Editing Cooperative (section)

== Working conditions ==
Cooperatives have been traditionally seen as an alternative to the traditional business model, in which a capitalist has the private ownership of the monetary capital and of the [[means of production]] and workers have to sell their [[labor force]] to the capitalist to earn a salary.

Cooperatives are often said to offer better [[working conditions]] than regular firms.<ref name=":8">{{Cite web |title=What do we really know about worker co‑operatives? {{!}} Co-operatives UK |url=https://www.uk.coop/resources/what-do-we-really-know-about-worker-co-operatives |access-date=2023-07-22 |website=www.uk.coop |language=en}}</ref> This is demonstrated by the fact that cooperatives have a lower turnover rate (rate of workers leaving a firm) compared to regular firms.<ref name=":0">{{Cite web |title=How Economic Democracy Impacts Workers, Firms, and Communities {{!}} Democracy at Work Institute |url=https://institute.coop/resources/how-economic-democracy-impacts-workers-firms-and-communities |access-date=2023-07-22 |website=institute.coop}}</ref> However, cooperatives do not always show improved working conditions compared to traditional businesses. In fact, the different nature of cooperatives imply that the nature of the working conditions within the cooperatives is also different.

According to [[Kunle Akingbola]], working conditions are "the core elements of work&nbsp; relationships determined by the social, psychological, and physical factors that influence the workplace and the interaction that employees experience at work" and "typically include the nature of employment, working hours, job characteristics, compensation, work interactions, physical work environment, and written and unwritten work expectations".<ref>{{Cite web |title=Working Conditions and Wages in the Social and Solidarity Economy |url=https://knowledgehub.unsse.org/knowledge-hub/working-conditions-and-wages-in-the-social-and-solidarity-economy/ |access-date=2023-07-22 |website=SSE Knowledge Hub for the SDGs |language=en-US}}</ref>

According to [[Pam a Pam]],<ref name=":6">{{Cite web |title=Criteris |url=https://pamapam.org/ca/criteris/ |access-date=2023-07-22 |website=Pam a Pam |date=25 May 2017 |language=ca}}</ref> a cooperative has good working conditions when it has stable contracts, working days consistent with the volume of tasks, and offers a higher salary than the established in the collective agreement of the sector.

=== Wages ===
In 2021, Hanson and Purushinkaya performed a survey on working conditions of cooperatives in the US,<ref name=":0"/> in which cooperativists expressed that they were making wages above the minimum for good living conditions. According to the report, they received, on average, $3.52 /hour more than at their previous job.

Research shows that, in the US, the 77% of the cooperatives have a 1:1 or 2:1 [[Wage ratio|top-to-bottom pay ratio]], whereas the average large corporation in the US has a CEO-to-worker pay ratio of 303:1.<ref name=":0"/> This means that in worker's cooperatives there is much more distribution of wealth between the members of the cooperatives, which means that workers that are at the bottom of the organizational pyramid make more money than workers that are at the bottom of the pyramid but that are in conventional firms.

Research also shows that the effect of output price changes on wage variations is positive for both conventional firms (CF) and cooperatives (WC), but larger in WCs than in CFs.<ref name=":1">{{Cite journal |last1=Burdín |first1=Gabriel |last2=Dean |first2=Andrés |date=1 December 2009 |title=New evidence on wages and employment in worker cooperatives compared with capitalist firms |url=https://www.sciencedirect.com/science/article/pii/S0147596709000560 |journal=Journal of Comparative Economics |language=en |volume=37 |issue=4 |pages=517–533 |doi=10.1016/j.jce.2009.08.001 |issn=0147-5967}}</ref> This means that, because the distribution of wealth is much greater in WCs, an increase in the benefits of a WC usually is reflected in a proportional increase in the wages, whereas in CF this increase in the wages is much smaller (since the wealth is accumulated by people in the higher position, or is saved for new corporate investments).

