What's a worker co-op?
There are many kinds of cooperatives, such as credit unions and co-op markets. But unlike other consumer-owned cooperatives, a worker cooperative is a business owned by the people doing the work.
A worker cooperative (or co-op) is a type of business that puts worker wellbeing and community benefit at the core of its purpose.
Workers own the business and determine how it is run, based on the principle of one person, one vote. The worker-owners typically earn dividends each year based on the amount of labor they contribute to the co-op.
Worker co-ops can be managed collectively or by an elected board of directors. The worker-owners are able to direct everyday operations through many different management structures.
Worker co-ops can employ non-owners, but employees are offered membership after a reasonable trial period.
Many worker co-ops start out as traditional businesses, but convert when their original owners decide to retire. There are a number of reasons to go this route:
Employers who sell their business to their employees can benefit from significant tax incentives.
Continuing the legacy
Small businesses that sell to larger corporations are usually gutted or shut down, bringing the legacy of a local business to an unfortunate end. Converting to worker ownership ensures that the legacy lives on.
Keeping businesses owned by locals builds a more robust economy that is circular and sustainable, rather than extractive and exploitative.
Want to learn more about worker co-op conversions? See these resources from the Democracy at Work Institute.
Worker Co-ops in Rhode Island
Since Rhode Island's Worker Cooperative incorporation bill was passed in 2017, a community of co-ops have sprung up all over the Ocean State. They operate in several industries, including cleaning services, printing/marketing, and restaurants.
- Fortnight Wine Bar
- Sol Power
- Healthy Planet
- Bread & Roses Printing
- Starboard Developer Co-op
Sol Power is a worker-owned cooperative specializing in solar installations, battery backup systems, generators, and full electrical service. They began in 2012 as a single-owner LLC but decided to convert to worker ownership.
Healthy Planet was the first business in Rhode Island to incorporate under the “Workers’ Cooperative” law that passed in 2017.
Fortnight is an experimental wine bar with a wide range of offerings, including wines and craft beer. They are located in downtown Providence.
Bread & Roses started as a worker cooperative in the summer of 2019 and signed a union contract with the Teamsters that same year. Their services are extensive, including, but not limited to, graphic and web design, union printing, apparel, brand and political consulting, political campaign materials, and photography. They span as small as business cards and produce as large as billboards!
As a worker co-op, they say they are able to keep prices fair and affordable while paying sustainable wages to themselves, since they don’t have managers or a CEO.
The typical day working at Bread & Roses isn’t much different from a traditional workday. One key difference, the members say, is that being a worker co-op eliminates any fears of needing to compete with other staff members to get ahead. Everyone at Bread & Roses works collaboratively on projects.
Meetings of all the members are held when the co-op needs to make a big decision. They say the debating process can take some time, but they always reach a compromise that each member can agree on. Small day-to-day decisions happen quickly and naturally.
In addition to being paid hourly wages, the worker-owners vote at the end of every year how much of the business’s bank account to distribute to the members. So far, they have voted to keep the money in the business.
What are their thoughts on worker cooperatives in Rhode Island? ”Thanks to the work put in by Fuerza Laboral and The Rhode Island Center for Employee Ownership, we think that the prospects for worker co-ops are very good. They have done a great job at instituting laws that have paved the way for current and future cooperative start-ups and have helped incubate start-up cooperatives, including our own."