19 pandemic drags on, significant challenges persist for small businesses, workers employed in the service and care sectors, and contract, freelance and gig workers who cannot access unemployment benefits. The brunt of the economic losses have been born by Black and brown business owners, low-wage workers, and entrepreneurs of necessity who have been locked out of both good jobs and business ownership opportunities. The stresses wrought by the pandemic, however, simply cast into high relief a much longer arc of deepening racial and economic inequality, stagnant wages, and concentration of wealth in the U.S. over the past several decades. The continued division and dysfunction of American democracy in 2021 is the outcome of concerted efforts to disenfranchise voters and disempower communities over the past several decades. is a best-of collection of democratic practices used by worker cooperative managers and taught by some of the leading consultants to democratic companies. The guide has been created to fill the void of materials available that take readers beyond the start-up or transition phase of democratic business operation to what actually needs to be done to ensure workplace democracy takes hold.  The guide is organized as a framework covering power, information, people, and money. Within each of these sections are tools, descriptions of activities, and stories from cooperatives to inspire and help you put ideas into action.

In this moment, the proposition of worker cooperatives—that working people can together own, control, and benefit form their own small businesses—offers hopeful possibilities. Worker cooperatives can be used to save small businesses whose owners are retiring or closing, create livelihoods for those with barriers to work, pool capital among would-be entrepreneurs, and raise standards and firm competitiveness in industries where a human-centered workplace improves both the job and the service delivery itself. In the process, cooperative business ownership can build the skills, capacity, and voice of people who otherwise may not have substantial opportunities to participate in either decisions or profits.

This paper is concerned in part with whether and how worker cooperatives fulfill this promise for their worker-owners. Our findings suggest that they do. Our key findings include:

  1. Individuals benefit materially and psychologically from workplace democracy
  2. Workplace democracy benefits firms in terms of recruitment, retention, and reduced shirking
  3. Worker cooperatives are woven into the civic fabric of their communities

Interested in learning about this study's methodology or applying for access to the data? Click here.

 

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Curated Tools: 
Resources for Coop Developers
Resources for Communities