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{{short description|Cooperative that is owned and self-managed by its workers}}
{{Redirect|Labour cooperative|the British electoral alliance|Labour and Co-operative Party}}
{{Use dmy dates|date=February 2023}}

A '''worker cooperative''' is a [[cooperative]] owned and [[Workers' self-management|self-managed by its workers]]. This control may mean a [[Company|firm]] where every worker-owner participates in [[decision-making]] in a democratic fashion, or it may refer to one in which management is elected by every worker-owner who each have one vote. Worker cooperatives may also be referred to as labor-managed firms.

==History==
[[File:New harmony vision.jpg|thumb|250px|Model of [[Robert Owen]]'s visionary project for a cooperative settlement ([[Owenism|Owenites]] fired bricks to build it, but construction never took place)]]
Worker cooperatives rose to prominence during the [[Industrial Revolution]] as part of the [[labour movement]]. As employment moved to industrial areas and job sectors declined, workers began organizing and controlling businesses for themselves. Worker cooperatives were originally sparked by "critical reaction to industrial capitalism and the excesses of the industrial revolution," with the first worker owned and managed firm first appearing in England in 1760.<ref name="Adams" /> Some worker cooperatives were designed to "cope with the evils of unbridled capitalism and the insecurities of wage labor".<ref name="Adams"/>

The philosophy that underpinned the cooperative movement stemmed from the [[socialism|socialist]] writings of thinkers including [[Robert Owen]] and [[Charles Fourier]]. Robert Owen, considered by many as the father of the cooperative movement, made his fortune in the cotton trade but believed in putting his workers in a good environment with access to education for themselves and their children. These ideas were put into effect successfully in the [[cotton mill]]s of [[New Lanark]], [[Scotland]]. It was here that the first co-operative store was opened. Spurred on by the success of this, he had the idea of forming "villages of co-operation" where workers would drag themselves out of poverty by growing their own food, making their own clothes and ultimately becoming self-governing. He tried to form such communities in [[Orbiston, Scotland|Orbiston]] in Scotland and in [[New Harmony, Indiana]] in the [[United States|United States of America]], but both communities failed.<ref name="Garnett">{{Cite book |first=Ronald |last=Garnett |title=Co-operation and the Owenite Socialist Communities in Britain, 1825–45 |date=1972 |publisher=Manchester University Press}}</ref><ref>Roger D. Branigin, "Robert Owen's New Harmony: An American Heritage," in ''Robert Owen's American Legacy'', p. 20.</ref><ref>Forestville Commonwealth was listed on the [[National Register of Historic Places]] in 1974. See {{NRISref|2009a}}</ref>

Similar early experiments were made in the early 19th century and by 1830 there were several hundred co-operatives.<ref>{{cite web|url=http://www.cottontimes.co.uk/co-op02.html|work=Cotton Times, understanding the industrial revolution|title=Social strife: The birth of the co-op|page=2|author=Doug Peacock|access-date=2008-06-26|url-status=dead|archive-url=https://web.archive.org/web/20080725065418/http://www.cottontimes.co.uk/co-op02.html|archive-date=25 July 2008}}</ref> [[William King (doctor)|Dr William King]] made Owen's ideas more workable and practical. He believed in starting small and realized that the [[working class]]es would need to set up co-operatives for themselves, so he saw his role as one of instruction. He founded a monthly periodical called ''The Co-operator'',<ref>{{cite web|url=https://books.google.com/books?id=4mATAAAAQAAJ|title=The Co-operator|date=14 May 2018|via=Google Books}}</ref> the first edition of which appeared on 1 May 1828. This gave a mixture of co-operative philosophy and practical advice about running a shop using cooperative principles.

===Modern movement===
[[File:Rochdale Society of Equitable Pioneers 1865 photograph.jpg|thumb|350x350px|The [[Rochdale Society of Equitable Pioneers]] was established in 1844 and defined the modern cooperative movement]]
The first successful cooperative organization was the consumer-owned [[Rochdale Society of Equitable Pioneers]], established in England in 1844. The Rochdale Pioneers established the '[[Rochdale Principles]]' on which they ran their cooperative. This became the basis for the development and growth of the modern cooperative movement.<ref>{{Cite news|url=http://www.cooperativegrocer.coop/articles/index.php?id=158|title=Cooperative Principles Then and Now|author=David Thompson|date=July<!-- –Aug --> 1994|access-date=2008-06-26|work=Co-operative Grocer|publisher=[[National Cooperative Grocers Association]], Minneapolis|url-status=dead|archive-url=https://web.archive.org/web/20071010012855/http://cooperativegrocer.coop/articles/index.php?id=158|archive-date=10 October 2007}}</ref> As the mechanization of the Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food items they could not otherwise afford.<ref>{{cite web|last=Fairbairn|first=Brett|title=The Meaning of Rochdale|url=http://usaskstudies.coop/documents/occasional-papers/Meaning%20of%20Rochdale.pdf|access-date=23 November 2020|archive-date=1 March 2017|archive-url=https://web.archive.org/web/20170301073250/http://usaskstudies.coop/documents/occasional-papers/Meaning%20of%20Rochdale.pdf|url-status=dead}}</ref>

With lessons from prior failed attempts at co-operation in mind, they designed the now famous [[Rochdale Principles]], and over a period of four months, they struggled to pool one [[pound sterling]] per person for a total of 28 pounds of capital. On 21 December 1844, they opened their store with a very meager selection of butter, sugar, flour, oatmeal, and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods.<ref>{{cite web|title=Philosophy {{!}} Department of Agriculture|url=https://www.agriculture.gov.kn/philosophy|access-date=2020-11-23|language=en-US}}</ref><ref>{{cite web|title=VIPA Rochdale Pioneers Museum|url=http://vipauk.org/enter/muse/nw/nw42.html|access-date=2020-11-23|website=vipauk.org}}</ref><ref>{{cite web|title=Our history {{!}} ICA|url=https://www.ica.coop/en/cooperatives/history-cooperative-movement|access-date=2020-11-23|website=ica.coop}}</ref>

By 1880 some 200 cooperatives had been started in Britain, but they were generally short-lived and by 1975 there were only 19 remaining.<ref>{{cite journal |last1=Podivinsky |first1=Jan M. |last2=Stewart |first2=Geoff |title=Why is labour-managed firm entry so rare? |journal=Journal of Economic Behavior & Organization |date=May 2007 |volume=63 |issue=1 |pages=177–192 |doi=10.1016/j.jebo.2006.02.001 }}</ref>

The International organization representing worker cooperatives is [[CICOPA]]. CICOPA has two regional organizations: CECOP – CICOPA Europe and CICOPA Americas.

=== Today ===
[[File:Newcastlebridge.jpg|thumb|300px|The old Co-operative building behind the [[Gateshead Millennium Bridge]] in [[Newcastle upon Tyne]]]]
When the current cooperative movement resurfaced in the 1960s, it developed mostly on a new system of "collective ownership" where par value shares were issued as symbols of egalitarian voting rights. Typically, a member may only own one share to maintain the egalitarian ethos. Once brought in as a member and after a period of time on probation usually so the new candidate can be evaluated, they would be given the power to manage the coop without "ownership" in the traditional sense. In the UK, this system is known as [[common ownership]].<ref>{{cite book |last1=Mellor |first1=Mary |last2=Hannah |first2=Janet |last3=Stirling |first3=John |title=Worker Cooperatives in Theory and Practice |date=1988 |publisher=Open University Press |isbn=978-0-335-15862-1 }}{{pn|date=March 2025}}</ref>

In Britain, this type of cooperative was traditionally known as a ''producer cooperative''; and while it was overshadowed by the consumer and agricultural types, it also made up a small section of its own within the national apex body, the Cooperative Union. The 'new wave' of worker cooperatives that took off in Britain in the mid-1970s joined the [[Industrial Common Ownership Movement]] (ICOM) as a separate federation. Buoyed up by the alternative and ecological movements and by the political drive to create jobs, the sector peaked at around 2,000 enterprises. {{Citation needed|date=January 2021}} However, the growth rate slowed, the sector contracted, and in 2001 ICOM merged with the Co-operative Union (which was the federal body for consumer cooperatives) to create [[Co-operatives UK]], thus reunifying the cooperative sector.<ref>{{Cite web|url=http://archiveshub.jisc.ac.uk/data/gb1499-rsp/rsp/2|title=ICOM (Industrial Common Ownership Movement) – Papers of Roger Sawtell - Archives Hub|website=archiveshub.jisc.ac.uk}}</ref>

Since 2006, Co-operatives UK's Worker Cooperative Council wrote and updated a worker co-operative code, the booklet that "sets out what anyone should expect and should work together to achieve, as a member of a worker co-operative".<ref>[https://www.uk.coop/sites/default/files/2020-10/worker_co-operative_code_2nd_edition_0_0.pdf The worker co-operative code, Co-operatives UK, 2012]</ref>

In 2018, Google announced a $1 million grant to a [[platform cooperative]] development kit in collaboration with 5 pilot cooperatives, which are all worker-owned.<ref>{{cite web|url=http://philanthropynewsdigest.org/news/google.org-awards-1-million-for-jobs-cooperative-consortium|title=Google.org Awards $1 Million for Jobs Cooperative Consortium|last=Candid|website=Philanthropy News Digest (PND)|language=en|access-date=2019-11-17}}</ref>

== Cooperatives versus traditional firms ==
The evidence on the productivity between cooperatives and traditional firms are mixed, depending on location and sector. Worker cooperatives are generally less competitive and less profitable than IOFs (Investor-Owned Firms), leading to reduced growth rates compared to IOFs.<ref>{{cite journal |last1=Mikami |first1=Kazuhiko |title=Are cooperative firms a less competitive form of business? Production efficiency and financial viability of cooperative firms with tradable membership shares |journal=Economic Systems |date=September 2018 |volume=42 |issue=3 |pages=487–502 |doi=10.1016/j.ecosys.2017.11.005 }}</ref> In agriculture, coops tend to be more productive.<ref>{{cite journal |last1=Meliá-Martí |first1=Elena |last2=Mozas-Moral |first2=Adoración |last3=Bernal-Jurado |first3=Enrique |last4=Fernández-Uclés |first4=Domingo |title=Global efficiency and profitability: Cooperatives as social innovation agents vs. Joint stock companies in the agri-food sector |journal=Journal of Innovation & Knowledge |date=July 2024 |volume=9 |issue=3 |pages=100537 |doi=10.1016/j.jik.2024.100537 |hdl=10251/210322 |hdl-access=free }}</ref> In Portugal, they may be significantly less or as, but never more productive in any industry than IOFs.<ref name="Monteiro Straume COOPERATIVES MORE PRODUCTIVE">{{cite journal |last1=Monteiro |first1=Natália P. |last2=Straume |first2=Odd Rune |title=Are Cooperatives More Productive Than Investor-Owned Firms? Cross-Industry Evidence from Portugal |journal=Annals of Public and Cooperative Economics |date=June 2018 |volume=89 |issue=2 |pages=377–414 |doi=10.1111/apce.12201 |hdl=1822/65674 |hdl-access=free }}</ref> Coops tend to be risk averse, resulting in coops being more sustainable, and much more resilient against recessions but less profitable and less innovative. Generally speaking, coops are less flexible, preferring to adjust wages rather than change the number of workers they employ. This results in coops having 14% lower salaries than capitalist firms, more volatility in wages and less volatility in employment. Furthermore, the co-op wage system is more of an egalitarian one, where wages are sometimes, although not always, uniform. This system is less competitive, which can drive away talented workers who don’t receive as much compensation as they otherwise could for their performance. A study by Faleye et al concluded that: “[co-ops] deviate more from value maximization, invest less in long-term assets, take fewer risks, grow more slowly, create fewer new jobs, and exhibit lower labor and total factor productivity.” Evidence comparing co-op worker satisfaction to firm worker satisfaction is somewhat mixed, but tends to favor co-ops.<ref name="The Economics Review">{{cite web |title=Co-ops vs. Firms: Different Sides of the Same Market Coin |publisher=The Economics Review |work=Student Organization, UC Berkeley |date=2025 |url=https://econreview.studentorg.berkeley.edu/co-ops-vs-firms-different-sides-of-the-same-market-coin/ |access-date=2025-03-06}}</ref>