However, the fact that the wealth is distributed between the already hired workers has the downside of preventing the cooperatives of hiring more workers, thus having a rate of creation of new jobs that is lower than CF. However, in WC changes on output prices does not translate in more employment, whereas in CF it does (CF create less employment).<ref name=":1" />

Research shows that in times of crisis, employment and wages are more protected in WC than in conventional firms;<ref name=":1" /> since the focus of WCs is on protecting employment and because the workers that control the WC do not want to lose their jobs, WC are generally more willing to protect them. This does not happen so much in CF, where the focus is on maintaining the margin of benefits and not employment, which is considered a cost in times of crisis.

Research also shows that the difference of wages between workers hired by the cooperative and workers that are members of the cooperative is small (a worker can work for the cooperative but not be a member of it).<ref name=":1" /> Two explanations have been proposed: the first one is that the spirit of cooperativism also extends to hired workers; and the second that sometimes employees are needed for highly skilled jobs, which provides them with strong bargaining power enabling them to defend their employment positions and to compensate for their lack of formal control rights over the firm.<ref name=":1" />

=== Stability of contracts ===
The formation of cooperatives has been used many times to create jobs in economically depressed sites. The communalization of wealth in poor areas often allows them to make the first investment in capital, which allows them to set the cooperative and start having benefits, thus producing an inflow of wealth in the community, which then is redistributed within the members of the cooperatives. This scheme of using cooperatives to create wealth and job opportunities in depressed areas has been famously used, for example, by the [[Mondragon Corporation]], which has provided long term stable jobs for the population of [[Mondragon, Spain|Mondragon (Euskadi)]] since the mid 50s.

The focus that cooperatives have in protecting jobs is reflected in research. Hanson and Prushinkaya have shown that, in the US, turnover rates are lower in WC than in CF (the turnover rate is the percentage of employees leaving a company within a certain period of time).<ref name=":0" /> Jobs at workers' cooperatives tend to be longer term.<ref name=":2">{{Cite web |title=First Global Report on "Cooperatives and Employment" – CICOPA |url=https://www.cicopa.coop/publications/cooperatives-and-employment-first-global-report/ |access-date=2023-07-22 |website=www.cicopa.coop|date=19 November 2014 }}</ref>

There are several explanations for this: higher compensation and wages for workers; higher job satisfaction; greater adaptability to crisis and economic difficulties, etc.

Research shows that WC show higher adaptability to crisis and economic hardships than CF.<ref name=":3">{{Cite journal |last1=Cristini |first1=Annalisa |last2=Grasseni |first2=Mara |last3=Signori |first3=Silvana |date=15 July 2023 |title=Can worker cooperatives stabilize employment and remain financially sound during a prolonged recession? |url=https://www.tandfonline.com/doi/full/10.1080/00036846.2022.2118963 |journal=Applied Economics |language=en |volume=55 |issue=33 |pages=3863–3883 |doi=10.1080/00036846.2022.2118963 |s2cid=252503792 |issn=0003-6846}}</ref> During negative demand shocks, WCs contain employment drop and allow a greater downward wage adjustment<ref name=":3" /> (the workers themselves decided to lower their own wages to keep the jobs). Another adaptability mechanism is the mutual support between WCs.<ref name=":4">Corcoran, H.; Wilson, D. (2010). The Worker Co-operative Movements in Italy, Mondragon and France: Context, Success Factors and Lessons. Canadian Worker Cooperative Federation Fédération Canadienne des Coopératives de Travail</ref> The case of Cooperativa Mondragón is paradigmatic in this sense: during the 80s, some cooperatives were experiencing financial difficulties, and Mondragon redeployed workers in the struggling co-operatives to ones that were better off.<ref name=":4" /> Those who were not redeployed were given income assistance that equaled 80% of their salary.<ref name=":4" /> The central control structure of Mondragon allowed for this to happen. This would have been unlikely to happen in unorganized and autonomous co-operatives.<ref name=":4" /> This same scheme to save employment prevented [[Fagor]] cooperative workers from losing their jobs when Fagor went bankrupt: they were relocated to other cooperatives of the Mondragon group.<ref name=":4" />

