Home | About | Donate

'Let's Expand Employee Ownership': Bernie Sanders Backs Plan to Give Workers Power Over Corporate Decisions

'Let's Expand Employee Ownership': Bernie Sanders Backs Plan to Give Workers Power Over Corporate Decisions

Jake Johnson, staff writer

Decrying an economic status quo that "produces huge CEO bonuses while millions are paid starvation wages," Sen. Bernie Sanders on Tuesday backed a pair of policies aimed at reducing soaring inequality by giving workers more power over corporate decision-making.

3 Likes

Its called leadership for the Common Good, common decency and an egalitarian society, as opposed to moral cowardice, vulture capitalism, and common greed. Bravo to Bernie Sanders! He speaks-out and fights for the “common” man, woman, and family; the “little people” rather than the 1%. Its too bad some cannot see that Bernie’s fight for economic justice, empowerment, and equality is a major part of civil and human rights, that many other victories flow from. Bernie wisely refuses to fall into the identity politics trap.

8 Likes
  1. Public Banks
  2. Employee owned Cooperatives

Why are these such incredible stretches for the USAn imagination?

10 Likes

I have suggested this in the past. Another politician other than Bernie fairly recently suggested that we insist on employee presence at board and committee meetings. It’s a start, but corporate flak will come along with it.

3 Likes

We need a way to BLUDGEON Corporations into submission but,

Along the same lines Lets consider this too: https://www.mondragon-corporation.com/en/about-us/

MONDRAGON Corporation is the embodiment of the co-operative movement that began in 1956, the year that witnessed the creation of the first industrial cooperative in Mondragón in the province of Gipuzkoa; its business philosophy is contained in its Corporate Values:

Cooperation.
Participation.
Social Responsibility.
Innovation.

The Corporation’s Mission combines the core goals of a business organisation competing on international markets with the use of democratic methods in its business organisation, the creation of jobs, the human and professional development of its workers and a pledge to development with its social environment.

In terms of organisation, it is divided into four areas: Finance, Industry, Distribution and Knowledge, and is today the foremost Basque business group and the tenth largest in Spain

2 Likes

Hi Phred_Pharkel
" Oh thank you, because you give us a way that’s already working. A working model that already functions well. : )

1 Like

Here’s the reality: Union representation is required on the boards of all German corporations – that doesn’t seem to be stifling the economy that vies with China to be the largest exporter in the world.

And if the right wants to extol an “ownership economy,” then they should get on board.

1 Like

Management other than the executives is unionized in Germany. My wife was a branch bank manager and was a shop steward.

3 Likes

Once again the spokesperson of the progressive left demonstrates a total lack of understanding of capitalism and how it operates.

In order to survive, a worker-run business must pursue the goal of profit maximization, just like every other. Because a worker-owned factory would have to compete with ordinary capitalist businesses on the same terms as them, so they are subject to the same competitive pressures, to keep costs down and to maximize the difference between sales revenue and costs.

The worker-owned factory has to buy its raw materials on the market, along with every other company. It does not get steel, oil, copper, electricity any cheaper because it is owned by its employees. In buying in its machinery, equipment, materials, premises, transport etc., and in paying its rates etc, any unit, including any workers’ co-operative, must pay all these costs. How could any imagined “socialistic” unit operate without power supplies? In its application of socialist principles in production and consumption, is it going to persuade the utility companies to provide supplies free?

In addition to this income, the workers in their worker-owned unit must have income to cover personal living costs such as rent or mortgage repayments, food, clothes, leisure activities, and so on and on. This is inescapable. Regardless of their make-up, production or service co-ops can only continue their existence whilst they are economically viable; that is, where income exceeds expenditure. If expenditure exceeds income, then inevitably they disappear.