== Research ==

=== Longevity and resilience ===
According to an analysis of all businesses in Uruguay between 1997 and 2009, worker cooperatives have a 29% smaller chance of closure after controlling for variables such as industry.<ref>{{cite journal |last1=Burdín |first1=Gabriel |title=Are Worker-Managed Firms More Likely to Fail Than Conventional Enterprises? Evidence from Uruguay |journal=ILR Review |date=January 2014 |volume=67 |issue=1 |pages=202–238 |doi=10.1177/001979391406700108 }}</ref> In Italy, worker owned cooperatives that have been created by workers buying a business when it is facing a closure or put up to sale have a 3-year survival rate of 87%, compared to 48% of all Italian businesses.<ref>{{cite web|last=Voinea|first=Anca|date=2015|title=The path to worker buyouts: Does the UK need its own 'Marcora Law'?|url=https://www.thenews.coop/97306/sector/retail/path-worker-buyouts-uk-need-marcora-law/|website=Coop News}}</ref>{{Unreliable source?|certain=y|reason=The source does not have this data nor does it cite this data from a peer-reviewed study.|date=November 2020}} A 2012 study of Spanish and French worker cooperatives found that they "have been more resilient than conventional enterprises during the economic crisis."<ref name="Co-opLaw">{{cite web|title=Worker Cooperatives Performance and Success Factors|url=https://www.co-oplaw.org/special-topics/worker-cooperatives-performance-and-success-factors/|access-date=2019-11-15|website=Co-opLaw.org|date=22 October 2014|language=en-US|archive-date=18 November 2022|archive-url=https://web.archive.org/web/20221118115602/https://www.co-oplaw.org/special-topics/worker-cooperatives-performance-and-success-factors/|url-status=dead}}</ref> In France, the three year survival rate of worker cooperatives is 80–90%, compared to the 66% overall survival rate for all businesses.<ref>{{cite book |doi=10.1108/S0885-3339(2013)0000014005 |chapter=The Relative Survival of Worker Cooperatives and Barriers to Their Creation |title=Sharing Ownership, Profits, and Decision-Making in the 21st Century |series=Advances in the Economic Analysis of Participatory & Labor-Managed Firms |date=2013 |last1=Olsen |first1=Erik K. |volume=14 |pages=83–107 |isbn=978-1-78190-750-4 }}</ref> During the 2008 economic crisis, the number of workers in worker owned cooperatives in France increased by 4.2%, while employment in other businesses decreased by 0.7%.<ref>{{cite web|date=2012|title=The resilience of the cooperative model|url=https://www.ess-europe.eu/sites/default/files/report_cecop_2012_en_web.pdf|url-status=live|archive-url=https://web.archive.org/web/20200718172310/https://www.ess-europe.eu/sites/default/files/report_cecop_2012_en_web.pdf|archive-date=2020-07-18|website=The International Organisation of Industrial and Services Cooperatives}} [https://archive.org/details/report_cecop_2012_en_web Alt URL]</ref> More than three quarters of UK co-op start-ups (76%) are still flourishing after the difficult first five years, however, other business forms are far less likely to survive, with only 42% of all new UK companies making it through to the end of year five.<ref>{{Cite web |date=2023-01-06 |title=Co-op Economy 2020 |url=https://www.uk.coop/sites/default/files/2021-06/Co-op_Economy_2020.pdf |access-date=2023-04-14 |archive-url=https://web.archive.org/web/20230106222442/https://www.uk.coop/sites/default/files/2021-06/Co-op_Economy_2020.pdf |archive-date=6 January 2023 |url-status=live |lang=en}}</ref><ref>{{cite web|url=https://www.uk.coop/sites/default/files/2020-09/Co-op_Economy_2020_0.pdf|access-date=2023-09-22|title=Co-op economy 2020 – A report on the UK's co-operative sector|archive-date=22 February 2023|archive-url=https://web.archive.org/web/20230222065556/https://www.uk.coop/sites/default/files/2020-09/Co-op_Economy_2020_0.pdf|url-status=dead}}</ref>

=== Pay and employment stability ===
A 2006 study found that wages on co-ops pay in Italy were 15 to 16 percent lower than those that capitalist firms paid on average, and were more volatile, while employment was more stable. After controlling for variables, such as schooling, age, gender, occupation, industry, location, firm-size, user cost of capital, fixed costs, and deviations in its real sales, this changed to 14 percent. The authors suggest this might be due to worker cooperatives being more likely than capitalist firms to cut wages instead of laying off employees during periods of economic difficulty, or because co-op
workers may be willing to accept lower wages than workers in capitalist firms.<ref name="pencavel2006">{{cite journal |last1=Pencavel |first1=John |last2=Pistaferri |first2=Luigi |last3=Schivardi |first3=Fabiano |title=Wages, Employment, and Capital in Capitalist and Worker-Owned Firms |journal=ILR Review |date=October 2006 |volume=60 |issue=1 |pages=23–44 |doi=10.1177/001979390606000102 |url=https://econpapers.repec.org/RePEc:iza:izadps:dp2188 }}</ref> A study looking at all firms in Uruguay concluded that when controlling for variables such as industry, firm size, gender, age and tenure, workers employed in a worker-managed firm earn 3 percent higher wages compared with similar workers employed in the conventional firms. However, this wage premium declines significantly with increasing pay and becomes negative for top earners.<ref>{{cite journal |last1=Burdín |first1=Gabriel |title=Equality Under Threat by the Talented: Evidence from Worker-Managed Firms |journal=The Economic Journal |date=August 2016 |volume=126 |issue=594 |pages=1372–1403 |doi=10.1111/ecoj.12272 |hdl=11365/1277350 |url=https://eprints.whiterose.ac.uk/92229/2/Equality%20Under%20Threat%20EJ_2015.pdf }}</ref> According to research by Virginie Pérotin, which looked at two decades worth of international data, the tendency for greater wage flexibility and employment stability helps explain why some research observes higher and others lower pay in worker cooperatives relative to conventional businesses.<ref name="Pérotin2016">{{cite report |last1=Pérotin |first1=Virginie |title=What do we really know about worker co‑operatives? |date=2016 |publisher=Co-operatives UK |url=https://www.uk.coop/resources/what-do-we-really-know-about-worker-co-operatives }}{{pn|date=March 2025}}</ref> A study by ''The Democracy Collaborative'' found that in the US, worker cooperatives can increase worker incomes by 70 to 80 percent.<ref>{{cite web|url=https://project-equity.org/wp-content/uploads/2023/06/Worker-Cooperatives-Pathways-to-Scale.pdf|title=Worker Cooperatives: Pathways to Scale|year=2014}}</ref>

=== Pay inequality ===

In the [[Mondragon Corporation]], the world's largest worker cooperative, the pay ratio between the lowest and the highest earner was 1:9 in 2018. The ratio is decided by a democratic vote by the worker-members.<ref>{{cite web|url=https://www.uk.coop/newsroom/new-report-highlights-lessons-worlds-largest-worker-co-op|title=New report highlights lessons from Mondragon – the world's largest worker co-op|date=2019|website=uk.coop/|access-date=25 October 2019|archive-date=12 November 2019|archive-url=https://web.archive.org/web/20191112021528/https://www.uk.coop/newsroom/new-report-highlights-lessons-worlds-largest-worker-co-op|url-status=dead}}</ref>

In France, the pay ratio between the highest and lowest paid 10% of the employees is 14% lower in worker cooperatives than in otherwise similar conventional firms.<ref>{{cite journal |last1=Magne |first1=Nathalie |title=Wage inequality in workers' cooperatives and conventional firms |journal=European Journal of Comparative Economics |date=2017 |volume=14 |issue=2 |pages=303–329 |id={{ProQuest|1994842463}} |doi=10.25428/1824-2979/201702-303-329 }}</ref>

=== Productivity ===

According to Virginie Pérotin's research which looked at two decades worth of international data, worker cooperatives are more productive than conventional businesses.<ref name="Pérotin2016" /> Another 1987 study of worker cooperatives in Italy, the UK, and France found "positive" relationships with productivity. It also found that worker cooperatives do not become less productive as they get larger. A 1995 study of worker cooperatives in the timber industry in Washington, USA found that "co-ops are more efficient than the principal conventional firms by between 6 and 14 percent".<ref>{{Cite journal|last=Pencavel|first=John|date=1995|title=Participation and Productivity: A Comparison of Worker Cooperatives and Conventional Firms in the Plywood Industry|url=https://www.brookings.edu/wp-content/uploads/1995/01/1995_bpeamicro_craig.pdf|journal=Brookings Papers on Economic Activity}}</ref>

=== Worker satisfaction, trust, health and commitment ===
According to a study drawing on a questionnaire from the population of the Italian province of [[Trento]], worker cooperatives are the only form of enterprise that fosters social trust between employees.<ref>{{cite journal |last1=Sabatini |first1=Fabio |last2=Modena |first2=Francesca |last3=Tortia |first3=Ermanno |title=Do cooperative enterprises create social trust? |journal=Small Business Economics |date=March 2014 |volume=42 |issue=3 |pages=621–641 |doi=10.1007/s11187-013-9494-8 |url=http://www.eeri.eu/documents/wp/EERI_RP_2012_10.pdf }}</ref> A survey conducted in Seoul suggests that in conventional firms, employees become less committed to their job as their work becomes more demanding; however, this was not the case in worker cooperatives.<ref>{{Cite journal|last=Park|first=Rhokeun|date=2018|title=Responses to job demands: moderating role of worker cooperatives|journal=Employee Relations|volume=40|issue=2|pages=346–361|doi=10.1108/ER-06-2017-0137}}</ref> In the US, home health aides in worker cooperatives were significantly more satisfied with their jobs than in other agencies.<ref name="Berry Effects of Cooperative Membership">{{cite book |doi=10.1108/S0885-3339(2013)0000014002 |chapter=Effects of Cooperative Membership and Participation in Decision Making on Job Satisfaction of Home Health Aides |title=Sharing Ownership, Profits, and Decision-Making in the 21st Century |series=Advances in the Economic Analysis of Participatory & Labor-Managed Firms |date=2013 |last1=Berry |first1=Daphne P. |volume=14 |pages=3–25 |isbn=978-1-78190-750-4 }}</ref> A study from 2013 about home aid workers found that "Home health aides at the worker-owned, participative decision-making organization were significantly more satisfied with their jobs than those at other agencies."<ref name="Berry Effects of Cooperative Membership"/> One 1995 study from the US also indicates that "employees who embrace an increased influence and participation in workplace decisions also reported greater job satisfaction"<ref>{{cite web|url=https://www.thenews.coop/39464/topic/democracy/co-operatives-make-happy-place-work/|title=Co-operatives make for a happy place to work|date=20 March 2013}}</ref> and a 2011 study in France found that worker-owned businesses "had a positive effect on workers' job satisfaction."<ref>{{cite journal |last1=Castel |first1=Davy |last2=Lemoine |first2=Claude |last3=Durand-Delvigne |first3=Annick |title=Working in Cooperatives and Social Economy: Effects on Job Satisfaction and the Meaning of Work |journal=Perspectives interdisciplinaires sur le travail et la santé |date=November 2011 |issue=13–2 |doi=10.4000/pistes.2635 |doi-access=free }}</ref> One 2019 study indicates that "the impact on the happiness of workers is generally positive".<ref>{{cite journal |last1=Kaswan |first1=Mark J. |title=Happiness theory and worker cooperatives: A critique of the alignment thesis |journal=Journal of Labor and Society |date=September 2019 |volume=22 |issue=3 |pages=637–660 |doi=10.1111/wusa.12442 }}</ref>