=== Workload ===
Overworking due to the need for competitiveness applies to cooperatives as well. Some authors argue that the limitation of working hours in a cooperative should only apply for non-members workers of the coop (hired workers), whereas member workers should be allowed to work as much as they want, allowing the cooperative to collectively take those kind of decisions if they only apply to member workers.<ref>{{Cite web |date=22 August 2012 |title=Employment Law |url=https://www.co-oplaw.org/knowledge-base/employment-law/ |access-date=2023-07-22 |website=Co-opLaw.org |language=en-US}}</ref>

=== Internal democracy ===
{{See also|Workplace democracy}}According to Pam a Pam,<ref name=":6" /> having internal democracy is not limited to having communal spaces of debate and decision making, but also ensuring that the participation in those spaces is not limited by issues of positionality, privilege, or rank.<ref name=":6" />

For example, one of the basic issues with internal democracy is to make sure that every worker has access to all the information of the cooperative, and that is aware of every debate that is happening within the cooperative. It is important to make sure that all important decisions are taken in formal spaces, and avoid using informal spaces in which not everyone might be present to take those decisions.

This issue of having access and voice in the formal spaces for decision making of the cooperative becomes more important the bigger the cooperative gets. Research shows that,&nbsp; in larger cooperatives, member participation is lower than in smaller cooperatives, and there is a deterioration of internal democracy and working conditions for cooperative members and employees.<ref>{{Citation |last=Semenzin |first=Devi Sacchetto, Marco |title=Workers' cooperatives in Italy: Between solidarity and autocratic centralism |date=2015 |url=https://www.taylorfrancis.com/chapters/edit/10.4324/9781315718286-10/workers-cooperatives-italy-devi-sacchetto-marco-semenzin |work=Social Economy in China and the World |access-date=2023-07-22 |publisher=Routledge |doi=10.4324/9781315718286-10 |isbn=978-1-315-71828-6}}</ref>

[[Mark Kaswan]] describes [[William Thompson (philosopher)|William Thompson]]'s theory concerning cooperatives as: "[T]he cooperative structure alters the socio-economic relations of their members, aligning their interests with one another on the basis of a strong principle of equality. It is this alignment of interests on the basis of equality that gives cooperatives their strongly democratic character."<ref name=":7">{{Cite journal |last=Kaswan |first=Mark J. |date=3 July 2014 |title=Developing democracy: cooperatives and democratic theory |journal=International Journal of Urban Sustainable Development |language=en |volume=6 |issue=2 |pages=190–205 |doi=10.1080/19463138.2014.951048 |s2cid=154552606 |issn=1946-3138|doi-access=free |bibcode=2014IJUSD...6..190K }}</ref> According to Kaswan himself, internal democracy is mostly defined by the type and the size of the cooperative.<ref name=":7" />

Mark Kaswan argues that the type of activity developed by a cooperative is one of the main factors that determines how democratic it is. For example, in worker cooperatives, the workers spend a lot of time in contact with each other, having a high level of both interaction and interdependency. In consumer's cooperatives, both the frequency and the intensity of the encounters is lower, thus reducing their democratic participation.<ref name=":7" />

The size of the cooperative is considered to be one of the most important factors for internal democracy. For example, [[Robert Dahl]] argues that, as paraphrased by Kaswan, "assembly-style direct democracy can only effectively function in fairly small organisations".<ref name=":7" /><ref>{{Cite book |last=Dahl |first=Robert A. |url=https://books.google.com/books?id=piQGEAAAQBAJ&pg=PP1 |title=On Democracy |date=24 November 2020 |publisher=Yale University Press |isbn=978-0-300-25405-1 |language=en}}</ref> Kaswan states: "Increasing size also increases the complexity of management. [...] This can lead to the problem of 'managerialism', or the development of powerful officials whose concerns and interests may be different from those of common members." If the manager is already a worker-member of the cooperative, the problem might be resolved; but if the manager is hired specifically for managerial purposes, some hierarchies can arise. The contradiction with the issue of size comes with the social impact of the cooperative: greater size usually means greater social impact, but also has a toll on internal democracy.

