Worker participation : lessons from the worker co-ops of the Pacific Northwest

Once they accept a job, most Americans have little control over their work environments. In__Worker Participation__, John Pencavel examines some of those rare workplaces where employees both own and manage the companies they work for: the plywood cooperatives and forest worker cooperatives of the Pacific Northwest. Rather than relying on abstract theories, Pencavel reviews the actual experiences of these two groups of worker co-ops. He focuses on how worker-owned companies perform when compared to more traditional firms and whether companies operate more efficiently when workers determine how they are run. He also looks at the long-term viability of these enterprises and why they are so unusual. Most businesses are constantly caught in the battle over whether to use the firm's profits to pay labor or to increase capital. Worker cooperatives provide an appealing case study because the interests of labor and capital are aligned. If individuals have a role in setting goals, they should have an added incentive to help meet those goals, and productivity should benefit. On the other hand, observers have long argued that, since any single employee in a co-op reaps only a small benefit from working hard, workers may shirk work, and productivity can flag. Furthermore, co-ops often have difficulty raising capital, since they are constrained by how much money the workers have, and banks are often reluctant to lend them money. Using some fifteen years of data on forty mills in Washington State, Pencavel examines how worker co-ops really function. He assesses the practical problems of running a workplace where every employee is a boss. He looks at worker productivity, on-the-job injuries and financial risks facing owner-workers. He considers whether co-ops are inherently unstable and if they are plagued by infighting among the many worker-owners. Although many of the co-ops he studied have closed or been replaced by conventional businesses, Pencavel judges them to have been a success. Despite the risks inherent in such operations, allowing workers to make the decisions that profoundly affect them produces many benefits, including workplace efficiency and increased job security. However, Pencavel concludes, if more Americans are to enjoy such a working arrangement, labor laws will have to be changed, participation encouraged, and a more vigorous public debate about worker participation must take place. This book provides an excellent place to start the discussion. Once they accept a job, most Americans have little control over their work environments. In Worker Participation , John Pencavel examines some of those rare workplaces where employees both own and manage the companies they work for: the plywood cooperatives and forest worker cooperatives of the Pacific Northwest. Rather than relying on abstract theories, Pencavel reviews the actual experiences of these two groups of worker co-ops. He focuses on how worker-owned companies perform when compared to more traditional firms and whether companies operate more efficiently when workers determine how they are run. He also looks at the long-term viability of these enterprises and why they are so unusual. Most businesses are constantly caught in the battle over whether to use the firm's profits to pay labor or to increase capital. Worker cooperatives provide an appealing case study because the interests of labor and capital are aligned. If individuals have a role in setting goals, they should have an added incentive to help meet those goals, and productivity should benefit. On the other hand, observers have long argued that, since any single employee in a co-op reaps only a small benefit from working hard, workers may shirk work, and productivity can flag. Furthermore, co-ops often have difficulty raising capital, since they are constrained by how much money the workers have, and banks are often reluctant to lend them money. Using some fifteen years of data on forty mills in Washington State, Pencavel examines how worker co-ops really function. He assesses the practical problems of running a workplace where every employee is a boss. He looks at worker productivity, on-the-job injuries and financial risks facing owner-workers. He considers whether co-ops are inherently unstable and if they are plagued by infighting among the many worker-owners. Although many of the co-ops he studied have closed or been replaced by conventional businesses, Pencavel judges them to have been a success. Despite the risks inherent in such operations, allowing workers to make the decisions that profoundly affect them produces many benefits, including workplace efficiency and increased job security. However, Pencavel concludes, if more Americans are to enjoy such a working arrangement, labor laws will have to be changed, participation encouraged, and a more vigorous public debate about worker participation must take place. This book provides an excellent place to start the discussion. Cover 1 Contents 6 About the Author 8 Preface 10 1. Introduction: Citizens, Consumers, and Workers 12 How Labor Markets Differ from Consumer Markets 13 Workplace Public Goods 15 Worker Participation 16 Ownership and Management 19 Ownership by Workers 21 Management by Workers 22 An Organizing Framework of Ownership and Management 23 The Case for the Worker Co-op 25 The Defects of the Worker Co-op 27 Organization of This Book 28 2. Labor and Capital in the Worker Co-ops of the Pacific Northwest 31 The Forest Workers' Co-ops 36 Labor 38 Management 41 Differences Among the Worker-Members of the Plywood Co-ops 42 Differences Among the Workers-Members of the Forest Workers' Co-ops 44 The Production Environment in the Plywood Co-ops 45 Capital 47 The Cost of Capital to Co-ops 48 The Returns to Membership in a Co-op 50 Figure 2.1 34 Figure 2.2 35 Figure 2.3 37 Figure 2.4 51 3. The Relative Productivity and Profitability of the Co-ops 56 Productivity 57 The Income Maximization Model of the Co-op 64 The Market for Membership 73 Degeneration in the Plywood Co-ops 75 The Role of Hired Workers in the Plywood Co-ops 77 Degeneration in the Forest Workers' Co-ops 78 Table 3.1 59 Table 3.2 70 Table 3.3 77 Figure 3.1 61 Figure 3.2 65 Figure 3.3 71 4. Lessons from the Worker Co-ops of the Pacific Northwest 80 The Co-ops' Capital Market Problems 82 The Problem of Degeneration 84 The Demise of the Forest Workers' Co-ops 89 Worker Participation in Workplace Governance 90 Worker Participation and Representation Under Welfare Capitalism 94 The Demise of Company Unions and Current Labor Law 96 A Richer Debate Over Workplace Governance 99 Notes 102 Chapter 1 102 Chapter 2 105 Chapter 3 107 Chapter 4 114 References 118 Index 124 Once They Accept A Job, Most Americans Have Little Control Over Their Work Environments. In Worker Participation, John Pencavel Examines Some Of Those Rare Workplaces Where Employees Both Own And Manage The Companies They Work For: The Plywood Cooperatives And Forest Worker Cooperatives Of The Pacific Northwest. Rather Than Relying On Abstract Theories, Pencavel Reviews The Actual Experiences Of These Two Groups Of Worker Co-ops. He Focuses On How Worker-owned Companies Perform When Compared To More Traditional Firms, Including Whether Companies Operate More Efficiently When Workers Determine How They Are Run. He Also Looks At The Long-term Viability Of These Enterprises And Why They Are So Unusual.--cover. 1. Introduction: Citizens, Consumers, And Workers -- 2. Labor And Capital In The Worker Co-ops Of The Pacific Northwest -- 3. The Relative Productivity And Profitability Of The Co-ops -- 4. Lessons From The Worker Co-ops Of The Pacific Northwest. John Pencavel. Includes Bibliographical References (p. 107-112) And Index. "Once they accept a job, most Americans have little control over their work environments. In Worker Participation, John Pencavel examines some of those rare workplaces where employees both own and manage the companies they work for: the plywood cooperatives and forest worker cooperatives of the Pacific Northwest. Rather than relying on abstract theories, Pencavel reviews the actual experiences of these two groups of worker co-ops. He focuses on how worker-owned companies perform when compared to more traditional firms, including whether companies operate more efficiently when workers determine how they are run. He also looks at the long-term viability of these enterprises and why they are so unusual."--BOOK JACKET.