=== Environment ===
A 1995 analysis published in [[Ecological Economics (journal)|Ecological Economics]] suggests that "cooperatives will tend to use natural resource inputs more efficiently and will be less growth oriented than corporations."<ref>{{cite journal |last1=Booth |first1=Douglas E. |title=Economic democracy as an environmental measure |journal=Ecological Economics |date=March 1995 |volume=12 |issue=3 |pages=225–236 |doi=10.1016/0921-8009(94)00046-X |bibcode=1995EcoEc..12..225B }}</ref>

==Definition==
{{more citations needed section|date=February 2023}}

Many definitions exist as to what qualifies as a workers' cooperative. [[CICOPA]], the International Organisation of Industrial, Artisanal and Service Producers' Cooperatives, gives an 8-page definition in their World Declaration on Workers' Cooperatives, which was approved by the [[International Co-operative Alliance]] General Assembly in September 2005. Below is the section on the basic characteristics of workers' cooperatives:

# They have the objective of creating and maintaining sustainable jobs and generating wealth, to improve the quality of life of the worker-members, dignify human work, allow workers' democratic self-management and promote community and local development.
# The free and voluntary membership of their members, in order to contribute with their personal work and economic resources, is conditioned by the existence of workplaces.
# As a general rule, work shall be carried out by the members. This implies that the majority of the workers in a given worker cooperative enterprise are members and vice versa.
# The worker-members' relation with their cooperative shall be considered as different from that of conventional wage-based labor and to that of autonomous individual work.
# Their internal regulation is formally defined by regimes that are democratically agreed upon and accepted by the worker-members.
# They shall be autonomous and independent, before the State and third parties, in their labor relations and management, and in the usage and management of the means of production.<ref name="ICA">[http://www.cooperatives-uk.coop/live/images/cme_resources/Public/governance/Worker%20co-op%20governance/ICA.pdf ICA (2005) World Declaration on Worker Cooperatives, Approved by the ICA General Assembly in Cartagena, Colombia, 23 September 2005] {{webarchive|url=https://web.archive.org/web/20090325182120/http://www.cooperatives-uk.coop/live/images/cme_resources/Public/governance/Worker%20co-op%20governance/ICA.pdf|date=25 March 2009}}.</ref>

Even though there is no universally accepted definition of a workers' cooperative, they can be considered to be businesses that make a product or offer a service to sell for profit where the workers are members or worker-owners. Worker-owners work in the business, govern it and manage it. Unlike with conventional firms, ownership and decision-making power of a worker cooperative should be vested solely with the worker-owners and ultimate authority rests with the worker-owners as a whole. Worker-owners control the resources of the cooperative and the work process, such as wages or hours of work.<ref name="Adams">{{cite book |last1=Adams |first1=Frank T. |last2=Hansen |first2=Gary B. |title=Putting Democracy to Work: A Practical Guide for Starting and Managing Worker-owned Businesses |date=1992 |publisher=Berrett-Koehler |isbn=978-1-881052-09-8 |page=11 }}</ref>

As mentioned above, the majority—if not all—of the workers in a given worker cooperative enterprise are worker-owners, although some casual or wage workers may be employed with whom profits and decision making are not necessarily shared equally. Workers also often undergo a trial or screening period (such as three or six months) before being allowed to have full voting rights.<ref name="Adams" />

Participation is based on one vote per worker-owner, regardless of the number of shares or equity owned by each worker-owner. Voting rights are not tied to investment or patronage in the workers' co-operative, and only worker-owners can vote on decisions that affect them. In practice, worker co-operatives have to accommodate a range of interests to survive and have experimented with different voice and voting arrangements to accommodate the interests of trade unions,<ref>{{cite book |last1=Whyte |first1=William Foote |last2=Whyte |first2=Kathleen King |title=Making Mondragón: The Growth and Dynamics of the Worker Cooperative Complex |date=1991 |publisher=Cornell University Press |isbn=978-0-87546-182-3 }}{{pn|date=March 2025}}</ref> local authorities,<ref name="Paton, R. 1989">{{cite book |last1=Paton |first1=Rob |title=Reluctant Entrepreneurs: The Extent, Achievements, and Significance of Worker Takeovers in Europe |date=1989 |publisher=Open University Press |isbn=978-0-335-09232-1 }}{{pn|date=March 2025}}</ref> those who have invested proportionately more labor, or through attempts to mix individual and collective forms of worker-ownership and control.<ref>{{cite book |last1=Holmstrom |first1=Mark |chapter=The Growth of the New Social Economy in Catalonia |pages=38–52 |title=Spain's New Social Economy: Workers' Self-Management in Catalonia |date=1993 |publisher=Bloomsbury Academic |isbn=978-0-85496-821-3 }}</ref>

As noted by theorists and practitioners alike, the importance of capital should be subordinated to labor in workers' cooperatives. Indeed, Adams et al. see workers' cooperatives as "labor-ist" rather than "capital-ist":

"Labor is the hiring factor, therefore the voting and property rights are assigned to the people who do the work and not to capital, even though the worker-members supply capital through membership fees and retained earnings...Any profit or loss after normal operating expenses is assigned to members on the basis of their labor contribution."<ref name="Adams" />

Nevertheless, recent developments in the co-operative movement have started to shift thinking more clearly towards multi-stakeholder perspectives. This has resulted in repeated attempts to develop model rules that differentiate control rights from investment and profit-sharing rights.<ref>{{cite web|url=http://www.commoncausefoundation.org/?q=node/4|title=Common Cause Foundation|access-date=2 May 2015|url-status=live|archive-url=https://web.archive.org/web/20131103122414/http://www.commoncausefoundation.org/?q=node%2F4|archive-date=3 November 2013}}</ref>

In short, workers' co-operatives are organized to serve the needs of worker-owners by generating benefits (which may or may not be profits) for the worker-owners rather than external investors. This worker-driven orientation makes them fundamentally different from other corporations. Additional cooperative structural characteristics and guiding principles further distinguish them from other business models. For example, worker-owners may not believe that [[profit maximization]] is the best or only goal for their co-operative or they may follow the [[Rochdale Principles]]. As another example, worker cooperatives' flattened management structure and more egalitarian ideology often give workers more options and greater freedom in resolving work-place problems.<ref>{{Cite web|url=http://www.gowerpublishing.com/isbn/9781409429241|archiveurl=https://web.archive.org/web/20131102230452/http://www.gowerpublishing.com/isbn/9781409429241|url-status=unfit|title=Co-operative Workplace Dispute Resolution by Elizabeth A. Hoffmann|archivedate=2 November 2013}}</ref>

Profits (or losses) earned by the worker's cooperative are shared by worker-owners. Salaries generally have a low ratio difference which ideally should be "guided by principles of proportionality, external solidarity and internal solidarity".<ref name="Adams" />

===Internal structure===
If exercised directly, all members meet regularly to make—and vote on—decisions on how the co-operative is run. Direct workers' cooperatives sometimes use [[consensus decision-making]] to make decisions.<ref name="Routes">[http://www.radicalroutes.org.uk/publicdownloads/setupaworkerscoop-lowres.pdf How to set up a Workers' Co-op] {{webarchive|url=https://web.archive.org/web/20131215041523/http://www.radicalroutes.org.uk/publicdownloads/setupaworkerscoop-lowres.pdf |date=15 December 2013 }} by Radical Routes</ref> Direct worker control ensures a formally flat management structure instead of a [[hierarchical]] one. This structure is influenced by activist collectives and civic organizations, with all members allowed and expected to play a managerial role. Such structures may be associated with political aims such as [[anarchism]], [[libertarian socialism]], [[distributism]], and [[participatory economics]].<ref>{{cite web|url=http://www.southendpress.org/about|title=About Us – SouthEnd Press|website=southendpress.org|url-status=live|archive-url=https://web.archive.org/web/20070208101437/http://www.southendpress.org/about|archive-date=8 February 2007}}</ref><ref>{{Cite web|url=https://distributistreview.com/archive/industry-a-distributist-solution-part-ii|title = Industry: A Distributist Solution Part II}}</ref><ref>{{cite web|url=http://haymarketcafe.org/|title=Haymarket Cafe|website=haymarketcafe.org|url-status=live|archive-url=https://web.archive.org/web/20070224145941/http://www.haymarketcafe.org/|archive-date=24 February 2007}}</ref>

Some workers' cooperatives also practice [[job rotation]] or [[balanced job complex]]es to overcome inequalities of [[Political power|power]] as well as to give workers a wider range of experiences and exposure to the different jobs in a workplace so that they are better able to make decisions about the whole workplace. This has proved sustainable with workforces as large as 300, as at [[Suma (co-operative)|Suma Wholefoods]].<ref>{{cite web | url=https://www.suma.coop/who-we-are/our-co-op/ | title=Our Co-op }}</ref>

====Worker collectives====
The term 'worker collective' is sometimes used to describe worker cooperatives which are also [[collectives]]: that is, managed without hierarchies such as permanent manager roles.<ref>{{cite web|url=http://cultivate.coop/wiki/Differences_Between_Worker_Cooperatives_and_Collectives|title=Differences Between Worker Cooperatives and Collectives |website=cultivate.coop|url-status=live|archive-url=https://web.archive.org/web/20170803214412/http://cultivate.coop/wiki/Differences_Between_Worker_Cooperatives_and_Collectives|archive-date=3 August 2017}}</ref>

====Common ownership====
===== Definition =====
The principle of common ownership was codified in UK law in the [https://www.legislation.gov.uk/ukpga/1976/78/contents Industrial Common Ownership Act 1976] which defines a "common ownership enterprise" as:

a body as to which the registrar has given, and has not revoked, a certificate stating that he is satisfied—

:(a) that the body is—

::(i) a company which has no share capital, is limited by guarantee and is a bona fide co-operative society; or

::(ii) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014; and

:(b) that the articles of association or rules of the body include provisions which secure—

::(i) that only persons who are employed by, or by a subsidiary of, the body may be members of it, that (subject to any provision about qualifications for membership which is from time to time made by the members of the body by reference to age, length of service or other factors of any description which do not discriminate between persons by reference to politics or religion) all such persons may be members of the body and that members have equal voting rights at meetings of the body,

::(ii) that the assets of the body are applied only for the purposes of objects of the body which do not include the making over of assets to any member of the body except for value and except in pursuance of arrangements for sharing the profits of the body among its members, and

::(iii) that, if on the winding up or dissolution of the body any of its assets remain to be disposed of after its liabilities are satisfied, the assets are not distributed among its members but are transferred to such a common ownership enterprise or such a central fund maintained for the benefit of common ownership enterprises as may be determined by the members at or before the time of the winding-up or dissolution or, in so far as the assets are not so transferred, are held for charitable purposes; and

:(c) that the body is controlled by a majority of the people working for the body and of the people working for the subsidiaries, if any, of the body.