==== Suggestions to improve internal democracy within a cooperative ====
{{how-to|section|date=April 2024}}
* Facilitation of all meetings/assemblies is rotated among all members of the coop; training and coaching in facilitation will be provided.
* Permanent and external facilitation (from a specialized process work paradigm external coop) on emotions, conflicts of power, informal hierarchies.
* Any decision made by a coop member can be recalled if 50% of coop members request it.
* Create a space where members can propose improvements and a committee reviews and prioritizes them.
* Revise periodically how the flow of information goes, and see if there are individuals or segments of the coop excluded from this flow, for whatever reason (lack of proper access, unclear messages, technical jargon, excessive workload, etc.), and define collective measures to define what is relevant information (and what is not) and guarantee a full access to it.

=== Legal status of cooperative workers: employees or employed? ===
There is a legal debate on whether to consider being a member of a cooperative as a formal worker or not. For instance, it has been claimed that "the relationship of the worker-member with their cooperative should be considered as distinct from that of conventional wage-based dependent work and self-employed work". Some authors argue that cooperatives should have their own legal status differentiated from the legal status of a conventional firm, in order for them to get recognition and adapt the law to its unique features.<ref name=":12">{{Cite journal |last=Fajardo García |first=Gemma |date=2021 |title=Associated work in a cooperative is neither dependent work nor selfemployed work |url=https://dialnet.unirioja.es/servlet/articulo?codigo=8239387 |journal=CIRIEC – España. Revista de economía pública, social y cooperativa |issue=103 |pages=315–335 |doi=10.7203/CIRIEC-E.103.20685 |s2cid=244881436 |issn=0213-8093|doi-access=free |hdl=10550/90859 |hdl-access=free }}</ref>

In [[Argentina]], lawyers have debated whether the relationship between members in the worker cooperative also constitute an employment relationship to which the rules governing pais dependent work are applicable. Some say yes, mainly based on the argument that participation in the management and direction is not incompatible with the condition of subordination and that the individual is subordinated to the majority vote. However, other interpretations say that the link between members and the worker cooperatives is not a labor relation. In many law cases it has been widely adopted that the size of the cooperative is decisive for this question since the personal contribution of members is more important in small cooperatives.

In the US, the [[Internal Revenue Service]] determines whether a worker is an independent contractor by considering the degree that the worker:<ref>Publication 1779 (Rev. 3-2023) Catalog Number 16134L Department of the Treasury Internal Revenue Service www.irs.gov</ref>
* Receives less extensive instructions on the work to be done, but not how it should be done;
* Receives training from the business about required procedures and methods;
* Has significant investment in the work;
* Is not reimbursed for some business expenses;
* Has the opportunity to realize a profit or incur a loss;
* Receives benefits from the business;
* Has a written contract that shows the relationship the worker and business intend.

The following factors are generally considered when determining whether an employment relationship exists under the FLSA:
* Is the worker performing work that is an integral part of the business?
* Do the worker's managerial skills affect the worker's opportunity for both profit and loss?
* What kinds of investment does the worker make in facilities and equipment compared to the employer?
* Does the worker exercise independent business judgement and initiative?
* Is the relationship with the employer indefinite, which suggests an ongoing employee relationship?
* What kind of control does the employer have about how the work is performed, pay amounts, hours worked, and whether the worker is free to also work for others and hire helpers?

=== The problem of labour fraud ===
However, the recognition of cooperatives as different entities than conventional firms sometimes creates a legal void that has been used regularly for labour fraud.<ref name=":2" /> For example, in Spain, cooperatives are not subjected to the sectoral collective agreements of each sector.<ref name=":5">{{Cite web |last=Aragonés |first=Vidal |date=22 September 2019 |title=Falses cooperatives: un atac al cooperativisme i a les treballadores |url=https://catarsimagazin.cat/falses-cooperatives-un-atac-al-cooperativisme-i-a-les-treballadores/ |access-date=2023-07-22 |website=Catarsi |language=ca}}</ref> In some cases, businesses take the form of a cooperative to avoid being subjected to collective agreements gained through trade unionism and [[syndicalism]], thus being able to pay lower or have worse labor conditions than the ones stipulated in the collective agreement, while at the same time retaining the same power and salary pyramids.<ref name=":2" />

