Pandemic Crash Shows Worker Co-ops Are More Resilient Than Traditional Business

“It does the opposite of what a traditional firm does,” says Esteban Kelly, executive director of the U.S. Federation of Worker Cooperatives, an organization supporting the worker cooperative movement, and of which the TESA Collective is a member. “Traditional firms, when times are good, they take that surplus, they distribute it to the investors or maybe pay off debt, but they don’t necessarily do a lot of bonus pay for rank-and-file or increase wages,” Kelly told Truthout. “When times are bad, they panic. And then maybe they get bailed out, maybe they declare bankruptcy … but it’s basically a model of austerity. They’re slashing jobs and benefits.”

Kelly explains that on the other hand, when worker-owned businesses are doing well, they share the benefits among worker-owners. This is most commonly achieved by increasing wages, expanding benefits, distributing dividends to the employees (instead of absentee stockowners) and reinvesting in their communities. But when business is tough, a worker cooperative equitably shares the burden. Instead of mass layoffs, the workers, who are the equal owners, strive to find collective solutions.

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