The principle is typically implemented through inserting two clauses in a company's [[memorandum of association]], or an [[industrial and provident society]]'s rules:
* The first provides that the company's assets shall be applied solely in furtherance of its objectives and may not be divided among the members or trustees.
* The second provides for "[[altruism|altruistic]] dissolution", an "asset lock", whereby if the enterprise is wound up, remaining assets exceeding liabilities shall not be divided among the members but shall be transferred to another enterprise with similar aims or to charity.

==== Examples ====
A very significant early influence on the movement has been the [[Scott Bader Commonwealth]], a composites and specialty polymer plastics manufacturing company in Wellingborough, Northamptonshire, which its owner Ernest Bader gave to the workforce in installments through the late 1950s to early 1960s. Contrary to the popular concept of common ownership organizations as being small organisations, this is a high-technology chemical manufacturer whose turnover has exceeded £100 million per annum since the early 1990s with a workforce of hundreds.<ref>{{cite web | url=https://www.scottbader.com/about-us/what-makes-us-different/ | title=What makes us different | date=25 May 2023 }}</ref> In London, Calverts is an example of an established worker co-operative with a policy of pay parity.<ref>{{cite web | url=https://www.calverts.coop/co-operative/ | title=Cooperation }}</ref> From the collective movement, one of the most successful ventures is probably [[Suma (co-operative)|Suma Wholefoods]] in Elland, West Yorkshire.

===Financing===
==== ''Internal Capital Accounts/Member Buy-Ins'' ====
Internal Capital Accounts (ICA's), also known as Member Buy-Ins, are shares of capital distributed equally and exclusively to workers.<ref name="Lingane2017">{{cite web|last1=Lingane|first1=Alison|last2=McShiras|date=2017|title=The Original Community Investment: A Guide to Worker Coop Conversion Investment|url=https://www.project-equity.org/wp-content/uploads/2017/04/The-Original-Community-Investment_A-Guide-to-Worker-Coop-Conversion-Investments_Project-Equity.pdf|access-date=18 April 2021|website=Project Equity}}</ref> They act as a mandated buy-in loan to the cooperative that generates financial return over time in the form of interest.<ref name="Lingane2017" /> ICA's are typically equal to a specific term's wages, like an annual salary, that is given a fixed rate of return that is not directly tied to the cooperative's losses or profits.<ref>{{cite web|title=Our Principles|url=https://cooperationjackson.org/principles|access-date=2021-04-19|website=Cooperation Jackson|language=en-US}}</ref>

Cooperatives in low-income communities often raise donations to assist workers in meeting the ICA Buy-In requirement, as in the case of the Mariposa Food Coop.<ref name="Kelly2016">{{cite web|last1=Kelly|first1=Majorie|last2=Duncan|first2=Violeta|last3=Dubb|first3=Steve|last4=Abello|first4=Oscar|date=September 2016|title=Financing Cooperatives: Strategies for Financing the Inclusive Economy: Financing Cooperatives as a Tool to Create Jobs and Build Community Wealth|url=https://institute.coop/sites/default/files/resources/Democracy%20Collaborative%20-%20Financing%20Cooperatives.pdf|access-date=18 April 2021|website=Democracy Collaborative}}</ref> This method of financing is one of the most prominent due to its high rates of success in maintaining financial stability for cooperatives.<ref name="Kelly2016" /> When the cooperative allocates profits, a significant portion are paid back to the workers through these capital accounts. The [[Mondragon Corporation]] utilizes a 10-20-70 system, in which 10% of profits are placed into community development and infrastructure programs, 20% back into corporate reserves, and 70% into individual capital accounts.<ref name=":2">{{cite web|last=Morris|first=David|date=May 1992|title=The Mondragon System: Cooperation at Work|url=https://ilsr.org/mondragon-system-cooperation-work/| access-date=18 April 2021|website=Institute for Local Self-Reliance}}</ref>

In certain cases, like the Mumbai Tiffin Box Supplier's Association in India, Member Buy-In's allow cooperatives to become completely financially independent from other sources of investment.<ref name=":3">{{cite web|last1=Sapovadia|first1=Vrajlal|last2=Patel|first2=Akash|title=What Works for Workers' Cooperatives?: An Empirical Research on Success & Failure of Indian Workers' Cooperatives|url=https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---actrav/documents/meetingdocument/wcms_234160.pdf| website=International Labor Organization}}</ref>

==== ''Committed Capital/Preferred Stock'' ====
Committed Capital, also known as [[Preferred Stock]], are shares of capital offered to external accredited investors that are not a part of the cooperative.<ref name="Lingane2017" /> In order to maintain workers' ownership over the firm's decisions, these external investors have limited to no voting rights within the cooperative.<ref name=":4">{{cite web|last=Democracy at Work Institute|title=Investing in Worker Ownership: How Finance Institutions Can Create Deep Impact at Scale with Worker Cooperatives|url=https://institute.coop/sites/default/files/resources/DAWI%20-%20Investing%20in%20Worker%20Ownership.pdf|access-date=18 April 2021|website=US Federation of Worker Cooperatives}}</ref> Committed Capital often have non-guaranteed rates of return.<ref name="Lingane2017" /> However, [[Equal Exchange]], a U.S.-based worker cooperative, offers preferred stock that still ensures at least a 5% return rate even during periods of economic recession.<ref name="Co-opLaw"/><ref name="Lingane2017" />

Because the communal ownership model of cooperatives makes it difficult for investors to determine the credit and reliability of their investments, they often rely on close analysis of the structure, management, and experience of each cooperative in order to decide in which one to acquire stock.<ref name="Kelly2016" />

==== ''State Financing'' ====
In many countries, the state provides loans or direct funding for worker cooperatives' production, community programs, and investments. Government funding is especially important in assisting newly developing cooperatives in securing finances for the initial stages of business.<ref name="Kelly2016" />

In Spain, the [[Basque Government]] assists in financing cooperatives within the [[Mondragon Corporation]] and for many of Mondragon's education and healthcare programs.<ref name=":2" /> Additionally, the [[Basque Government]] financially assists Mondragon in acquiring declining capitalist businesses and transitioning them into worker cooperatives.<ref name=":2" />

The [[Government of India|Indian government]] provides financing, often in the form of loans, to new cooperatives. The [[government of Kerala]]<ref>{{cite thesis |last1=Mayya |first1=Sureshramana |title=Workers cooperatives in India - A study with reference to their potential Social and Economic contributions |date=2002 |hdl=10603/131273 |hdl-access=free }}{{pn|date=March 2025}}</ref> and the [[Khadi and Village Industries Commission|Khadi Development and Village Industries Commission]]<ref name=":3" /> in India often provide initial loans for cooperatives in order to help them eventually transition into relying primarily on Internal Capital Accounts.

In 1978, the [[Government of the United Kingdom|UK government]] set up the National Cooperative Development Agency and in subsequent years common ownership was promoted as a model to create employment, leading approximately 100 local authorities to establish cooperative development agencies.<ref>{{cite journal |last1=Cornforth |first1=Chris |title=The Role of Local Co-Operative Development Agencies in Promoting Worker Co-Operatives |journal=Annals of Public and Cooperative Economics |date=July 1984 |volume=55 |issue=3 |pages=253–280 |doi=10.1111/j.1467-8292.1984.tb01777.x }}</ref><ref>Manuela Sykes (1981) ''Co-operating in Employment Creation. The role of common ownership enterprise in the economic and social regeneration of areas of high unemployment: a request and a challenge to local authority leadership'', Leeds: ICOM.</ref> The Industrial Common Ownership Act authorized the Secretary of State for Industry to make grants and loans to organizations that assisted common ownership and cooperative enterprises. Grants were made to the [[Industrial Common Ownership Movement]] and the Scottish Co-operatives Development Committee, while loans were administered through Common Ownership Finance Ltd.<ref>"Common Ownership (Grants and Loans) (Hansard, 7 December 1978)". ''api.parliament.uk''.</ref> However, this section was repealed in 2004.

The [[Government of Italy|Italian Government]], through the ''Legge Marcora'' (Marcora Law) provisions of 1985, reformed in 2001, has established a financing mechanism of patient capital for creating worker cooperatives, social cooperatives, and for worker buyouts of firms that are in trouble or that have retiring owners,<ref name="Vieta, Marcelo 2020">{{cite book |doi=10.4324/9780429285936 |title=Cooperatives and the World of Work |date=2019 |isbn=978-0-429-28593-6 |editor-last1=Roelants |editor-last2=Eum |editor-last3=Eşim |editor-last4=Novkovic |editor-last5=Katajamäki |editor-first1=Bruno |editor-first2=Hyungsik |editor-first3=Simel |editor-first4=Sonja |editor-first5=Waltteri |chapter=Saving jobs and businesses in times of crisis: The Italian road to creating worker cooperatives from worker buyouts |first1=Marcelo |last1=Vieta |url=https://hal.archives-ouvertes.fr/hal-02264849/file/Coop%26WorldOfWork_Boudes.pdf |chapter-url={{GBurl|Jd2iDwAAQBAJ|pg=PT288}} }}</ref> especially for traditional businesses that require extra financial assistance while transitioning or converting into cooperatives.<ref name=":5">{{cite web|last1=Corcoran|first1=Hazel|last2=Wilson|first2=David|date=31 May 2010|title=The Worker Co-operative Movements in Italy, Mondragon and France: Context, Success Factors and Lessons|url=https://community-wealth.org/sites/clone.community-wealth.org/files/downloads/paper-corcoran-wilson.pdf|access-date=28 April 2021|website=Canadian Worker Cooperative Federation}}</ref> Originally, this state investment was equivalent to three times the collective internal capital account investment from workers.<ref name=":5" /> As of 2001, the state investment is on a 1:1 ratio with workers' capital contributions.<ref name="Vieta, Marcelo 2020"/>

Canadian worker cooperatives also rely on government funding to finance their early development.<ref name=":7">{{cite web|last1=Hough|first1=Peter|last2=Wilson|first2=David|last3=Corcoran|first3=Hazel|date=31 May 2010|title=The Worker Co-op Sector in Canada: Success Factors, and Planning for Growth|url=http://www.socialeconomyhub.ca/sites/socialeconomyhub.ca/files/Canadian%20SSHRC%20Paper%2016-6-2010%20fnl_0.doc|access-date=28 April 2021|website=Canadian Worker Cooperative Federation}}</ref> State sources of finance, which often come in the form of grants, include the Quebec Local Development Centre, the Co-op Development Initiative, and the Young Entrepreneurs program.<ref name=":7" />

==== ''Financing via Traditional Business Transitions'' ====
When the owner of a traditional business decides to resign and transition the ownership of the firm into a workers' cooperative, they often provide initial financial investment.<ref name=":4" /> However, this typically is not a sustainable form of capital investment and cooperatives often use it to begin business and then transition to depend on other forms of finance.<ref name=":4" /> Examples of this method of financing include Select Machines, Inc.,<ref>{{cite web|title=Transitioning a Private Business to a Worker Cooperative: A Viable Community Development Tool {{!}} Grassroots Economic Organizing|url=https://geo.coop/articles/transitioning-private-business-worker-cooperative-viable-community-development-tool|access-date=2021-04-28|website=geo.coop}}</ref> Metis Construction, A Slice of New York, and Rock City Roasters.<ref name=":6">{{cite web|title=Becoming Employee-Owned: A Small Business Toolkit for Transitioning to Employee Ownership|url=https://resources.uwcc.wisc.edu/Business%20Conversion/Becoming%20Employee%20Owned%20Toolkit.pdf|access-date=28 April 2021|website=University of Wisconsin Center for Cooperatives|publisher=Democracy at Work Institute}}</ref>

