Why We’re Building A Worker-Owned Cooperative

Curious to know why we’re so passionate about worker-owned cooperatives (WOCOs) and worker’s rights? We’re breaking this down into three parts: the facts about WOCOs, why we believe in them, and how we’re planning to help others, too! It’s a long one, but totally worth it. 

 

What is a Worker-Owned Cooperatives?

A worker-owned cooperative is a business that’s owned and managed by the people who work there. Members of the WOCO have voting rights, and are able to invest in (and profit from) the business directly.

The rise of WOCOs began during the Industrial Revolution as a part of the labor movement in response to the loss of jobs caused by industrialization. According to the 1993 book Putting Democracy To Work: A Practical Guide for Starting and Managing Worker-Owned Businesses, WOCOs were designed to "cope with the evils of unbridled capitalism and the insecurities of wage labor."

The hope was that WOCOs would give skilled laborers and their families back the chance of upward mobility that they were often robbed of by industrialization and capitalistic companies. Spoiler, they were right! Without having to give a lion’s share of the profits to investors who often only contributed money, workers were able to thrive.

You can see so many great examples throughout history of workers successfully taking back the means of production to benefit their communities. The Freedom Quilting Bee, which was founded by Black quilters in the midst of the Civil Rights movement to help provide for their families, was a notable example. Their collaborative success improved the socioeconomic conditions of the underserved and impoverished Black communities near them. 

How Do Worker-Owned Co-Ops Function?

There are only about 400 worker-owned cooperatives in the U.S., but tens of thousands across other countries. As Ed Mayo from Co-ops UK has been quoted saying, “If you’ve met one co-op… you’ve met one co-op.” While there’s no one-size-fits-all, the main tenets are profit-sharing and equal decision-making power. 

Every industry has its own dynamic. For example, one type is the producer cooperative. Small groups of producers (like family-run farms) join cooperatives to improve their collective power. Did you know Ocean Spray, the cranberry juice we all know and love, is an agricultural cooperative with 700 members and 2,000 employees? Together they produce 70% of North America’s cranberries!

Platform cooperatives are the tech alternative to Venture Capitalist investment. While the tech world remains as entrenched as ever in shark-infested waters of high crunch and investment growth at all costs, the high profit margin of tech companies makes it feel like it’s only a matter of time until a team prevails. We’re rooting for The Glory Society, founded by Bethany Hockenberry and Scott Benson, 2 out of 3 co-creators of the critically acclaimed, multi-award winning game Night In The Woods. 

WOCOs vs Regular Businesses 

While WOCOs have their own challenges, when it comes to workers, it’s truly the ideal. Here are some interesting facts about how they perform compared to other traditional businesses around the world:

• They’re healthier. 
• 29% Less Chance of Closure, according to an analysis of all Uruguayan businesses from 1997-2009.
• 80-90% three year business survival rate in France, compared to 66% overall for other businesses.
• They look out for employees.

Pay Cuts vs Layoffs

• WOCOs often had more stable employment, with workers choosing lower wages to weather economic difficulties, rather than cutting jobs.
• According to a 2006 study conducted in Italy, capitalist firms paid ~15% more, although employment there was more volatile. To spare the health of the business, these capitalist firms often laid off employees during difficult times. 
• Addressing Inequality (1:670 vs 1:9)
• A study released by the Institute of Policy Studies (IPS) found that the average gap between the CEO and the median (emphasis - not the lowest) jumped to 1:670. Up from 1:604 in 2020.
• To drive home how absolutely insane that is, in 2018 Mondragon, the world’s largest worker’s cooperative, had a wage gap of 1:9 from their lowest to highest earner, which was voted on by their members. 
• No bosses needed.
• More Trust – WOCOs are one of the only forms of enterprise that foster social trust with its employees.
• No Growth for Growth’s Sake – WOCOs use natural resources more efficiently, and are less growth-oriented than corporations.

Our Why

Now that we’ve dipped our toes into what worker-owned cooperatives are, let’s get personal. As of writing this, Checked Out is a party of 1. The voice you’re reading is our founder’s, Suset – and yes, she’s speaking in third person right now (hi!).

Checked Out started as For the Bad Parts, a candle brand that taught you how to use fragrances to scent-hack an atmosphere or your mood. It was sparked by my ritual (re: coping mechanism) of taking a candle with me from meeting to meeting to help my brain latch onto the comfort of the smell rather than the ever-increasing tensions at the office. 

What were the tensions? Executives exploiting staff while lying to the owners, nepotism, social hierarchies, poor company decisions, and releasing bad products for the sake of a quick buck. Run of the mill corporate greed, but the perfect environment to cement my convictions. 

Like most women my age, I’d come up under the girlboss era. I wanted nothing more than to run my own business and break out of traditional working structures. After leaving college and changing career paths, I looked for more progressive women-owned startups in the hopes that I could learn on the job. And I did! I hustled my way to leading the creative department at a brand I loved, and I’ve worked with great people I respect. 

Along the way, there have been some inconsistencies that bothered me, like blue collar vs white collar working experiences within the same company, rampant misuse of others’ time, the lack of pay transparency from leaders who claim to be intersectional and forward-thinking, and the insistence that pizza parties make up for unpaid overtime. 

Shit I’m not here to perpetuate as a latina immigrant raised by working class parents.

How We’re Building This

As we continue building Checked Out, a worker-owned cooperative is our North Star. It’s the reason Suset (me again!) spends her free time doing this instead of something recreational. We’ve got two big goals in mind – create a business that serves its workers, and help others see a path towards building their businesses this way, too. Here’s how we’re planning our growth stages.

In stage 1, it’s about building our foundation. As a one person organization, I’m investing my time and money to build the dream I see. At this stage, all profit goes back to the business, and I’ll be sharing some details on the decisions I’m making along the way! Once the business can afford to pay me without undercutting its growth, we’ll move to the next stage.

In stage 2, I’ll be establishing a healthy business. With me full-time, I’ll continue to establish relationships with vendors and enhance the business to take on 2 full-time employees. These will be our establishing members, and once they’ve passed the waiting period, we’ll transition to a legal WOCO. Until then, we’ll still be as transparent as possible with our business decisions. 

In stage 3, we’ll be moving towards expansion. While I have no idea what this looks like, this will let us grow our team and business! My personal goal is to directly help create 10 worker-owned cooperatives by 2030. 

If You’ve Made It This Far

Thanks for stopping by! We’re still figuring it all out, but we’re hopeful. Hopeful that we can make this happen on a small scale and that there are others who see this as the future of work.

Want to support further? Your excitement is the best way to help us keep growing. That can mean telling a friend, sharing your favorite products, likes or comments, or even just a DM to say hello! It’s a real person making things for real people.