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The Organization of Progressive Planning

Progressive Planning Magazine

Worker Coops

May 12, 1999 by Administrator in May/June 1999

By Chitra Somayaji

Cooperatives come in several types: producer-owned, consumer-owned, and worker-owned, the last being our focus here. Unlike ESOPs, pure worker coops are 100% controlled by the worker-owners, normally on a one-person one-vote basis (although some coops have hired additional employees who are not owners).

Worker-owned coops are most prevalent in bookstores, building/renovation firms, retail food stores, bakeries, restaurants, and plywood manufacturing. Estimates for the number of worker coops in the United States today range from 150 to 1,000. In 1991 the ICA Group in Boston counted 154 coops with 6,545 members. (ICA also estimated that there were 87,000 employees in majority-owned ESOPs, and 68% of them gave the worker-owners full voting rights.) According to a survey done by Dick Gilbert of the Southern Appalachian Cooperative Organization and others, about two thirds of the worker coops have less than 25 members.

Accurate data on coops is difficult to find because the businesses are no different from other corporations in how they register with the government. Both the IRS and the Department of Labor, which keep track of ESOPs, ignore coops. Hence the only way to collect information on them is through surveys, a method which is both expensive and unreliable. In general, coop businesses have the same success rate as other businesses, according to experts like Carol DiMarcello of ICA, but their failures receive more attention because of their unique form of control. Failures tend to result from three causes – market competition, lack of capital, and personnel problems.

Worker Coops by the Numbers

Number of worker-owned coops: 154
Number of members: 6,545
% of coops in which all workers are owners:   60%
Median* annual sales revenues per coop: $500,000
Average annual sales per coo:p $6,000,000**
Average number of members per coop: 43
Distribution of coops by size of membership
1-10 members: 37%
11-25: 26%
26-50: 12%
51-100: 7%
101 or more: 17%
Distribution by industry type
retail: 29%
manufacturing: 28%
food related businesses: 23%
large-scale manufacturing: 12%
printing and publishing: 11%
building/renovating: 10%
books: 7%
arts/crafts: 5%

 * half of coops make more than this, half less.
** higher than median due to a few much larger coops.

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