The transition process often takes several years and is executed in 5 stages. First, the selling owners must evaluate if a transition is an appropriate step for the business and must consult with advisors and employees regarding new leadership changes. Second, the selling owner must employ specialists to determine the legal and financial logistics of the transition. Third, a transition group or the selling owner must organize the new managerial structure, business practices, and ownership policies. Fourth, legal contracts are signed to establish the new management while methods of finance are drawn upon to jumpstart the newfound cooperative. Fifth, an adjustment period occurs in which training is provided for workers regarding new business policies.<ref name=":6" />

==== ''External Finance Firm Investment'' ====
Most finance firms that specialize in providing capital for worker cooperatives are Cooperative Funds and [[Community development financial institution|Community Development Financial Institutions]] (CDFI's).<ref name="Lingane2017" /> CDFI's often do not supply the majority of finance for cooperatives, but act as collateral for other forms of investment and/or as support for another form of finance. Additionally, many cooperatives utilize external finance for improvements to their physical capital in order to improve productivity.<ref name="Kelly2016" /> Several U.S. CDFIs include the Cooperative Fund of New England, the Common Wealth Revolving Loan Fund, the Shared Capital Cooperative of Minneapolis, and [[Capital Impact Partners]].<ref name="Kelly2016" />

In France, worker cooperatives contribute funds to the SOCODEN (Société coopérative de développement et d'entraide), a cooperative financial institution that finances developing and struggling cooperatives. Additionally, this fund provides collateral for other sources of funding and subsidies for interests on loans for these cooperatives.<ref name=":5" />

==== ''Direct Public Offerings'' ====
[[Direct public offering|Direct Public Offerings]] (DPO's) are loans or donations generated either socially by communities or individually by both accredited and non-accredited investors.<ref name="Lingane2017" /> The voting rights that this investment produces for the community or investor varies depending on the cooperative and offering type.<ref name="Lingane2017" /> This form of financing is especially popular with cooperatives that provide services to local communities.<ref name=":4" /> One of the primary attributes of DPO's that attract cooperatives is that by advertising investment opportunities to local communities, the firm not only generates financial capital but it also employs an efficient method of advertising that keeps the community engaged in the firm's products and success.<ref name="Lingane2017" /> For cooperatives undergoing an ownership transition, DPO's are often a source of financial support to the initial loan of the retiring owner.<ref name=":4" /> Examples of firms that have utilized Direct Public Offerings for financial support are Real Pickles and the CERO Cooperative.<ref name=":4" />

==== ''Peer Financing'' ====
Many worker cooperatives utilize surplus profits to provide loans or establish offering funds in order to support other developing or struggling cooperatives.<ref name="Kelly2016" /> These funds are also used as collateral for other forms of finance by cooperatives in need.<ref name="Kelly2016" /> Examples of Peer Financing in the U.S. include the [[Evergreen Cooperatives]], the Share Capital Cooperative, and the Valley Alliance of Worker Cooperatives.<ref name="Kelly2016" />

In Italy, large cooperative federations utilize excess profits to develop peer financing funds that not only financially assist other cooperatives, but are also used for workers' training programs and for research into cooperatives.<ref name=":5" />

France's worker cooperatives, otherwise known as ''sociétés coopératives et participatives'' (SCOPs), are required to allocate a small portion of profits to a financial fund for other French worker cooperatives in [[cooperative federation]]s.<ref name=":5" />

==An economic model: the labor-managed firm==

Economists have modeled the worker cooperative as a firm in which labor hires capital, rather than capital hiring labor as in a conventional firm. The classic theoretical contributions of such a "labor managed firm" (LMF) model are due to Benjamin Ward and [[Jaroslav Vanek]].<ref>{{cite book |last1=Vanek |first1=Jaroslav |title=The General Theory of Labor-managed Market Economies |date=1970 |publisher=Cornell University Press |isbn=978-0-8014-0557-0 }}{{pn|date=March 2025}}</ref><ref name="Ward The Firm in Illyria">{{cite journal |last1=Ward |first1=Benjamin |title=The Firm in Illyria: Market Syndicalism |journal=The American Economic Review |date=1958 |volume=48 |issue=4 |pages=566–589 |jstor=1808268 }}</ref>

In the neoclassical version, the objective of the LMF is to maximize not total profit, but rather income per worker. But such a scenario implies "perverse" behavior, such as laying off workers when output price rises so as to divide increased profits among fewer members.<ref name="Ward The Firm in Illyria"/> Evidence supporting such behavior is lacking, however; a review of the empirical economics literature is found in Bonin, Jones, and Putterman.<ref>{{cite journal |last1=Bonin |first1=John P. |last2=Jones |first2=Derek C. |last3=Putterman |first3=Louis |title=Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet? |journal=Journal of Economic Literature |date=1993 |volume=31 |issue=3 |pages=1290–1320 |jstor=2728242 }}</ref><ref>{{cite journal |last1=Bartlett |first1=Will |last2=Cable |first2=John |last3=Estrin |first3=Saul |last4=Jones |first4=Derek C. |last5=Smith |first5=Stephen C. |title=Labor-Managed Cooperatives and Private Firms in North Central Italy: An Empirical Comparison |journal=ILR Review |date=October 1992 |volume=46 |issue=1 |pages=103–118 |doi=10.1177/001979399204600108 }}</ref> But alternative behavioral models have been proposed. Peter Law examined LMFs that value employment and income.<ref>{{cite journal |last1=Law |first1=Peter J. |title=The Illyrian Firm and Fellner's Union-Management Model |journal=Journal of Economic Studies |date=1977 |volume=4 |issue=1 |pages=29–37 |doi=10.1108/eb002464 |url=https://ageconsearch.umn.edu/record/268992/files/twerp094.pdf?subformat=pdfa }}</ref> Nobel Laureate [[Amartya Sen]] examined pay according to work and according to need.<ref>{{cite journal |last1=Sen |first1=Amartya K. |title=Labour Allocation in a Cooperative Enterprise |journal=The Review of Economic Studies |date=October 1966 |volume=33 |issue=4 |pages=361–371 |doi=10.2307/2974432 |jstor=2974432 }}</ref> Nobel Laureate [[James Meade]] examined behavior of an "inegalitarian" LMF.<ref>{{cite journal |last1=Meade |first1=J. E. |title=The Theory of Labour-Managed Firms and of Profit Sharing |journal=The Economic Journal |date=March 1972 |volume=82 |issue=325 |pages=402–428 |doi=10.2307/2229945 |jstor=2229945 }}</ref> Worker cooperatives tend to have a more compressed wage distribution, which can potentially turn off high-ability workers, potentially causing the cooperative to suffer a "brain drain" as they leave to seek higher wages elsewhere, though this effect is less of an issue in a cooperative with a less compressed wage distribution.<ref>{{cite journal |last1=Burdín |first1=Gabriel |title=Equality Under Threat by the Talented: Evidence from Worker-Managed Firms |journal=The Economic Journal |date=August 2016 |volume=126 |issue=594 |pages=1372–1403 |doi=10.1111/ecoj.12272 |hdl=11365/1277350 |url=https://eprints.whiterose.ac.uk/92229/2/Equality%20Under%20Threat%20EJ_2015.pdf }}</ref> Hiring managers from capitalist firms can be very difficult because of the lower wages.<ref name="Basterretxea">{{cite journal |last1=Basterretxea |first1=Imanol |last2=Heras-Saizarbitoria |first2=Iñaki |last3=Lertxundi |first3=Aitziber |title=Can employee ownership and human resource management policies clash in worker cooperatives? Lessons from a defunct cooperative |journal=Human Resource Management |volume=58 |date=20 February 2019 |issue=6 |pages=585–601 |doi=10.1002/hrm.21957 |hdl=10810/31804 |hdl-access=free }}</ref>

The evidence on whether Cooperatives are more productive than IOFs is mixed, depending on location and sector.<ref name="The Economics Review"/><ref name="Monteiro Straume COOPERATIVES MORE PRODUCTIVE"/><ref>{{cite journal |last1=Doucouliagos |first1=Chris |title=Worker Participation and Productivity in Labor-Managed and Participatory Capitalist Firms: A Meta-Analysis |journal=ILR Review |date=October 1995 |volume=49 |issue=1 |pages=58–77 |doi=10.1177/001979399504900104 }}</ref> Research indicates that employee ownership can improve company performance, increase firm stability, increase survival rates and reduce layoffs during a crisis, though the effect is small and only an average, meaning it is not necessarily guaranteed to bring benefits.<ref>{{cite journal |last1=Kruse |first1=Douglas |title=Does employee ownership improve performance? |journal=IZA World of Labor |date=2016 |doi=10.15185/izawol.311 |doi-access=free }}</ref> A 2016 metanalysis concluded that employee ownership had a small positive effect on firm performance but no effects on efficiency or growth-related outcomes.<ref>{{cite journal |last1=O'Boyle |first1=Ernest H. |last2=Patel |first2=Pankaj C. |last3=Gonzalez-Mulé |first3=Erik |title=Employee ownership and firm performance: a meta-analysis |journal=Human Resource Management Journal |date=November 2016 |volume=26 |issue=4 |pages=425–448 |doi=10.1111/1748-8583.12115 }}</ref> However some researchers have argued that while cooperatives can have higher performance in some circumstances, there is generally little difference in performance between cooperatives and conventional firms and that ultimately they are, on average, just as productive as each other.<ref>{{cite journal |last1=Arando |first1=Saioa |last2=Gago |first2=Monica |last3=Jones |first3=Derek C. |last4=Kato |first4=Takao |title=Efficiency in Employee-Owned Enterprises: An Econometric Case Study of Mondragon |journal=ILR Review |date=March 2015 |volume=68 |issue=2 |pages=398–425 |doi=10.1177/0019793914564966 }}</ref><ref name="Monteiro Straume COOPERATIVES MORE PRODUCTIVE"/> Economists have explained the clustering of worker coops through leagues or "supporting structures"<ref>[[Jaroslav Vanek]] termed such leagues "supporting structures."</ref> Regions where large clusters of worker cooperatives are found supported by leagues include [[Mondragón]], in the [[Basque Country (autonomous community)|Basque region of Spain]], home of [[Mondragón Cooperative Corporation]] and in Italy, particularly [[Emilia-Romagna]]. Leagues provide various kinds of scale economies to make coops viable. But as leagues need coops to start them the result is a [[chicken or egg]] problem that helps explain why few coops get started.<ref>{{cite journal |last1=Joshi |first1=Sumit |last2=Smith |first2=Stephen C. |title=Endogenous formation of coops and cooperative leagues |journal=Journal of Economic Behavior & Organization |date=October 2008 |volume=68 |issue=1 |pages=217–233 |doi=10.1016/j.jebo.2008.04.001 }}</ref> Research has suggested that the primary appeal of a cooperative for its members is in security of employment, as workers can actually become decoupled from a cooperative's ostensible worker ownership (due to a mixture of interests and the more individualistic values of more recent workers), making secure employment, particularly in economically precarious times, a major draw.<ref>{{cite journal |last1=Heras-Saizarbitoria |first1=Iñaki |title=The ties that bind ? Exploring the basic principles of worker-owned organizations in practice |journal=Organization |date=September 2014 |volume=21 |issue=5 |pages=645–665 |doi=10.1177/1350508414537623 }}</ref> While it has been suggested that cooperatives could be a solution to unemployment, research indicates that this is unlikely to be the case.<ref>{{cite journal |last1=Staber |first1=Udo |title=Worker Cooperatives and the Business Cycle: Are Cooperatives the Answer to Unemployment ? |journal=The American Journal of Economics and Sociology |date=April 1993 |volume=52 |issue=2 |pages=129–143 |doi=10.1111/j.1536-7150.1993.tb02521.x }}</ref>