Many cooperatives are accused of being instruments to be used to lay off workers, to out-source and to exploit workers and small producers. The "cooperativatisation" of both public and private sector activities in some countries has been accompanied by a deterioration of working conditions. This is due both to the perversion of the cooperative form and to weak labour regulations applied to these kinds of work forms.<ref name=":2" />

Usually, the law establishes that a cooperative is required to have a minimum percentage of workers-owners (usually 33%). Cooperatives can hire workers that are not part of the cooperative, but the law usually establishes a maximum amount of time that they can work in the cooperative without being members of it; after that, cooperatives are legally obliged to make those workers part of the cooperative. Some cooperatives commit labour fraud because they either have a smaller percentage of cooperativised workers than mandated by law, or they have people working without becoming members for more time than legally allowed.<ref>{{Cite web |date=1 March 2007 |title=La CGT desvela el fraude masivo en el uso de las cooperativas |url=https://www.lavozdegalicia.es/noticia/pontevedra/pontevedra/2007/03/01/cgt-desvela-fraude-masivo-uso-cooperativas/0003_5592044.htm |access-date=2023-07-22 |website=La Voz de Galicia |language=es}}</ref>

In Spain, since the law does not subject cooperatives to the collective agreements or to the [[Social security in Spain|social security]] regulations, the following scheme has been used: if a business wants to pay less than what the sector agreement of its economic sector establishes, the business can create a cooperative, which is not subjected to it, hire all the workers using that cooperative, and then outsource the activity to this cooperative. In this way, instead of having to hire all the workers directly (thus having to pay the Social Security fees and the minimum wage established by the collective agreement), the company only has to use the cooperative as a [[shell company]], and in this way it does not have to pay according to the agreement, and since the workers are hired by the cooperative and not by the company, they are not subject to the either the sector agreement or social security.<ref name=":5" /> This is the case, for example, of Spain's [[Servicarne Coop]], hired by meat industries such as [[Coren (meat company)|Coren]] and [[Sada (meat company)|Sada]], which according to the [[Audiencia Nacional]] "does not carry out a cooperative activity" and "has not been established with the purpose of fulfilling the objectives set forth in the Cooperatives Law [...] but only with the aim of obtaining certain benefits that are linked to it, creating a merely formal appearance of a cooperative", for example, to avoid paying the Social Security fees.<ref>{{Cite web |last=Bárcena |first=Selina |date=9 May 2023 |title=La Audiencia Nacional confirma que Servicarne es una "falsa cooperativa" |url=https://elpais.com/economia/2023-05-09/la-audiencia-nacional-confirma-que-servicarne-es-una-falsa-cooperativa.html |access-date=2023-07-22 |website=El País |language=es}}</ref><ref>{{Cite news |last1=Gómez |first1=Manuel V. |last2=Sevillano |first2=Elena G. |date=2 May 2019 |title=Trabajo retira la licencia a la "falsa cooperativa" cárnica Servicarne por fraude |language=es |work=El País |url=https://elpais.com/economia/2019/05/02/actualidad/1556826727_472578.html |access-date=2023-07-22 |issn=1134-6582}}</ref>

Potential solutions to this fraudulent usage of workers' cooperatives have been suggested, such as covering the legal void that allows this to happen,<ref name=":2" /> creating cooperative federations that ensure the cooperative identity and its regular functioning, etc.

=== Suggestions to improve workers' conditions within a cooperative ===
{{how-to|section|date=April 2024}}
* Flexible scheduling.
* Remote work for all staff, with the possibility to do the full working week that way, but also putting some mandatory in-person moments for everyone (conflict resolution, first meetings with new employees, farewell for leaving employees, conflict resolution, strategically and/or politically relevant and/or difficult meetings, celebrations in the coop).
* All time on worker cooperative business is paid.
* Equal pay for all positions (assuming a balanced share of responsibility and job complexity).
* 40 days of vacation (at least).
* Safe and regenerative working place. Applications based on biomimicry and biophilia to promote natural, healthy and diverse environments (different places for calmness, meditation, creativity, stimuli, team bond generation, individual reflection, exercise, connection with nature, water, plants, art, etc.).