A worker-owned factory has to sell its products on the market, along with every other company. It does not get higher prices for its goods because it is owned by its employees. It has to compete with every other manufacturer in terms of price, delivery dates, quality etc. In order to compete over any length of time, it will have to invest in new plant and equipment. To do this it will require a large amount of capital. If this is obtained by borrowing, then they will have to convince the banks that it is a viable and profitable concern, run along good business lines. It will be under even greater pressure to prove that it is viable just because it is a different sort of enterprise. Of course, it may decide to raise the capital needed for investment out of the profits. Inside the factory, there are no owners other than the workers. But they buy goods at the same price as other capitalist concerns. They sell goods at the same price as other capitalist firms. They compete flat out with other capitalist firms. If they are to make enough surplus to re-invest, or to convince the banks they are good for a big loan, how are they to do it? They are in a trap. Either they sack some of their fellows; or they increase their own intensity of work; or they take a wage cut. Elected workers’ councils would be in exactly the same position of having to lay off staff, if there is no market for the goods they produce.

Whichever avenue they choose, their decision has two effects. Firstly they have attacked their own living standards. Secondly, they are acting as an unconscious argument in the hands of other bosses against their work-forces. If an employer in another factory is faced with a demand for, say, a wage rise, he will immediately reply that he can’t afford it and point to a worker co-operative and say: ‘they work for less than you are demanding. It seems a perfectly reasonable wage to them, with no boss, why are you demanding from me more?’

The capitalist has been provided with an excellent propaganda weapon against his own employee demands as a way of mitigating the class struggle and persuading workers that they have an interest in accepting ‘realistic’ (i.e. lower) wages. Worker-owned enterprises exhibit the exact same vices as capitalist firms.

Where workers owned their factories and it has been a success it was because it was merely the success of essentially capitalist undertakings. There is a tendency for worker co-ops to resemble more and more over time the conventional capitalist business model and the case of Mondragon - the largest worker co-op conglomerate in the world - would seem to bear this out. It has grown and has departed more and more from its original egalitarian principles and Mondragon has been noted for employing heavy hand tactics against its own two-tier workforce of privileged co-op members and outsourced offshore temporary casual workers.

Worker-owned enterprises as proposed by Sanders may very well offer an example of self-management but they simply cannot compete with the economic might of modern capitalism. We cannot self-manage capitalism in our own interests and the only way we can really live without exploitation is by abolishing capitalism. The state can be counted on to represent and protect the interests of the privileged minority. A “non-capitalist” sector just do not have the same resources at its disposal and therefore cannot beat the capitalist sector at its own game. History is littered with the experience of failed co-operatives or corrupted co-operatives. Either the co-operatives “sell-out” or they are “put-out” by market-forces. We know what happened. This was because they had to compete with ordinary capitalist businesses on the same terms as them and so were subject to the same competitive pressures, to keep costs down and to maximize the difference between sales revenue and costs. The co-operative movement was out-competed. Look at the example in the UK of the John Lewis Partnership.

What you’ll end up seeing is a lot of companies with 249 employees. Dumb policy idea by Sanders once again. The unintended consequences are many.

Being a large exporter doesn’t mean you’re economy is humming along. Just means your economy is dependent on exports. The US is the strongest economy the world has ever seen and yet it’s a net importer. Don’t become like Trump and think that being a net-exporter is a goal in and of itself.

1 Like

Because they interfere with the greed of the psychotic. The psychotic elite need dto be put down first, before anything else can happen

3 Likes

Better yet just build co-ops that compete with (and ultimately replace) the major corporations.

1 Like

wow! This guy keeps coming up with fantastic ideas faster than the Demorats can steal them. Go Bernie Go!

2 Likes

Many employee owned businesses start when small business owners retire and sell them to their employees. Some stake out the employees with loans. The employees receive a fair wage that is offset by pride of ownership.

2 Likes

I’m sorry Phred but I cannot let your praise of Mondragon pass. It success is because it duplicates the conventional business model, not because they challenged it. “We are private companies that work in the same market as everybody else. We are exposed to the same conditions as our competitors.” - Mikel Zabala, former Mondragón’s human-resources chief.

Mondragon is often brought up as an example of a successful co-operative in action where co-op members exercise highly-limited control within each co-operative through the principle of one-member-one-vote, to a board which is elected from the membership and runs the co-operative on behalf of the members. However, it must be emphasized that it is the board that makes major production decisions on behalf of the membership meaning that members have little control over the day to day running of a co-operative in the complex. The board is thus accountable to the membership only on the basis of mandate and recall in the annual election of board members.