Worker cooperatives do not seem to differ in innovation or management capabilities from conventional firms.<ref>{{cite journal |last1=Basterretxea |first1=Imanol |last2=MartíNez |first2=Ricardo |title=Impact of Management and Innovation Capabilities on Performance: Are Cooperatives Different? |journal=Annals of Public and Cooperative Economics |date=September 2012 |volume=83 |issue=3 |pages=357–381 |doi=10.1111/j.1467-8292.2012.00467.x }}</ref> Workers at cooperatives tend to report higher levels of involvement in their tasks, more positive evaluations of supervisors and greater fairness in their perception of the amount of wages they received and methods of payment.<ref>{{cite journal |last1=Frohlich |first1=Norman |last2=Godard |first2=John |last3=Oppenheimer |first3=Joe A. |last4=Starke |first4=Frederick A. |title=Employee versus conventionally-owned and controlled firms: an experimental analysis |journal=Managerial and Decision Economics |date=June 1998 |volume=19 |issue=4–5 |pages=311–326 |doi=10.1002/(SICI)1099-1468(199806/08)19:4/5<311::AID-MDE893>3.0.CO;2-I }}</ref> Employment in worker-owned firms tends to be more stable than conventional firms, which fluctuate more. This was attributed to conventional firms fixing wages and having to lay off employees during times of economic difficulty, as workers would not accept a wage cut since they could not guarantee restoration of their original wages at a later date, requiring workers to be laid off instead. In a cooperative, workers can accept a wage cut since they know they can restore it at a later date.<ref>{{cite journal |last1=Albanese |first1=Marina |last2=Navarra |first2=Cecilia |last3=Tortia |first3=Ermanno C. |title=Employer moral hazard and wage rigidity. The case of worker owned and investor owned firms |journal=International Review of Law and Economics |date=August 2015 |volume=43 |pages=227–237 |doi=10.1016/j.irle.2014.08.006 |hdl=11572/97474 |hdl-access=free }}</ref> Cooperatives have a higher survival rate than traditional firms, which seems to be down to greater employment stability and willingness of workers to make adjustments to allow the firm to survive, rather than other possible explanations like greater productivity or financial strength.<ref>{{cite book |doi=10.1016/S0885-3339(04)08001-9 |chapter=Does Employee Ownership Enhance Firm Survival? |title=Employee Participation, Firm Performance and Survival |series=Advances in the Economic Analysis of Participatory & Labor-Managed Firms |date=2004 |last1=Park |first1=Rhokeun |last2=Kruse |first2=Douglas |last3=Sesil |first3=James |volume=8 |pages=3–33 |isbn=0-7623-1114-2 }}</ref> Worker cooperatives and conventional firms tend to have similar wages after controlling for other possible variables, with any wage differentiation being due to other characteristics aside from firm organization.<ref>{{cite journal |last1=Bailly |first1=Franck |last2=Chapelle |first2=Karine |last3=Prouteau |first3=Lionel |title=Wage differentials between conventional firms and non-worker cooperatives: Analysis of evidence from France |journal=Competition & Change |date=August 2017 |volume=21 |issue=4 |pages=321–341 |doi=10.1177/1024529417713769 }}</ref>
If the workers are not satisfied with their work and participation, they can express their disengagement with higher rates of [[absenteeism]].<ref name="Basterretxea"/>
Managers can refrain from proposing controversial, needed changes if they feel that they would be rejected by the workers.<ref name="Basterretxea"/>

==By country==
{{See also|List of worker cooperatives}}

===Europe===
Worker co-operation is well established in most countries in Europe, with the largest movements being in Italy, Spain, and France.<ref>{{cite web|url=https://www.cicopa.coop/wp-content/uploads/2018/01/Cooperatives-and-Employment-Second-Global-Report-2017.pdf |access-date=2023-09-22| title=Cooperatives and Employment | date=2017}}</ref>

The [[European Cooperative Statute]],<ref>{{CELEX|32003R1435|text=Council Regulation (EC) No 1435/2003 of 22 July 2003 on the Statute for a European Cooperative Society (SCE)}}</ref> which has been in force since 2006, permits worker cooperatives to be created by individuals or corporate bodies in different EU countries. It is a loose framework that devolves much detail to the national legislation of the country in which the European Cooperative Society (ECS) is registered. It permits a minority of shares to be held by 'investor members' which are not employees.

====France====

Workers' associations were legalized in 1848 and again in 1864. In 1871, during the [[Paris Commune]], workshops abandoned by their owners were taken over by their workers. In 1884 a chamber of workers' cooperatives was founded. By 1900 France had nearly 250 workers' cooperatives and 500 by 1910. The movement was to rise and fall throughout the twentieth century, with growth in 1936, after the Second World War, between 1978 and 1982 and since 1995.

In 2004 France had 1700 workers' co-operatives, with 36,000 people working in them. The average size of a co-operative was 21 employees. More than 60% of co-operative employees were also members.<ref>CGSCOP</ref> French workers' co-operatives today include some large organisations such as {{Interlanguage link multi|Chèque Déjeuner|fr|3=Groupe Up}} and {{Interlanguage link multi|Acome|fr}}. Other cooperatives whose names are generally known to include the magazines ''[[Alternatives économiques]]'' and ''[[Les Dernières Nouvelles d'Alsace]]'', the driving school ECF CERCA and the toy manufacturer "Moulin Roty".

==== Germany ====
According to a publication by [[Deutscher Genossenschafts- und Raiffeisenverband|DGRV]], there were 7000 active cooperatives in Germany in 2024, only 83 of which were classified as worker cooperatives.<ref>[https://www.dgrv.de/publication/zahlen-und-fakten-2024/ “Zahlen und Fakten” 2024 report about the cooperatives ecosystem in Germany], published by [[Deutscher Genossenschafts- und Raiffeisenverband|DGRV]]</ref>

In 2022 a new initiative called [https://genossenschaften.digital #GenoDigital] started political work to modernize German cooperative law. Due to their efforts, many cooperative procedures can now be conducted digitally, among them accepting new members and holding member assemblies via videoconferencing tools.<ref>{{Cite web |title=Wirkung {{!}} Genossenschaften digital - #GenoDigital |url=https://genossenschaften.digital/wirkung |access-date=2025-06-19 |website=Inspiration, Vernetzung und Wissen für Menschen, die Genossenschaften gestalten. |language=de}}</ref>

====Italy====

According to [[EURICSE]] there are 29,414 worker cooperatives in Italy.<ref>{{cite web|url=https://euricse.eu/en/structure-and-performance-of-italian-cooperatives|title=EURICSE. "Structure and Performance of Italian Cooperatives"|website=euricse.eu|date=30 January 2019 }}</ref> A study conducted by the organization measured the survival rates of worker buyouts (WBOs) of failed firms that transitioned to worker cooperatives in the manufacturing sector and found that they generally had greater rates of survival than the average for all Italian businesses in the same sector.<ref>{{cite web|url=https://euricse.eu/en/publications/italys-worker-buyouts-in-times-of-crisis|title=EURICSE. "Italy's Worker Buyouts in Times of Crisis"|website=euricse.eu}}</ref>

Pencavel et al. (2006) found that in the north of [[Italy]], the area where the most co-ops are located, employing around over 4% of the labour force, actually paid their workers 14% less than capitalist firms and their wages were more volatile. This was after controlling for various variables, such as schooling, age, gender, occupation, industry, location, firm-size, user cost of capital, fixed costs, and deviations in its real sales.<ref name="pencavel2006"/> The cooperative movement in Emilia-Romagna, Italy, successfully melds two divergent philosophical currents: Socialism and Catholicism.<ref>{{cite web|url=https://www.scribd.com/doc/8311289/emiliaromagna|title=emiliaromagna|access-date=2 May 2015|url-status=live|archive-url=https://web.archive.org/web/20141009212433/https://www.scribd.com/doc/8311289/emiliaromagna|archive-date=9 October 2014}}</ref> With more than a century of cooperative history, the region includes more than 8,000 cooperatives.

====Spain====

Spain is home to over 17,000 worker cooperatives.<ref>{{cite web|url=https://www.thenews.coop/spanish-worker-co-ops-continue-to-grow-despite-pandemic-challenges|title=Voinea, Anca. TheNews.coop "Spanish worker co-ops continue to grow despite pandemic challenges"|website=thenews.coop|date=August 2022 }}
</ref> One of the world's best known examples of worker cooperatives is the [[Mondragón Cooperative Corporation]] in the [[Basque Country (autonomous community)|Basque Country]].<ref>{{cite web|url=http://web.uvic.ca/bcics/research/worker/mondragon.htm|title=Smith, Julia. BC Institute for Co-operative Studies "The Most Famous Worker Co-operative of All...Mondragon"|website=uvic.ca|url-status=live|archive-url=https://web.archive.org/web/20070501034834/http://web.uvic.ca/bcics/research/worker/mondragon.htm|archive-date=1 May 2007}}</ref>

====United Kingdom====

In the United Kingdom, the [[Labour Party (UK)|Labour Party]]'s enthusiasm for worker cooperatives was at its highest in the 1970s and 1980s, with [[Tony Benn]] being a prominent advocate. The principle has also found some support from the more radical wing of the [[Liberal Democrats (UK)|Liberal Democrats]], such as from [[Michael Meadowcroft]].<ref>{{cite web|url=https://beemeadowcroft.uk/liberal/strategy-paper.pdf|last=Meadowcroft|first=Michael|title=The Liberal Democrats: A Strategy for a Relevant Basis of Philosophy and Political Values –And for Reviving and Developing the Party |access-date=6 June 2021|page=2}}</ref>

A small number of such co-operatives were formed during the 1974 Labour Government as worker takeovers<ref>{{cite journal |last1=Ridley-Duff |first1=Rory |title=Communitarian Perspectives on Social Enterprise* |journal=Corporate Governance: An International Review |date=March 2007 |volume=15 |issue=2 |pages=382–392 |doi=10.1111/j.1467-8683.2007.00568.x }}</ref> following the bankruptcy of a private firm in a desperate attempt to save the jobs at risk. However the change in ownership structure was usually unable to resist the underlying commercial failure.<ref name="Paton, R. 1989" /> This was true in particular of the best known, the [[Meriden, West Midlands|Meriden]] motor-cycle cooperative in the [[West Midlands (county)|West Midlands]] which took over the assets of the ailing [[Triumph Engineering Co Ltd#The Meriden Motorcycle Co-operative|Triumph]] company, although there were instances of successful employee buy-outs of nationalized industries in the period, notably [[National Express]].<ref>{{cite journal |last1=Spear |first1=Roger |title=The Rise and Fall of Employee-Owned UK Bus Companies |journal=Economic and Industrial Democracy |date=May 1999 |volume=20 |issue=2 |pages=253–268 |doi=10.1177/0143831x99202005 }}</ref> Meanwhile, many more worker co-operatives were founded as start-up businesses, and by the late 1980s, there were some 2,000 in existence. Since then the number has declined to about 400 in 2022.<ref>{{cite journal|last=Harvey|first=R. |date=2022-06-01|title=New federation planned for worker co-ops in the UK|journal=Co-operative News|url=https://www.thenews.coop/162850/sector/worker-coops/new-federation-planned-for-worker-co-ops-in-the-uk|access-date=2023-09-22}}/</ref>

