Job preservation through worker cooperatives: An overview of international experiences and strategies

In an era where employment has become the main preoccupation of citizens and governments alike, a job preserved is often as good as a job created. And contrary to what is often implied by Schumpeter’s famous metaphor on the “creative” aspect of enterprise destruction in a capitalist market economy, plant closures and job losses are not always redeemed by some positive outcome elsewhere. Sometimes they are simply a waste of human talent and a pure economic loss. As Stiglitz noted in his analysis of restructuring, it is much easier to destroy enterprises and jobs than to create them. The recent financial crises in several parts of the world have been followed by a wave of bankruptcies that has taken a heavy toll on workers, business owners and communities. Financial crises and the credit crunch they provoke often lead to the closure of enterprises that are viable and have economic potential, but lack liquidity. This situation has led workers in various countries to respond to these situations by pooling their resources to recapitalize their failing workplaces and operate them in a cooperative mode. Known as empresas recuperadas (‘recovered enterprises’) in the southern cone of South America, this type of response is not new, but has acquired a new relevance in the post-crisis context. A related phenomenon is that of enterprise closures caused by the retirement of business owners without succession. It is estimated that in the European Union this problem potentially concerns about 150,000 enterprises and some 600,000 workers every year (CECOP-CICOPA, 2013a). This explains why the French Government has recently voted new measures to improve and facilitate employees’ ability to buy their own workplaces in the cooperative mode and keep them in operation. Trade unions which are often on the frontline of the fight for job preservation, have traditionally responded to such situations in a piecemeal fashion, largely improvising in trying to find solutions. This is not surprising as this typically takes trade unions outside of their field of expertise. However, given the growing success of enterprise recovery in a number of countries, it is probably fair to say that many opportunities to save enterprises have been lost due to a lack of experience or knowledge and preparedness. Because of their central role in monitoring the economic situation at workplaces and in organising workers’ collective response, trade unions are uniquely placed to make a difference in a business recovery As the authors point out, this potential is all the greater when trade unions have access to the business and financial information of the enterprise and are able to achieve an honest dialogue with employers on the business situation. Information sharing and earnest discussions are not only the basis of trust and good industrial relations, but will often make the difference in periods of economic hardship. This book has been written to fill a gap in the literature. At a basic level, it is meant to inform of successful cases of job preservation through the creation of worker cooperatives in different regions of the world. More importantly, it is meant to elucidate the conditions of success for such attempts at recovery and to draw the important lessons learned by workers and their organizations in dealing with them. In this regard, the authors show that while there is a great deal more space than commonly thought for trade union action to support successful enterprise recovery through the transition to cooperatives, this has to be done with a great deal of care and rigour. It is our hope that this book will inspire workers and their organizations to explore new avenues and perspective in the area of trade union action for job preservation