Worker cooperatives are enterprises that are owned and controlled by their employees. Each member purchases a share in the cooperative, and assets are collectively owned by the
membership. Worker co-ops operate on the one person/one vote principle, regardless of the
member’s investment. The primary purpose of a worker co-op is to provide employment for its
members.

The International Organization of Industrial, Artisanal and Service Producers´ Co-operatives
(CICOPA) has a membership of over 70 organizations in 57 countries. They estimate that the
number of member/workers in employee-owned organizations has risen from six million in 1975
to 50 million currently. Much of this new impetus was due to the privatization of a number of
economies (eg China).

Employee ownership has become increasingly popular in the United States. Companies that
provide their workers with a share of ownership can garner tax advantages while providing a
cost-effective employee benefit. In conjunction with a participatory management style, they may
also enjoy productivity gains.

About 12,000 U.S. companies offer employee stock ownership plans (ESOPs), a common
method for granting employee ownership. Of these, 95% are closely held (non-public) firms, in
which the median employee ownership percentage is 30-40%. About 3,000 ESOPs are now
majority employee owned.

A less common but increasingly credible alternative for employee ownership is the workerowned
cooperative model. There are approximately 400 worker co-ops in the U.S. In general,
they are 100% worker-owned and ascribe to the cooperative principle of “one member, one
vote”. They vary widely in their management and pay structures, from remarkably “flat” to
more conventionally hierarchical. The country’s largest worker owned co-op is Cooperative
Home Care, a home health care agency in the Bronx borough of New York City. With 780
employees, it ranks 93rd on a national list of majority employee-owned companies.

Most worker co-ops are much smaller, ranging from 20-200 employee-owners. They are found
in a wide variety of industries. In this publication, we will look at four diverse worker
cooperatives in the U.S. Following these case studies, we will consider key criteria and best
practices for starting and maintaining successful worker-owned co-ops.