Co-operatives are typically registered under either the [[Companies Act 2006]] or the [[Co-operative and Community Benefit Societies Act 2014]] (IPS), though other legal forms are available. A number of model rules have been devised to enable cooperatives to register under both acts; for workers' cooperatives, these rules restrict membership to those who are employed by the workplace. Most workers' co-operatives are incorporated bodies, which limits the liability if the co-operative fails and goes into liquidation.<ref name="Routes" />

The largest examples of a British worker cooperatives include, [[Suma (co-operative)|Suma Wholefoods]], [[Bristol|Bristol-based]] Essential Trading Co-operative and the [[Brighton]]-based [[Infinity Foods Workers Co-operative]].<ref>{{cite web|url=http://www.employeeownership.co.uk|title=Home – Employee Ownership Association|work=Employee Ownership Association|access-date=2 May 2015|url-status=live|archive-url=https://web.archive.org/web/20150508040536/http://employeeownership.co.uk/|archive-date=8 May 2015}}</ref>

In 2022 a new federation of worker co-operatives in the UK, workers.coop, was founded.<ref>{{Cite news |first=Miles |last=Hadfield |date=2023-05-02 |title=Looking back on the first year of the UK's worker co-op body |work=[[Co-op News]] |url=https://www.thenews.coop/looking-back-on-the-first-year-of-the-uks-worker-co-op-body/ |access-date=2025-05-26}}</ref>

===In North America===

====United States====
[[File:Worker_cooperative_states.svg|thumb|States in the United States which have laws allowing for creation of worker cooperatives.]]
'''National organization'''

The [[United States Federation of Worker Cooperatives]] is the only organization in the U.S. representing worker cooperative interests nationally. Offering a voice on national level, promoting the worker co-operative model, uniting co-ops at conferences and providing a base of support and technical assistance to the worker co-operative community.<ref>{{Cite web|url=http://usworker.coop/member-directory|archiveurl=https://web.archive.org/web/20150224005430/http://usworker.coop/member-directory|url-status=unfit|title=USFWC Member Directory|archivedate=24 February 2015|website=US Federation of Worker Cooperatives}}</ref>

In 2018, as part of the [[National Defense Authorization Act for Fiscal Year 2019]], the Main Street Employee Ownership Act, drafted by Sen.[[Kirsten Gillibrand]] and Rep. [[Nydia Velázquez]], was signed into law. It allows for employee-owned businesses to be eligible for SBA section (7)a loans for the first time.<ref>{{Cite web |last=CLUSA |first=NCBA |date=2018-08-14 |title=Landmark Employee Ownership Act, Signed Into Law Yesterday, Will Amend Lending Landscape for Worker Co-ops |url=https://ncbaclusa.coop/blog/landmark-employee-ownership-act-signed-into-law-yesterday-will-amend-lending-landscape-for-worker-co-ops/ |access-date=2025-02-21 |website=NCBA CLUSA}}</ref>

'''Regional organizations'''

The Eastern Conference for Workplace Democracy<ref>{{cite web|url=http://east.usworker.coop/|title=Home|date=4 March 2017|website=usworker.coop|url-status=live|archive-url=https://web.archive.org/web/20130404015311/http://east.usworker.coop/|archive-date=4 April 2013}}</ref> and Western Worker Co-operative Conference<ref>{{cite web |url=http://west.usworker.coop/ |title=Western Worker Cooperative Conference |access-date=2013-02-28 |url-status=live |archive-url=https://web.archive.org/web/20120117061147/http://west.usworker.coop/ |archive-date=17 January 2012 }}</ref> hold conferences every other year for their respective regions. In addition, there are national and regional nonprofit organizations that focus on providing technical support and assistance to both create new worker cooperatives (start-ups) and conversions of existing businesses into worker cooperatives, usually when the business owner is retiring and wants to sell the company. These organizations include [[Democracy at Work Institute]] (created by the [[United States Federation of Worker Cooperatives|U.S. Federation of Worker Cooperatives]]), [[Cooperative Development Institute]], [[Ohio Employee Ownership Center]], [[Vermont Employee Ownership Center]], [[Rhode Island Center for Employee Ownership]], [[Project Equity]], and others.{{fact|date=March 2025}}

[[Cooperation Jackson]] is a federation of cooperatives based in [[Jackson, Mississippi]], which seeks to build worker-owned coops and other locally operated institutions.<ref>{{Cite news|url=https://www.thenation.com/article/meet-the-radical-workers-cooperative-growing-in-the-heart-of-the-deep-south/|title=Meet the Radical Workers' Cooperative Growing in the Heart of the Deep South|last=Moskowitz|first=Peter|date=2017-04-24|work=The Nation|access-date=2018-12-20|language=en-US |archive-date=29 October 2019|archive-url=https://web.archive.org/web/20191029173923/https://www.thenation.com/article/meet-the-radical-workers-cooperative-growing-in-the-heart-of-the-deep-south/|url-status=dead}}</ref><ref>{{Citation|last=Democracy at Work|title=Economic Update: Cooperation Jackson: A Closer Look|date=17 December 2018 |url=https://www.youtube.com/watch?v=ghFC71AXD6o&t=902| archive-url=https://ghostarchive.org/varchive/youtube/20211117/ghFC71AXD6o| archive-date=2021-11-17 | url-status=live|access-date=2018-12-20}}{{cbignore}}</ref>

The [[Freedom Quilting Bee]] was a notable cooperative founded in Alabama during the midst of the Civil Rights movement, and was instrumental in helping underprivileged black workers in the area escape poverty, amassing enough success to fill orders for major department stores such as [[Sears]] while helping to spark contemporary interest in quilting.

==== By state ====
Several states have enacted statutes to enable incorporation of worker cooperatives, with Massachusetts being the first in 1982. Illinois in 2019 was the first to allow the creation of limited worker cooperative associations, a form of [[Limited cooperative association]].  
{| class="wikitable sortable"
|+
!State
!Statute
!Legislation
!Date passed
!Date in effect
|-
|Alabama
|Ala. Code §§ 10a-11-1.01 to 10a-11-1.01
|HB 156/Act 97-949
|23 September 1997
|
|-
|California
|Cal. Corp. Code §§12200 to 12656.5
|[https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB816 AB 816]
|12 August 2015
|
|-
|Connecticut
|Conn. Gen. Stat. §§ 33-418f to 33-418o
|
|
|
|-
|Delaware
|[https://delcode.delaware.gov/title6/c014/index.html 6 DE Code § 1401 to 1414]
|
|1996
|
|-
|Illinois
|[https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=4016&ChapterID=65 805 ILCS 317/21]
|
|9 August 2019
|1 January 2020
|-
|Kentucky
|Ky. Rev. Stat. § 272.010
|
|
|
|-
|Maine
|13 Me. Rev. Stat. Ann. §§ 1971 to 1984
|
|1983
|
|-
|Massachusetts
|[https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter157A Mass. Gen. Laws ch. 157A]
|
|1982
|
|-
|Michigan
|[https://www.legislature.mi.gov/documents/mcl/pdf/mcl-Act-152-of-1985.pdf Mich. Comp. Laws. Ann. §§ 450.731 to 450.738]
|
|1985
|
|-
|Nevada
|NV Rev Stat § 81.901 to 81.959
|[https://www.leg.state.nv.us/App/NELIS/REL/80th2019/Bill/6821/Overview Nev. Rev. Stat. AB 432, §§ 2 to 31]
|28 May 2019
|
|-
|New Jersey
|N.J. Stat. Ann. §§ 34-17-1 to 34-17-18
|
|
|
|-
|New York
|[https://www.nysenate.gov/legislation/laws/CCO/A5-A N.Y. Coop. Corp. §§ 80 to 94]
|
|
|
|-
|Oregon
|Or. Rev. Stat. §§ 62.765 to 62.792
|
|1987
|
|-
|Pennsylvania
|Pa. Cons. Stat. Ann. §§ 7701 to 7726
|
|1988
|
|-
|Puerto Rico
|P.R. Laws Ann. tit. 5, §§ 4570 to 4577
|
|
|
|-
|Rhode Island
|[https://webserver.rilegislature.gov/Statutes/TITLE7/7-6.2/INDEX.htm RI Gen L § 7-6.2-1]
|[https://webserver.rilegislature.gov/BillText17/HouseText17/H6155.pdf HB 6155]
|4 October 2017
|
|-
|Vermont
|[https://law.justia.com/codes/vermont/2012/title11/chapter8/ Vt. Stat. Ann. tit. 11 §§ 1081 to 1092]
|
|1985
|
|-
|Virginia
|[https://legacylis.virginia.gov/cgi-bin/legp604.exe?201+ful+CHAP0673+pdf VA Code § 13.1-346 to 13.1-355]
|[https://legacylis.virginia.gov/cgi-bin/legp604.exe?201+ful+CHAP0673+pdf HB 55]
|6 April 2020
|1 July 2020
|-
|Washington
|Wash. Rev. Code §§ 23.78.010 to 23.78.902
|
|1987
|
|}

====Canada====
Worker co-ops in Canada are represented by the [[Canadian Worker Co-op Federation]] (CWCF). Members of the CWCF are found throughout English Canada.<ref>{{cite web|url=http://www.canadianworker.coop/english/4/index_e412.html|title=Canadian Worker Co-op Federation 'Members'|website=canadianworker.coop|url-status=live|archive-url=https://web.archive.org/web/20060815163038/http://www.canadianworker.coop/english/4/index_e412.html|archive-date=15 August 2006}}</ref>

Ontario has its own federation with well-developed standards.<ref>{{cite web|url=http://www.ontarioworker.coop/what_is_a_worker_coop.htm|title=Ontario Worker Co-op Federation 'What is a Worker Co-op?'|website=ontarioworker.coop|url-status=live|archive-url=https://web.archive.org/web/20070302214216/http://www.ontarioworker.coop/what_is_a_worker_coop.htm|archive-date=2 March 2007}}</ref><ref>{{cite web|url=http://www.canadianworker.coop/english/4/index_e431.html|title=Canadian Worker Co-op Federation 'What is a Worker Co-op?'|website=canadianworker.coop|url-status=live|archive-url=https://web.archive.org/web/20070208093903/http://www.canadianworker.coop/english/4/index_e431.html|archive-date=8 February 2007}}</ref> Quebec has a distinct worker co-operative history, and is presently organised into a number of regional federations.{{Citation needed|date=March 2021}}

====Mexico====
After the revolt on 1 January 1994 from [[EZLN]], the indigenous people in [[Chiapas]] started the reconstruction of their [[Zapatista coffee cooperatives]].<ref>{{cite web|url=http://tangoitalia.com/zapatistas/cafe_coops_en.htm|title=Zapatista coffee|access-date=2 May 2015|url-status=usurped|archive-url=https://web.archive.org/web/20150106114328/http://tangoitalia.com/zapatistas/cafe_coops_en.htm|archive-date=6 January 2015}}</ref>

===South America===

====Venezuela====

[[Hugo Chávez]], in his effort to democratize the workforce, established a lot of worker-owned and operated cooperatives the moment he got into office, in 1998. By 2006, there had been 100,000 worker co-ops set up, which represented around 1.5 million workers. From day one, he made sure to give them cheap start-up credit, technical training, and preferential treatment with government purchases of goods and equipment. Not even a year later, in 1999, he increased the number of co-ops that got tax incentives.<ref>{{cite web |last1=Bowman |first1=Betsy |last2=Stone |first2=Bob |title=Venezuela's Cooperative Revolution |url=http://dollarsandsense.org/archives/2006/0706bowmanstone.html |website=Dollar and Sense: Real World Economics |publisher=Dollar and Sense}}</ref> A 2006 census showed that 50% of the co-ops were either functioning improperly or were simply created just to get access to public funds.<ref name="vene-coop-rev">{{cite web |author1=Betsy Bowman |author2=Bob Stone |title=Venezuela's Cooperative Revolution |url=http://www.dollarsandsense.org/archives/2006/0706bowmanstone.html |work=Dollars and Sense}}</ref>

