The benefits of cooperatives over traditional models are numerous. By focusing on the collective needs of their members, the drive for profit and market share takes a backseat in place of the good of the people.
Income Inequality
The gap between the rich and poor is widening, and action needs to be taken to reverse this trend. As the peak of the corporate hierarchy gobbles up ever larger shares of wealth, cooperatives offer a way to build wealth at an individual level, while limiting the predatory practices of the 1%. According to the Economic Policy Institute, the average CEO compensation relative to the typical worker is around 300 to 1, a ridiculous number. In contrast, worker owned cooperatives have a much lower gap in compensation. At Cooperative Home Care Associates (CHCA), the United States largest worker owned company, the CEO to worker ratio is just 11:1.
Racial Inequality
One needs only to look at the fast-growing organization Cooperation Jackson for an example of how cooperatives can foster community growth through solidarity and equality. They are using the principles of democracy, self-management, and education, to transform economically disadvantaged neighborhoods into cooperative communities focused on social responsibility and collective growth.
Job Security
In times of economic downturn, cooperatives fair better than traditional businesses. This is due to the purpose of the model; instead of blindly laying people off during hard times, the flexible nature of cooperatives allows for members to make sacrifices for the long-term viability of the enterprise such as cutting costs places other than labor or reducing hours or pay when needed.
Cooperatives also experience a lower employee turnover rate than traditional models, likely due to the inclusive nature of the business and the benefits that members enjoy. A CHCA study showed that its employee turnover rate is about 40% lower than industry standards.
More Than Just a Job
In this modern world, our job is our identity. We say, “I am a salesman,” “I am a caregiver,” “I am a welder,” but these identities are bound to the will of those above us, those corporations that sign our checks and control our livelihood. Work plays an important role in our identity, instilling a sense of satisfaction for a job well done, but the meaning one can derive from work has largely been replaced by a time clock, a paycheck, those precious days off when we finally have our time to ourselves. Let’s put the meaning back in our lives, the purpose back in our work.
Martin Luther King Jr. put it better than anyone when he said “The profit motive, when it is the sole basis of an economic system, encourages a cutthroat competition and selfish ambition that inspires men to be more concerned about making a living than making a life.” Cooperatives give people the power to take back control of their lives, to have a piece of the pie they work so hard to bake, and to have their voices and opinions heard.