FAQ

This is a page of answers to some common questions about LVWORCS and worker cooperatives in general. Several of these questions have been raised at our meetings and film screenings. We hope to answer all of your questions to your satisfaction. If you have a question that is not listed here, we will be glad to answer it. Just contact us by e-mail at 702coop@gmail.com, or stop by at one of our meetings.

What is a worker cooperative?

A worker cooperative is a business run on a particular model in which workers, together, make the decisions for the operation of the business, control the work that they do, and split the profits that the business makes. Unlike most enterprises, worker cooperatives do not have bosses, and decisions are made by voting or by a consensus decision-making process. A worker cooperative is controlled and owned by its members and each member receives a single vote, along with an equal number of shares in the cooperative if it has capital stock. In 1995, the International Co-operative Alliance, a Geneva-based global organization representing cooperatives, declared seven principles by which cooperatives (including worker cooperatives) abide: Open Membership, Democratic Control, Economic Participation, Autonomy and Independence, Education and Training for Members, Cooperation Among Cooperatives, and Concern for Community.

According to the United States Federation of Worker Cooperatives (USFWC), of which we are a member, worker cooperatives are defined as “business entities that are owned and controlled by their members, the people who work in them.” Any group of three or more people can form a worker cooperative under Nevada law. The goal of LVWORCS is to inform people in the Las Vegas Valley about worker cooperatives, and assist in creating them locally.

What is the difference between worker cooperatives and other types of cooperatives?

Several different business models are called “cooperatives”, but not all of them are worker cooperatives. There are consumer cooperatives, agricultural cooperatives, and employee-owned businesses known as employee stock ownership plans (ESOPs). What these business models have in common is that they give collective control to a group of people, but only worker cooperatives are completely owned and governed by the employees themselves.

Consumer cooperatives, such as REI, the world’s largest, operate through offering memberships to the consumers, which come with certain benefits. However, employees are not vested with any more control over the business, or over their pay, than businesses following the traditional model. Agricultural cooperatives, while owned by the members, are associations of farms and producers which form to provide assistance to farmers, such as obtaining lower prices on supplies and offer distribution services to farmers. Perhaps the most essential difference is in the role that agricultural cooperatives and worker cooperatives play. Whereas the purpose of a worker cooperative is to administer, work at, and profit from a business, the purpose of an agricultural cooperative is to provide a support network for farmers.

An employee stock ownership plan (ESOP) is partially employee-owned, but unlike in a worker cooperative, all of the workers do not control the distribution of profits or the management of the business. Rather, worker ownership in ESOPs is based on investment, where the workers act as stakeholders, either wholly or partially, of the company’s financial assets. The Association of ESOPs defines an ESOP as “an employee benefit plan which makes the employees of a company owners of stock in that company.” This is markedly different from a worker cooperative, in which members control all stock (if the business has stock) but also directly control internal decision-making in the enterprise.

Why should you start a business as a worker cooperative?

Worker cooperatives are a viable alternative to the traditional model of starting a business, and come with several benefits. One advantage that starting a worker cooperative has over running a business according to the traditional business model is that power and business tasks are shared, and thus the burdens of work and management are not placed on anyone in particular, but is shared among all participants. Employment is guaranteed for workers until the business ceases to exist, so the model provides job stability to those who join. There is also a tax incentive for starting a business as a worker cooperative: the taxable income of the enterprise can be legally reduced by giving individual members “patronage dividends” from the bank account of the cooperative, to be individually reimbursed at a later time. The cooperative is thus absolved of taxation for these individual dividends. (See a more detailed explanation here.)

Worker cooperatives have a commitment to their surrounding community or region, primarily in creating viable jobs for local people. If one is inclined to helping the community while starting a business, and knows at least two other people who share their vision, then a worker cooperative is the way to go. For more on the benefits of worker cooperatives, consult the Co-opLaw website.

What happens when a worker cooperative wants to hire new workers?

It is up to the members of a worker cooperative to decide how they wish to hire new employees, though it is against cooperative principles to discriminate on racial, ethnic, religious, political, or gender grounds. Typically, however, worker cooperatives follow a certain process for hiring new employees which is used by several worker cooperatives. In this commonly employed model, if a worker cooperative has a new member, he or she is to hire new workers, there is a common practice followed among many cooperatives. In this model, there is a period, the length of which is decided by the cooperative, in which a prospective employee is informed about worker cooperatives and joins a designated number of meetings, in which the new member can obtain training and exposure to the co-op’s internal practices. If the new member still has a desire to be hired, an employee then arranges an interview with them, and at the following meeting, the group takes a vote on whether to hire the employee.

Why does Las Vegas need worker cooperatives?
As a consequence of the recession of 2008, which devastated the national economy, Las Vegas suffered from a high foreclosure rate, one of the worst unemployment rates in the country, and considerable wealth inequity. The city continues to suffer from these problems, in addition to the long-standing issues that have plagued the Las Vegas area for years, such as the impending water crisis, the failure of the local educational system, and widespread homelessness. Due to the gravity of these problems, concrete action in the community is necessary to relieve them. As a response to these problems, particularly job loss, worker cooperatives have the potential to be a promising solution.

What projects are you planning?

We are currently contemplating several ideas for co-operative projects in the Las Vegas metropolitan area. Among the ideas that have been proposed by our members are a grocery which will sell locally-produced, organic food; an environmentally-sustainable building project, a moving business, and a composting cooperative.

What is a worker cooperative incubator?

A worker cooperative incubator is an educational center which assists in promoting, and providing local resources to form, worker cooperatives in a particular community or region.

What is workplace democracy?

Workplace democracy is applying the principles of a democratic society, namely that all power should be in the hands of all people, to the working world.

Does “democratic” mean affiliation with the Democratic Party?

Absolutely not! Our organization is not affiliated with the Democratic party. We have several members of various political orientations, some of whom are opposed to the Democratic party.

Who can join a worker cooperative?

According to Nevada state law, anyone over the age of 18 can join a worker cooperative.

Is a worker cooperative the same as a union?

No, though there are attempts to connect the labor movement (unions) with the worker cooperative movement, and a model has been proposed by United Steelworkers, the Union Co-operative Model, that integrates the two movements. A worker cooperative is an actual business, whose purpose is to make profits and provide employment for workers, whereas a union’s purpose is to represent workers in the workplace.

What are examples of successful worker cooperatives?

In the United States, there are several examples of successful worker cooperatives, among which are: the member cooperatives of the Arizmendi Association of Bakeries, Evergreen Forest Cooperative, and the Inkworks Press Collective.

I live in the Las Vegas area. How do I get involved?

If you are interested in getting involved in the worker cooperative movement in Las Vegas, feel free to stop by at one of our meetings and introduce yourself! We would love to welcome new members.

When and where are your meetings held?

Our meetings are held on every Tuesday, except the second week of each month, and every second Monday of each month. Meetings take place in CBC Room C-214 at UNLV, from 6:00 to 9:00 PM. For more about our meetings and other LVWORCS events, see our events page.

How are decisions made in a worker cooperative, and by whom?

Decisions are ideally made by the consensus of the group. If the group cannot reach consensus on the issue of making a particular decision, the group can either continue meeting until a suitable agreement is reached by all, or can resort to the majority vote. In some larger worker cooperatives, voting for representatives is employed, and each cooperative member receives the right to one vote.

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One Response to FAQ

  1. shanabr says:

    Good logic, correct grammar , and reads smoothly.

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