====Argentina====

{{See also|Recovered factories}}

In response to the [[Argentine economic crisis (1999-2002)|economic crisis in Argentina]], many Argentine workers occupied the premises of bankrupt businesses and began to run them as worker-owned cooperatives. As of 2005, there were roughly 200 worker-owned businesses in Argentina, most of which were started in response to this crisis.<ref>{{Cite web|url=http://upsidedownworld.org/coops_arg.htm|archiveurl=https://web.archive.org/web/20131029220734/http://upsidedownworld.org/coops_arg.htm|url-status=dead|title=Benjamin Dangl, 'Occupy, Resist, Produce: Worker Cooperatives in Argentina'|archivedate=29 October 2013}}</ref> By 2020, around 16,000 Argentine workers were running over 400 recuperated enterprises in Argentina.{{sfn|Vieta|2020|pp=517–519}} The documentary film ''[[The Take (2004 film)|The Take]]'' described this phenomenon journalistically, while Marcelo Vieta's book, ''Workers' Self-Management in Argentina'', provides and extensive academic, case study, and historical account of the phenomenon.{{sfn|Vieta|2020|p={{pn|date=March 2025}}}} The overall survival rate of these recuperated firms is almost ninety percent, displaying the resilience of the model even in times of economic turmoil.{{sfn|Vieta|2020|pp=115–117}}

According to a recent statement by the International Co-operative Alliance, cooperative businesses (most of which are not worker co-ops) in Argentina have nearly 20 million members across a number of business sectors from health care to housing to factory work and beyond. These businesses are increasing in number at a drastic rate, with over 6,000 having been created in 2012 alone.<ref name="2013 ICA report">{{cite web|publisher=International Co-operative Alliance|url=http://ica.coop/en/media/news/argentinas-co-operative-sector-continues-grow|title=Argentinas Co-Operative Sector Continues Grow|access-date=28 October 2013|url-status=live|archive-url=https://web.archive.org/web/20131029201928/http://ica.coop/en/media/news/argentinas-co-operative-sector-continues-grow|archive-date=29 October 2013}}</ref>

Worker-owned cooperatives in Argentina have played a role in developing their surrounding communities. For example, the worker-owners of [[FaSinPat]] voted to use excess profits to establish education programs, healthcare facilities, and recreational activities for its neighborhood.<ref>{{cite book |last1=Gibson-Graham |first1=J. K. |last2=Cameron |first2=Jenny |last3=Healy |first3=Stephen |title=Take Back the Economy: An Ethical Guide for Transforming Our Communities |date=2013 |publisher=University of Minnesota Press |isbn=978-0-8166-7607-1 |jstor=10.5749/j.ctt32bcgj |oclc=880821723 }}{{pn|date=March 2025}}</ref>

The overall number of worker cooperatives within Argentina seems to be at over 23,000.<ref>{{Cite web|url=https://geo.coop/blog/argentinas-worker-co-ops-under-attack|title=Davis, Josh. "Argentina's Worker Co-ops Under Attack"}}{{self-published inline|date=March 2025}}</ref>

===Asia===

====India====
India has a substantial set of laws, rules & regulations for enterprises in the co-operative sector.

The [[Indian Coffee House]]s in India were started by the Coffee Board in the early 1940s, during British rule. In the mid-1950s the Board closed down the Coffee Houses, due to a policy change. The thrown-out workers then took over the branches, under the leadership of [[A. K. Gopalan]] and renamed the network as Indian Coffee House. This history is recorded in [[Coffee Housinte Katha]], a book in [[Malayalam]], the mother tongue of A. K. Gopalan. The author of the book is [[Nadakkal Parameswaran Pillai]] one of the leaders of the ICH movement. Another very large network of worker coops is [[Kerala]] Dinesh Beedi, originally started by exploited beedi rollers.<ref>See T.M. Thomas Isaac, Richard W. Franke, and Pyaralal Raghavan, ''Democracy at Work in an Indian Industrial Cooperative. The Story of Kerala Dinesh Beedi'', Ithaca: Cornell University Press, 1998.{{ISBN?}}{{page needed|date=October 2020}}</ref>

==Comparison with other work organizations==
There are significant differences between ends and means between firms where capital controls labor or firms where the state controls both labor and capital. These distinctions are easily seen when measured by essential elements of commerce: purpose, organization, ownership, control, sources of capital, distribution of profits, [[dividend]]s, operational practices, and tax treatment. The following chart compares the commercial elements of capitalism, state ownership, and cooperative worker-ownership. It is based on US rules and regulations.<ref name="Adams" />

{| class="wikitable"

! Commercial criteria !![[Corporations|For-profit corporations]] !! [[State ownership|State-owned enterprises]] !! Worker cooperatives
|-
! Purpose
| a) To earn profit for owners, to increase the value of shares. || a) To provide goods and services, or hold and manage resources for citizens. || a) To maximize net and real worth of all owners.
|-
! Organization
| a) Organized and controlled by investors <br /> b) Incorporated under relevant incorporation laws – varies by country <br /> c) Except for closely held companies anyone may buy stock <br /> d) Stock may be traded in the public market
|| a) Organized and controlled by state <br /> b) Chartered by relevant level of government <br /> c) No stock <br /> d) n/a
|| a) Organized and controlled by worker-members <br /> b) Incorporated under relevant incorporation laws – varies by country <br /> c) Only worker-members may own stock, one share per member <br /> d) No public sale of stock
|-
! Ownership
| a) Stockholders
|| a) State
|| a) Worker members
|-
! Control
| a) By Investors <br /> b) Policies set by stockholders or board of directors. <br /> c) Voting on basis of shares held <br /> d) Proxy voting permitted
|| a) By state <br /> b) Policy set by government planners. <br /> c) n/a <br /> d) n/a
|| a) By worker-members <br /> b) Policy set by directors elected by worker-members, or by assembly of worker-members <br /> c) One person, one vote <br /> d) Proxy votes seldom allowed
|-
! Sources of capital
| a) Investors, banks, pension funds, the public <br /> b) From profitable subsidiaries or by retaining all or part of the profits
|| a) The state
|| a) By members or by lenders who have no equity or vote <br /> b) From net earnings, a portion of which are set aside for reinvestment
|-
! Distribution of net margin
| a) To stockholders on the basis of the number of shares owned || a) To the State || a) To members after funds are set aside for reserves and allocated to a collective account
|-
! Capital dividends
| a) No limit, amount set by owner or Board of Directors || a) n/a || a) Limited to an interest-like percentage set by policy
|-
! Operating practices
| a) Owners or managers order production schedules and set wages and hours, sometimes with union participation <br /> b) Working conditions determined by labor law and collective bargaining.
|| a) Managers order production schedules and set wages and hours, sometimes with union participation <br /> b) Working conditions determined by labor law and collective bargaining
|| a) Workers set production schedules either through elected boards and appointed managers or directly through assemblies <br /> b) Working conditions determined by labor law and assembly of worker-members, or internal dialogue between members and managers.
|-
! Tax treatment
| a) Subject to normal corporate taxes || a) n/a || a) Special tax treatment in some jurisdictions
|}

==See also==

{{div col|colwidth=18em}}
* [[Market socialism]]
* [[Codetermination]]
** [[Worker representation on corporate boards of directors]]
* [[Employee-owned corporation]]
* [[Employee stock ownership]]
* [[Industrial democracy]]
* [[Social ownership]]
* [[Syndicalism]]
* [[Workers' control]]
* [[Economic democracy]]
* [[Economics of participation]]
* [[Voluntary association]]
* [[Artel]]
* [[Collectives]]
* [[Benefit Corporation]]
* [[Democratic education|Democratic Education]]
* [[Housing cooperative|Housing Cooperative]]
* [[Employee ownership]]
* [[Workers' self-management]]
* [[Workers' control]]
* [[Workplace democracy]]{{div col end}}

;Other workers' cooperative thinkers
{{div col|colwidth=18em}}
* [[Michael Albert]]
* [[Hilaire Belloc]]
* [[Kevin Carson]]
* [[G. K. Chesterton]]
* [[G.D.H. Cole]]
* [[Robert A. Dahl]]
* [[Sam Dolgoff]]
* [[Noam Chomsky]]
* [[John Stuart Mill]]
* [[Gregory Dow]]
* [[David Ellerman]]
* [[Charles Gide]]
* [[David Griffiths (co-operative economist)|David Griffiths]]
* [[George Holyoake]]
* [[Derek C. Jones]]
* [[William King (doctor)|William King]]
* [[Naomi Klein]]
* [[Michael Moore]]
* [[Robert Owen]]
* [[James Meade]]
* [[Mario Bunge]]
* [[Carole Pateman]]
* [[Friedrich Wilhelm Raiffeisen]]
* [[Rochdale Pioneers|The Rochdale Pioneers]]
* [[David Schweickart]]
* [[José María Arizmendiarrieta]]
* [[E. F. Schumacher]]
* [[Stephen C. Smith (economist)|Stephen C. Smith]]
* [[Roger Spear]]
* [[Leland Stanford]]
* [[Jaroslav Vanek]]
* [[Beatrice Webb]]
* [[Sidney Webb]]
* [[William Foote Whyte]]
* [[Richard D. Wolff]]
{{div col end}}

;Videos about workers' cooperatives
* ''[[Anarchism in America (film)|Anarchism in America]]''
* ''[[Capitalism: A Love Story]]''
* ''[http://www.mightysmallfilms.com/This_Way_Out.html This Way Out: A Guide to Starting a Worker Cooperative. (and other films by Jai Jai Noire, Mighty Small Films)]''
* ''[https://www.youtube.com/watch?v=yZHYiz60R5Q&ab_channel=UnlearningEconomics Worker Democracy (YouTube video by Unlearning Economics), comprehensive review of the economic literature on worker cooperatives]''

==Notes==
{{notelist}}

==References==
{{reflist}}

==Sources==
* {{cite book |doi=10.1163/9789004268951 |title=Workers' Self-Management in Argentina |date=2020 |last1=Vieta |first1=Marcelo |isbn=978-90-04-26896-8 }}

==Further reading==
* ''For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America'', PM Press, by John Curl, 2009, {{ISBN|978-1-60486-072-6}}.
* {{in lang|fr}} Créer en Scop, le guide de l'entreprise participative, Ed Scop Edit 2005 (disponible gratuitement sur [http://www.scop.coop le site de la CG SCOP]. {{Webarchive|url=https://web.archive.org/web/20110111181147/http://www.scop.coop/ |date=11 January 2011 }}).
* {{in lang|fr}} Histoire des Scop et de la coopération, Jean Gautier, Ed Scop Edit, 2006 (DVD).

==External links==
* {{official website|http://www.cicopa.coop/}}
* [http://www.geo.coop/about GEO.Coop]
* [https://nycworker.coop/ NYCWorker.Coop]
* [https://usworker.coop/about/ USWorker.Coop]

{{Co-operatives|types}}
{{Authority control}}

{{DEFAULTSORT:Worker Cooperative}}
[[Category:Worker cooperatives| ]]
[[Category:Business models]]
[[Category:Market socialism]]
[[Category:Mutualism (movement)]]
[[Category:Socialism]]
[[Category:Types of organization]]

[[ta:தொழிலாளர் கூட்டுறவு]]