By Ariel Schwartz,Ariel Schwartz

In an era when income disparities and anger with financial institutions in the U.S. are generating powerful social movements, it's not surprising that people are starting to look towards alternative business models. Shift Change, a new movie from filmmakers Melissa Young and Mark Dworkin, looks at the world of worker cooperatives, where reasonable salaries, job security, and general work satisfaction prevail.

Nowhere are the benefits of this model more obvious than in the Mondragon Corporation, a giant federation of worker cooperatives in the Basque region of Spain (there's nothing about dragons involved, it was founded in a town called Mondragon) that works in finance, retail operations, production of consumer goods and industrial components, and more. Co.Exist spoke with Young about her experiences making the film, and visiting the notoriously closed-off Mondragon Corporation.

Co.Exist: How did you stumble across this topic?

Young: Mark Dworkin and I have produced documentaries around social and economic issues for over 20 years. About 10 years ago, we happened to be in Argentina shortly after the big economic collapse they had there and did some filming with worker co-ops. People were basically locked out when the owners left, and in many cases they camped out in front of the factory or invaded it and kept working. People found in many places that they had the expertise in order to produce whatever it was, but where they really needed assistance was in the business end of things. There are still at least 10,000 people in the Buenos Aires area that are working in these companies.

Somebody had seen this [filming in Argentina] we did early on and said, "I'd really like to see something about these cooperatives in Mondragon and I think I can find you a bit of money to start." What I found really interesting is once we approached the Mondragon co-ops they said "Well, you know we're not that hot for publicity but if you're trying to make something that's going to encourage this kind of model in North America and you plan to cover some of the worker-owned businesses there then we would be glad to be a part of this documentary." We also heard that they had turned down Michael Moore and Naomi Klein, who had wanted to come and film there. I don't know for sure exactly why.

What is Shift Change about?

I think a lot of people are very concerned about high unemployment and growing inequality and are looking around to see if maybe there are better business models. One of them that we have come across is the worker-owned and -run business model. It's one in which you as a worker buy into a business, have a stake and a say in what happens in the business. These types of businesses are not nearly as likely to move overseas or change location because the people who work there actually own it and are making business decisions.

The complex in Mondragon has been in operation now for 50 years. That complex of worker-owned co-ops employs 85,000 people. We're hearing about all of these huge demonstrations and really high unemployment in Spain, but this part of Spain has half the unemployment of other parts of the country.

We found in the businesses that we visited around [the U.S.], including businesses in a whole range of sectors--from engineering firms to bakeries to home health care--people develop what works for them in their sector and their community. They've been able to cope better with the economic challenges that we've got going right now. It made me feel hopeful.

What was it like visiting Mondragon?

We were able to film inside factories, talk with managers, talk with workers, and talk with people on the street to get a sense of an economy that is a majority cooperative economy. 60% of the people there actually work for these worker co-ops and it does seem to make a huge difference in the community culture. It was pretty amazing to be in a place where so many of the anxieties that people in this country are facing, with "Will I have health care, will I have a job, can I put my children through college," people are not having to deal with those things. It has to do with the sense that there is an economic system where you have a say in what happens in your workplace.

Was there anything that surprised you in Mondragon in terms of the economic model and way it's working for them?

What really surprised me was just how complicated and developed this system was. They began with one industrial production facility in 1956 and then added on some more production facilities, but very early on they realized they needed a financing institution. Shortly after that they also founded a social service agency. At that time in Spain, cooperatives were not covered under certain kinds of social security laws, so they created their own institutions. Now there are 120 cooperatives in this system. Everybody who works on auto parts has their group and certain things they work on together, but then the whole entity, the Mondragon Corporation, has an overhead group. It's not really like a holding company because it continues to be answerable to each of these individual businesses.

Another thing that's kind of remarkable about that system is that they limit the difference between the lowest and highest paid workers, including the general manager--at this point in time, I think it's eight to one. I talked to the CEOs and said, "If you worked for a private company in Spain you'd be earning at least twice as much." And then of course we know in our country people could be earning 400 times as much or whatever, and they said, "You know, we are paid a dignified salary and there's more to life than money." I got that same response from all of the executives whom I asked. That was shocking.

It's hard to believe that could ever happen here in the U.S. with such a large network of co-ops.

In this country, the development of these kinds of regional networks are really just beginning. These new co-ops being developed in Cleveland--the Evergreen Cooperatives--they are being developed as a way to do community development and to work with people who have been largely marginalized from the workforce with all of the jobs moving overseas. They are organized into a network of sorts that's somewhat similar to Mondragon. But they're new, they've only been around for three or four years. They're opening the third of these cooperatives, and the total employment is 150 people, but they have in mind to keep expanding and adding more.

There's something called the Network of Bay Area Worker Cooperatives. There's something in Madison [Wisconsin] called MadWorc [Madison Worker Cooperatives], and they are very active. There are some co-ops there that have been around for 30 years, and they're only now working on this cross-sector organizing. People have realized that it's a lot harder to survive on your own. There's promise out there, but we don't think this is the only thing anybody can do. It is an approach to business that for some people and in some circumstances makes sense.

1 Comments

1. 1. billsmith 06:28 PM 10/12/12

   Distributism as a philosophy provides a good point of comparison with both socialism and capitalism. One might say they're internally socialist and externally capitalist, but that would be an oversimplification.
   
   Young makes an excellent observation about any sort of economic experiment: "What really surprised me was just how complicated and developed this system was." On the other hand, there are those who say, 'Everything will work perfectly. All we need to do is make sure of this one principle...' But reality is never that simple. There is no one magic solution. Many economically experimental communities have fractured in far less than 56 years from conflicts about ideological purity.
   
   Despite its guiding principles, the Mondragon Corporation of co-ops is not an example of distributism in its pure philosophical form, but this is likely what has allowed it to survive and grow in the real world of imperfect people.
   
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   I wouldn't mind seeing American companies publish their pay ratios. Shareholders might very well conclude that the CEO deserves to receive 300 times more in annual pay and benefits than the janitor. But the transparency would at least encourage them to ask the question.
   
   And on the scientific side... I would also like to see more statistics by objective third parties about the co-ops making up Mondragon. Being that they all operate under different rules and in a variety of markets, I wouldn't be surprised to see their members with different levels of economic security. It would be interesting to see the relationship between policies and results. Even in a good economic climate, which this is certainly not, I very much doubt that every co-op is all one big happy family where no one wants for anything.

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