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What Are Worker Co-ops?


Worker co-ops are businesses that are owned and democratically controlled by their members. The main purpose of a worker co-op is to provide employment and income for its employees through operating an enterprise that follows the Co-operative Principles and in which the employees democratically perform the following key enterprise activities: (a) divide all the labours to be performed, (b) determine what is to be produced, how it is to be produced, and where it is to be produced, and (c) decide on the use and distribution of the output or revenues (if output is monetized) therefrom. When new employees join the business, after a successful probationary period they are encouraged to apply for a membership. The worker co-op is, in principle, designed to provide benefits not just to the founding members but also to all future members.

To create their worker co-op, members combine their skills, interests and experiences to achieve mutual goals such as creating jobs for themselves, running a business, and increasing democracy in the workplace. The variety of enterprises operating as a worker co-op can be broad. Our goal is the development of a major part of our community’s economy organized as a worker co-op. The worker co-op idea can work for you if you have a marketable product or service and start up capital, we can help you develop plans for the organization and for growth.

Each member purchases a membership share, and has one vote no matter how many shares they own. Through the democratic governance of the enterprise, all employees have equal opportunity to affect the way the business is run and to offer input on the decisions affecting their everyday work lives. Because they develop the policies that determine the enterprise’s daily and long term operation, trust, communication and co-operation are vital to the worker co-op’s success. The enterprise’s assets are collectively owned and surplus earnings are allocated to the workers according to the bylaws and policies established by the workers.

Worker co-ops differ substantially from conventional businesses. Conventional businesses concentrate decision-making among major shareholders and the boards of directors they elect. This is a fundamental difference, as in conventional businesses, decisions are based upon maximizing profit rate and growth plus market share. Any profit sharing with the workers is at the owner’s sole discretion.

In summary, worker co-ops are a radical break from conventional businesses. The worker co-op’s primary goal in operating a business is to increase democracy in the workplace. The goal is for workers to have a democratic say in what the enterprise produces, how it is produced, where it is to be produced, and for each to receive an equitable share of the profits.



Originally published July 21, 2020


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