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Comment by jadbox | Hacker News Reader

This is one of the reasons why I believe in rev-share employee co-ops. The power dynamics are greatly equalized: everyone gets to see the profit and everyone knows how much others are getting paid. Sure, there's uncomfortable and challenging situations to still work through, but the benefit of having more distributed worker ownership and transparency is a value worth pursuing.

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I believe in the tooth fairy, but it doesn't mean she is real [1]. There is no conspiracy preventing employee owned co-ops from being started so why don't they dominate the business landscape if they are so much better? Or are they like lots of utopian ideas that don't work well in practice.

1. Not really, but I wish she was real :)

Education systems are designed to train people to be workers, not to be worker-owners of co-ops. There are a lot of skills required to start a co-operative company that people just don't tend to have. There is also a lack of financing options for worker co-operatives because financial institutions tend to view them as risky (even though they are I believe more successful on average than private corporations). Most co-ops are bootstrapped with funds raised by the members themselves.

So, in short, our economy is built around a dynamic where many people have very little and are therefore essentially forced to work for those who have a lot. The precarity of those who would benefit most from being part of a co-op is largely what prevents them from being in one. This precarity is a boon to the wealthy in society, who can benefit from having people compete in the labour market. Thus, no one with the means to change the circumstances -- such that co-ops are simpler to form -- would ever want to do so as it would hurt their position.

This is one untested hypothesis I guess. An alternative is that most people don't want the stress and risk of running a business and prefer to just sell their labour in the market. If only a small percentage of people want to be business owners and managers then we will end up with the business landscape we have.

Why not just grant financial instruments that incentivize everyone to increase its value (Stock or RSU's) and make compensation data public, revealing who gets paid what?

Maybe I'm being an idealistic hippie or whatever. I kinda feel that opaqueness around compensation is meant to keep employees under-compensated for as long as a company can afford to do so. Solution: compensate everyone well, and if you can't afford it, don't be in that business anymore.

Large sectors of the economy are too competitive and of such low productivity to compensate everyone well.

Ultimately you can only afford to pay someone what the marginal value of their labour provides. If you pay them more it has to come from some other person in the organisation or the company loses money.

Worker coops by definition share profits equally amongst the members - do you mean flat salaries that doesn't work I am afraid.

I have been a member of a worker coop BTW so I do have some experience.

Not necessarily equally - they certainly can assign some members a larger share than others.

Sounds like a lot of tech startups, where employees own the majority of the shares. It just happens that some employees (the founders) have a larger share than others.

There is a meaningful difference, though, in that a coop is intended to be a permanent, stable arrangement while in a startup the current stock arrangement is intended to be temporary, while seeking external investment and/or an exit event.

Cant do that and be an actual worker coop one member one vote (share) - here are also legal complications as coops have a different legal structures.

I believe in them as well, but... but where are they?

With all the benefits of hard working people and without stupid, greedy managers standing in their way, co-ops should be literally everywhere!

I can't name any tech companies who do it, but I've seen in traditional businesses (the kind that don't lose VC money for years). They just aren't really the companies you're going to read about on here or cnbc.

Some tech companies kinda do it by paying employees in stock. The highest paid employee at Amazon only makes $150,000 cash, while the company creates shares of stock to fund the rest of their compensation. Those are actual shares that get taxes as income, not options.

Since Amazon doesn't participate in stock buy-backs, like most tech companies do, most of the salaries are actually funded by stock holders in the dilution of their shares.

Is that really the case? Let's say Amazon paid all salaries in cash. Also, for simplicity let's says employees view cash and stock compensation as perfect substitutes. Then the addition compensation has to be funded by Amazon - if it won't do so from cash from operations or debt, it has to come from raising equity: Which in effect is the same as paying employees in stock.

Unique example but REI Co-op has been pretty successful.

I believe REI has the same model as MEC (Mountain Equipment Co-op) in Canada. In order to buy from them, you must be a member, which costs like than $10 once, and profits are distributed between all members. Something like that.

You don't need a membership to buy from REI, but you do miss out on the profit sharing and other perks if you are not a member.

Bob's Red Mill

Co-opts are ripe throughout the agricultural sector, but they do have to fight hard to maintain those positions because short-sighted corporate competitors undercut the co-opts pricing with unsustainable practices. Often it is cheaper to pump farmland for all it is worth until the topsoil is depleted and thin, then just buy up different farmland from struggling small farmers who got undercut from the unsustainable practices. While the depleted farmland either gets sold off to developers or gets put into a wildlife program where they get paid rent by the government to leave it fallow.

So it is still a battle between people looking for short personal profits against those who are seeking long-term sustainable profits. There is no associated extra costs for depleting farmland or practicing unsustainable farming methods so assholes will continue to abuse it as long as they make money on it.

Unless these corporate competitors are stupid, then taking a short sighted approach means the returns from not exploiting the future are too low. The problem is not corporations, but the regulatory structure around farming where the true value of the future is not correctly valued. If these corporations made more money not exploiting the future than exploiting it then they would act in the long term interest.

Mondragon