The History of Worker Cooperatives

Worker Cooperatives

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.

The Industrial Revolution

The Industrial Revolution played a significant role in the creation and development of worker cooperatives in several ways. While the Industrial Revolution brought about significant changes in the nature of work and employment, it also created the conditions that led workers to seek alternatives like cooperatives.

As factory workers endured grueling hours, meager wages, and unsafe workplaces, they began to demand better treatment and collectively organize for improved labor rights.

Rochdale Society of Equitable Pioneers

The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumers’ co-operative, and one of the first to pay a patronage dividend, forming the basis for the modern co-operative movement. Although other co-operatives preceded it, the Rochdale Pioneers Co-operative became the prototype for societies in Great Britain. The Rochdale Pioneers are most famous for designing the Rochdale Principles, a set of principles of co-operation, which provide the foundation for the principles on which co-ops around the world operate to this day.

The 7 Cooperative Principles

The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England, and have formed the basis for the principles on which co-operatives around the world continue to operate. The implications of the Rochdale Principles are a focus of study in co-operative economics.

The original Rochdale Principles were officially adopted by the International Co-operative Alliance (ICA) in 1937 as the Rochdale Principles of Co-operation. Updated versions of the principles were adopted by the ICA in 1966 as the Co-operative Principles and in 1995 as part of the Statement on the Co-operative Identity.

  •  Voluntary and Open Membership
  • Democratic Member Control
  • Member Economic Participation
  • Autonomy and Independence
  • Education, Training & Information
  • Cooperation Among Cooperatives
  • Concern for Community

“Building a cooperative economy is one small step on the journey to reclaiming the wealth we all collectively create.”

Movement of Worker Cooperatives within the United States

Worker Cooperatives gained significant momentum in the 1960s and 1970s, driven by by social and cultural upheaval, with movements for civil rights, women’s rights, and anti-war activism. This climate of social change extended to economic and workplace issues, leading to an increased interest in alternative economic models, including worker cooperatives.

Benefits of worker Cooperatives

 

Employee ownership can improve company performance, increase firm stability, increase survival rates and reduce layoffs during a crisis. 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.

Comparison between For-Profit Corporations

VS

Worker Cooperatives

For-Profit Corporations Worker Cooperatives
Purpose

To earn profit for owners, to increase the value of shares.

To maximize net and real worth of all owners.

Organization

Organized and controlled by investors

Incorporated under relevant incorporation laws – varies by country

Except for closely held companies anyone may buy stock

Stock may be traded in the public market

Organized and controlled by worker-members

Incorporated under relevant incorporation laws – varies by country

Only worker-members may own stock, one share per member

No public sale of stock

Ownership

Stockholders

Worker members

Control

By Investors

Policies set by stockholders or board of directors.

Voting on basis of shares held

Proxy voting permitted

By worker-members

Policy set by directors elected by worker-members, or by assembly of worker-members

One person, one vote

Sources of Capital

Investors, banks, pension funds, the public

From profitable subsidiaries or by retaining all or part of the profits

By members or by lenders who have no equity or vote

From net earnings, a portion of which are set aside for reinvestment

Ditribution of Net Margin

To stockholders on the basis of the number of shares owned

To members after funds are set aside for reserves and allocated to a collective account

Captial Dividends

No limit, amount set by owner or Board of Directors

Limited to an interest-like percentage set by policy

Operating Practices

Owners or managers order production schedules and set wages and hours, sometimes with union participation

Working conditions determined by labor law and collective bargaining.

Workers set production schedules either through elected boards and appointed managers or directly through assemblies

Working conditions determined by labor law and assembly of worker-members, or internal dialogue between members and managers.

 

As of 2023, there are at least 

465 worker cooperatives in the U.S. with 6,454 workers. 

Here’s a list of a Worker Co-op products and services from across the country.

 

Find a Worker Co-op near you here 

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A Brief History of our Grocery Co-op Neighbors

October is Co-op Month and Cooperation Among Cooperatives is Cooperative Principle #6 (that sentence is a mouthful). The year 2022 is also the 50th Anniversary of the formation of the buying club that eventually became the Davis Food Co-op. Since we have already explored 50 Changes over the past 50 Years of our Co-op and have Looking Back: A Davis Food Co-op History (1972-1984) available for your viewing pleasure, we wanted to take this opportunity to let you know a little bit more about our local grocery co-op neighbors in the Greater Sacramento region! You may find yourselves in any one of these cities from time-to-time and when you do, we definitely encourage you to check them out.

Sacramento Natural Foods Co-op

Our cooperative cousins across the Causeway (another mouthful) started in a very similar fashion to the DFC. Also started as a buying club in 1972, they first opened a storefront of primarily bulk foods at 16th and P Streets in downtown Sacramento. They officially incorporated in 1973 as the Sacramento Natural Foods Cooperative and from there, a Board of Directors was elected and the first paid employee was hired. 

(Side note: An important distinction for co-ops to make is when they crossover from being a buying club to an actual incorporated cooperative. While we got our start as a buying club in 1972 and claim that as our foundation for our 50th Anniversary, our official incorporation process did not begin until 1977 and was not completed until 1981. Other co-ops, like SNFC, instead choose to mark the start of their incorporation as an officially recognized cooperative as their anniversary date. Like with all things co-op, this is the beauty of differences between each one!)

The SNFC spent 43 years at multiple locations in Sacramento before moving to its current location at 28th and R streets in Midtown Sacramento in 2016. As a natural foods store, they are known for their standards that products must abide by to hit their shelves. This includes, among other criteria

  • Unprocessed foods such as 100% organic produce, whole grains, nuts, and beans.
  • Products that are minimally refined or processed.
  • Foods that meet the needs of special diets such as wheat-free, sugar-free, dairy-free, salt-free, gluten-free and vegan.
  • Animal products that are raised or produced in a humane manner, using sustainable methods; for example, through free range rearing and by organic standards

BriarPatch Food Co-op

Another 70s baby in the Greater Sacramento region is BriarPatch Food Co-op in Grass Valley. Their first retail store opened in 1976 when their early founders restructured their buying club to look more like co-ops they had seen in the Bay Area at the time (their name even came from a former co-op in Menlo Park!). Like most co-ops at the time (including ours), the store was open only to Members who were required to volunteer time working at the store as well. 

After three location moves and a steady increase of sales and Membership over the years, BriarPatch opened its current location in 2007 off the Sierra College roundabout. BriarPatch has since released a 2025 Sustainability Goals Plan to achieve 100% renewable energy and 100% of food waste diverted from landfills by 2025. They are also in the process of opening up a second location in Auburn!

Placerville Food Co-op

The newest kid on the co-op block in our region is Placerville Food Co-op. Unlike the others in this blog that started as buying clubs in the 70s, PFC’s story began much more recently in 2008 when their planning process began. It took only three years for that planning to become reality with the store opening to the public in October 2011. Since then, they have surpassed 2,000 Owners of their co-op and they are continuing to grow! With that growth has come the need for some renovations at the store. PFC is looking to complete these renovations with some help from their community and the co-op community as a whole. If you find it within your means, they are asking for donations here.

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