Co-operatives offer a practical means of combating economic inequality and lifting the working poor out of poverty.
That is the view of experts brought in by the Bermuda Economic Development Corporation to speak at two “Co-operative 101” free seminars, this evening and tomorrow.
Inequality is a frontline political issue in Bermuda and around the world, particularly in an era when workers’ share of total income is falling.
For example, labour’s share of GDP in the US was about 66 per cent in 2000 and has since fallen to about 62 per cent. Meanwhile corporate profits as a portion of GDP have risen from 8 per cent to 12 per cent.
Stagnant wages have led to increasing dissatisfaction, particularly among those who are employed but do not earn enough to fulfil basic needs.
The Bermuda Government has committed to implementing a “living wage”.
Ibon Zugasti, who works for one of the world’s most successful co-operative organisations, the Mondragón Corporation in the Basque region of Spain, said co-operatives offer an alternative means of spreading the wealth, by spreading profits more evenly and giving workers a say in company decisions.
However, he cautioned against the idea that co-operatives could be some kind of workers’ utopia and said business principles still applied.
“Mondragón is not paradise,” Mr Zugasti said, referring to the corporation and federation of co-operatives for which he works. Mondragón is the tenth largest industrial group in Spain and comprises 266 bodies, of which 98 are co-operatives. The organisation employs more than 80,000 people.
“The co-operative culture is important, but so are corporate management decisions,” he said, adding that profits could only be distributed if the organisation were profitable.
“Our competitors are large corporations, most of them larger than us, and we have to make good decisions to compete.
“It’s difficult to create the governance for a co-operative with the one worker, one vote ideal. When you make positive decisions, it’s easy, when there are difficult decisions, it’s not so easy.
“Our approach is to separate the corporate management decision-making from the administrative decision-making. We have to combine professional management with keeping a democratic approach.”
The BEDC will feature the Mondragón success story in its first seminar this evening and also look at financing, while the panel will offer feedback on co-operative ideas. A second session tomorrow night will explore co-operative governance and local opportunities. Both free-to-enter sessions will be held at St Paul Centennial Hall from 6pm to 8.30pm.
With Mr Zugasti on the panel will be Michael Peck, William Generett, Carmen Huertas, Kristin Barker and Chris Cooper, all of whom are associated with the 1worker1vote movement in the US, who advise and help groups setting up co-operatives.
Mr Cooper, who is based in Ohio, said he had seen how worker-run co-operatives had tangible benefits for members.
“The impact has been transformational for many average working people,” Mr Cooper said. “Through co-operatives, they’ve been able to generate wealth that has made a big difference in their lives. They have been able to send their children to college and buy their own house, instead of being lifelong renters.”
Widespread unhappiness with an increasingly top-heavy economy has been reflected by voters supporting populist candidates in many countries. These were good conditions for growth of the co-operative movement, Mr Generett said.
“Movements are built out of dissatisfaction with current conditions,” Mr Generett said. “We do have a good number of people working hard without being able to have a good quality of life for them and their families. It cuts across race, class and age boundaries.”
Ms Huertas, who is based in New York, said there was plenty of interest in forming co-operatives and 1worker1vote worked to help make them reality.
“There’s no shortage of good ideas, but there is a shortage of financing,” Ms Huertas said. “Those who are close to the problem often have the best ideas on how to solve it.”
Mr Peck said that good ideas tended to eventually attract funding. He said the idea of a stakeholder-led, community-centred economy was particularly attractive amid fears over what the future of the world of work held.
Technological advances were bringing automation at the expense of jobs and new thinking was needed to create new roles for people, he added.
“The problem is that in business school we are taught all about creative destruction, but no one seems to care about the repurposing of the human being in all this,” Mr Peck said.