Our resident cooperative enthusiast (and owner-member coordinator) Matthew Epperson recently had a chance to travel to Spain and learn from the workers at the Mondragon Cooperatives – we asked him to share with us some of what he learned:
- The Mondragon Co-operative Corporation (MCC) is a complex of 110 co-ops with revenues of 18 Billion Euros and the 7th largest Spanish company. Located in the Basque region of Spain – the modern cooperative movement began in 1956 in an area that was desperately poor as a solution to the poverty. Today, the Basque region has some of the lowest unemployment in Spain – despite the currently economic climate.
- Job security is of the highest priority to the cooperatives and Mondragon promotes a culture of unity. For example, Fagor, one of the oldest companies, founded in 1956, recently collapsed! Although this was a huge shake up, it was not catastrophic for the workers – true to co-op form, its 1800 workers are in the process of being relocated to the other cooperatives in the collective. Though this mean less hours for all – members are committed to making the cooperatives more beneficial to all workers. This was inspiring! Many workers spoke of this “relocation program” as so vital to their social welfare system. Workers in other plants described Fagor’s workers were coming into their plants, but rather than this being cause for resentment, it was a reminder of how the system looks out for the employment of everyone.
- At Mondragon, there are no fat cats at the top being paid over 300 times as much as the workers (the United States National average – CEO to worker). Instead there are agreed-upon (by democratic vote) wage ratios between executive work and field or factory work which earns a minimum wage. These ratios range from 3:1 to 9:1 in different cooperatives and average 5:1. Theoretically, this means that the general manager of an average Mondragon cooperative earns no more than 5 times as much as the lowest paid worker in his/her cooperative. However, because many of the jobs are specialized – thus classified at higher wage levels, the ratio is even smaller.
- There is no such thing as redundant in Mondragon, and firings are so seldom it’s probably startling when it happens. The general philosophy is that boosts in efficiency in the factories are to be sought wherever possible, with no fear that that will mean putting oneself or your neighbor out of a job. People are the reason the machines are working, and people can and will be the masters of those machines, not the other way around. If there were no more car parts to be made or inspected by hand, then the workers would just focus on better governance and education, more intellectual tasks.
- Employees volunteer up to 15 hours a month to be a part of different councils (such as the social and governing council). This is where the workers display their voice in guiding the organizations they work for.
- The social council, in particular, is devoted to representing workers rights (working conditions, pay, hours, grievances), whereas the governing council is how workers are represented as owners.
- Elegantly, every worker has a chance at being a member and thus given a vote in the ultimate decision making body of the co-ops, known as the general assembly (GA).
- The GA elects the governing council (board of directors), social council and watchdogs (internal auditors), and everyone (no matter their position) is eligible to run for these positions.
- While this council work always mattered to them, it was during the 2008 financial crisis that it especially mattered who was on the social council –
o for example: the co-ops were discussing wage cuts and hours cuts just to stay alive, and that meant trusting your social council to represent you as a worker in those big questions. Work was cut to 20 out of 30 days in the month for quite a while. Meetings were attended by crying and shouting — it was intense! But these were people working for themselves, and thus they had every motivation to make even the hard choices, and did their best to do so fairly.
- Women have historically been less represented in the councils and on the shop floors but that is gradually changing. One woman we spoke with said she encountered a lot of skepticism that she was up to the manual labor, but she was given the chance and she proved herself. Doubt doesn’t follow her any longer. The men realize some machine tasks are just better for women anyway, particularly around hand-eye and quality control areas.
Visit Mondragon Cooperatives, and watch a lecture by Economics professor Richard Wolff on Mondragon.