It is argued that the imperatives of the market dictate that the board ought to make major production and administrative decisions without consulting the membership in order for the co-operative to be successful in the market. With Mondragon being subject to fierce international competition, cooperative efficiency has intensified within the cooperatives. This set-off a tension between the stated social objectives (democracy, participation and accountability of management) of the co-operative, and the business-like (technical efficiency, productivity, profitability) approach to management adopted as the Mondragon co-operatives started to encounter the effects of global market instability.

Firstly, emphasis was placed on the employment of wage labourers, rather than more worker-owners.
Secondly, policy-making began to occur further away from the shop floor – in specialised bodies (which was not always the case in the pre-1970s period.
Thirdly, an increase in joint ventures with private firms was experienced, including in some cases buyouts by the private sector and international investment in non-cooperative firms. Market pressures have engendered a situation in which direct democracy has been sacrificed for market efficiency, and the range of possible policy alternatives has been limited at the highest level of the complex to exclude any prescriptions that are not in line with the profitability and efficiency imperatives of the complex as a whole.

Mondragon is clearly more democratic than private enterprises. Nonetheless, democracy in Mondragon has degenerated over the last decades. Every year, workers are required to attend the general assembly, providing them an opportunity to vote on important issues and elect the governing council. Although such an assembly carries great promise, there are a variety of obstacles to participation. Those who were interviewed complained that the general assembly almost always rubber-stamps proposals of the governing council and said that almost all decisions by referenda did not have any opposition and. When asked why not, one member replied that their managers are there watching. Another member complained about stalling tactics by management such as delaying the presentation of important issues until the end of the assembly when workers had already left.

Hiring wage-labour is much cheaper for the current membership than admitting new members. Mondragón is a typical capitalist employer operating plants in low-wage countries like Poland, Egypt, Morocco, Mexico, Thailand and China. Many employees in Spain are also non-members. In fact as many as 1/3 of Mondragon workers are not cooperative members.

They too have globalised their business into the developing world and not included those foreign workers as co-op members. A study of Mondragon subsidiaries in China comparing co-op-owned factories with foreign-owned capitalist firms found that pay was low, hours long, and conditions harsh. Just like their capitalist competitors, Mondragon co-ops invested in China to manufacture labor-intensive goods cheaply and to be near emerging markets – a strategy coop members accepted when they voted to pursue an international strategy.

Regards the ethical stance Mondragon takes in defence of jobs and opportunity, let’s be very clear, co-op members in the Basque region voted to pursue an international strategy to employ low-wage workers with no such security. When it had become apparent to Mondragon’s that many of its products were in direct competition with other multinational companies. Since re-tooling their company to make other products would be difficult and costly, it was decided that the company would instead adapt to current global practices rather than dramatically change their own products.

Ask yourself this, Phred. Does job security, decent pay, and workplace participation in the Basque country rest upon exploitation elsewhere?

Wonder why that obvious observation is such an incredible stretch for the USAn imagination.

1 Like

I offer you 2008 when Capitalism failed and We Tax Payers along with Government intervention had to bail them out.

That is known as Socialism, which was the safety net for Greedy Capitalists that do not give a fig about their employees.

BERNIE is right of course.

Workers, the Labor force that creates profit must have a voice in Company policy.

Otherwise Corporations just pack up their machinery and get Tax Breaks when they open up shop somewhere in the World where they can find Labor at Slave Wages.

2 Likes

Perhaps you should have read my comments on Mondragon and their employee-owned out-sourcing to temporary casual staff and off-shoring to cheaper priced foreign countries. Management and ownership variants does not abolish capitalism and most definitely does not end wage slavery.

I am afraid if you believe that government subsidies given to business is a form of socialism, I think you mis-understand what socialism really is.

It also seems like many folk have forgotten the Savings and Loans crisis where the government also directly intervened financially.

Interestingly, until the Enron debacle, most companies made their 401(k) contributions in stock and had both ESOPs and ESPPs to encourage employee ownership. However, the fiduciary rules imposed after Enron has forced companies to eliminate 401(k) contributions in stock. Additionally, many technology and life sciences companies already give stock to most, if not all employees.

All that needs be done in this regard is to repeal the rule that says companies can’t make their 401(k) and profit-sharing contributions in stock.