In my experience the opposite is almost always true:
> Somehow finances have to work, which is usually a harsh reality for some
At most places I've been involved in the workers are more careful with money because they are standing together and want the business to succeed. They have transparency into the finances, so they know what's possible and try to make sure not to go overboard.
> Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual.
All of the worker owned places I've been have been exactly this: creative, interesting, and individual. These aren't giant chains designed in a megacorp boardroom.
> I don't see this working in the long term unfortunately unless a majority of the workers have a lot experience with business, especially something as cashflow-sensitive as a restaurant (which typically operate on razor-thin margins). But I do wish them luck in their experiment.
There are many of these and though I don't know the success rate compared to hierarchical businesses in the food industry in particular, co-ops have a higher success rate than hierarchical businesses in general and there's been a lot of research into it, though I don't know if an exact "why" has ever been established. I suspect it's that there's no handful of individuals who can get greedy and ruin things by trying to maximize profit. Even for-profit co-ops generally have a better sense of balance since the workers don't want their business to dry up and if one person gets greedy there are lots of other people to keep them in check.
> At most places I've been involved in the workers are more careful with money because they are standing together and want the business to succeed.
This doesn't contradict anything GP said. Worker owners are careful with company money because they have to be, due to being invested into it. That's a responsibility that not everyone wants, especially when an organization approaches the scale of tragedy of the commons. How many regular voters bother to read the raw, uneditorialized finances that the government provides?
> co-ops have a higher success rate than hierarchical businesses
This is only true when you're defining success as a binary "does this company still exist." Worker-owned companies are significantly less likely to expand because they would be creating risk but would have to share the additional profits with the new hires. This would especially be the case for a restaurant which doesn't benefit from economies of scale (see Publix supermaket as an example of a worker-owned corporation that does).
Even if Jude's can sustainably pay $30/hour, it would take hundreds of similar restaurants to match the success of a single "nice" privately owned restaurant chain like In-and-Out, which also pays above-market wages to thousands of employees, albeit not as above market as Jude's.
> This is only true when you're defining success as a binary "does this company still exist." Worker-owned companies are significantly less likely to expand
Why would that be a criteria of “success”, though? A worker owned business capable of supporting all its employees and maintaining itself long term is definitionally a success.
The notion that everything has to expand is a product of our investor-driven economy. I think it's unhealthy. I'd much rather have a million local business than one giant megacorp.
The existence of a few restaurant co-ops doesn't preclude the existence of a soulless megacorp like McDonald's. If your goal is to give more people a fair wage, it's much more effective to expand as much as possible.
When talking about the model itself, success could be defined as the proportion of business operating under that model. If the model is successful for all parties involved, it would be logical that more and more restaurant move to a co-op system.
Worker co-ops aren't less likely to expand because of risk, it's because more employees diluted the pie, so they don't have an incentive to grow for the sake of growth, but only if there are significant economies of scale or social need.
why should this new employee automatically dilute the pie before their "worth" is made real (by virtue of working and contributing to the bottom line)?
if adding this new employee creates more value, the existing owners shouldn't have a problem with adding. Of course, unless the employee start owning their share before being first able to be vetted.
Well if they start hiring “non share packages employees” it kinda stops sounding like worker owned and more like owners and workers, eh? Seems to defeat the purpose of being worker owned.
Maybe if you have a vesting period of something. But even then it is one employee, one vote or is voting dependent on something else like number of shares?
Just because the name says worker co-op doesn't mean every employee has to be vested.
In the Netherlands a coop is an acutal legal structure that businesses may adopt. It will surprise you to hear that we even a big bank which is: A co-op.
The core characteristic of a co-op isn't that the workers all have shares. It's that they have members and that the members instead of the shareholders may receive payouts based on the company income.
I realize this is different than the American case of a worker co-op. Your reaction though speaks to me that you don't consider this a serious form a company might take. Whereby you ignore that some very big and wealthy companies are in fact co-ops. I assert that this is merely because the US legal systems don't facilitate co-ops, and I wonder whether that isn't a missed opportunity?
It will surprise you to hear that we even a big bank which is: A co-op.
There are lots of those types of co-op banks in the US, as well as other large businesses run as the type of co-op you're talking about. That is however a competently different thing than what is being discussed here.
I used to like the idea that the Rabobank is a co-op, but it actually seems to be the least ethical of all the Dutch banks right now. The screwed farmers into taking loans for bad investments, and completely refuse to take their social responsibility seriously, which has become an important thing for banks after 2008.
Why cant they hire non share packaged employees? Why do they have to shrink their pie?
How many non-owner workers can you have before you stop being worker-owned? If four workers own 25% of the shares each, and the company employs 400 (or 4000) people are they still "worker-owned" in any meaningful sense?
I think it's not perfectly black and white, and we shouldn't really put some arbitrary line here. Would be nice if more worker-owned businesses shared details about their ownership structure, though.
Yes, and they put a fair degree of effort into making it accessible. One good place to start might be with the Treasury’s fiscal data site [0].
As their plucky little public outreach page [1] points out:
“A regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
U.S. Constitution, Article 1, Section 9
> Somehow finances have to work, which is usually a harsh reality for some
At most places I've been involved in the workers are more careful with money because they are standing together and want the business to succeed. They have transparency into the finances, so they know what's possible and try to make sure not to go overboard.
> Consumers despite "Least common denominator" which is often the result of "design by committee". Usually consumers are after something niche, unique, artistic, and creative, which is the inspiration or vision of an individual.
All of the worker owned places I've been have been exactly this: creative, interesting, and individual. These aren't giant chains designed in a megacorp boardroom.
> I don't see this working in the long term unfortunately unless a majority of the workers have a lot experience with business, especially something as cashflow-sensitive as a restaurant (which typically operate on razor-thin margins). But I do wish them luck in their experiment.
There are many of these and though I don't know the success rate compared to hierarchical businesses in the food industry in particular, co-ops have a higher success rate than hierarchical businesses in general and there's been a lot of research into it, though I don't know if an exact "why" has ever been established. I suspect it's that there's no handful of individuals who can get greedy and ruin things by trying to maximize profit. Even for-profit co-ops generally have a better sense of balance since the workers don't want their business to dry up and if one person gets greedy there are lots of other people to keep them in check.