Thursday, November 18, 2010

Geoff's Weavernomics Lesson #3 -- Paid Holidays ...

So. Thanksgiving is just around the corner. And I got to thinking. It's all fine and dandy giving us Thanksgiving off. But not when we don't get paid. It just becomes a lost pay day for ordinary, hourly-paid Weaver Street Workers. Yup. You guessed it. Another letter to Ruffin Slater, WSM General Manager:
"Hey Ruffin,

You will remember that, during our meeting the other week, we discussed ways of enrolling workers in the 15% sales increase for 2011 by better explaining to us workers - to put it bluntly - what is in it for us, and, indeed, ensuring that there is something in it for us.

We specifically addressed the possibility that, as part of the series of "Market Messengers" helping to educate us workers in financial literacy, it might be useful to have one "Market Messenger" devoted to precisely that topic - i.e. what the 15% sales increase means for individual workers.

I thought, in that regard, it might be helpful if I passed onto you the fact that, during the recent Board Election, a number of workers raised with me questions as to why we do not receive what appear to be normal paid-day benefits that are available in traditional capitalist retail outlets.

In fact, one or two workers said they might be referring to exactly these sorts of benefits in the annual benefits survey, which we received a few weeks ago in our mailboxes.

The sort of benefits discussed were: paid sick days, time-and-a-half on public holidays when we work, and full payment of Thanksgiving and Christmas, which are the two days each year that we workers are given off.

To be honest, I did say that I thought that, while I sympathized with the first two categories of paid holiday, it might be a while before we were able to discuss those sorts of benefits, seeing as we are only just pulling out of hard times.

But you know, I had and have a hard time explaining (even to myself) why Weaver Street Market Co-operative gives workers the day off, when it turns out not to be any kind of meaningful benefit, if we are not paid. All it becomes is a lost pay day.

I did a quick (and very rough) calculation based on 260 employees, and an average of $10.00 per hour, and it would cost us no more than $26,000 for each of the two holidays. $52,000 in total. Or, $1,000 a week, in return for we workers producing a profit in 2010 of $475,000, and an increase in sales in 2011 of $3.75 million. Doesn't seem too much to ask, does it?

So. I'd be grateful - with Thanksgiving and Christmas just around the corner - if you could let me know if you think WSM will this year be able to translate its oft-stated gratitude to us workers into a little extra cash? And if not, perhaps why not?

Happy Thanksgiving to you.

All the best,

Geoff's Weavernomics Lesson #2 -- Balance Sheets and Retained Earnings ...

Once again, I prefer my version of financial terms over those of the Weaver Street corporate office, which entertained us 'low-skilled' workers to another installment of financial literacy in the most recent issue of our Market Messenger.

So ...

'Retained Earnings' = the bloody pay raises we LSWSW's should have got out of the $475,000 profit we LSWSW's earned for The Weave in 2010, but which the corporate office kindly retained.

'Negative Retained Earnings' = future pay raises and patronage dividends which we LSWSW's will earn, but which the corporate office will retain to dump down the massive negative black holes called DEBT and FOOD HOUSE OPERATIONAL COSTS and MARKETING.

Now, am I retaining a certain negativity here, earned out of my loss in the recent Board Election? No. I am a firm believer in the principle that you run the best argument you can. If you lose, you drop it, and move on.

The central tenet of my 2010 election campaign was that we needed to address the tremendous imbalance in the financial state of WSM, not by asking workers to work 15% harder in 2011, but by finding other ways to reduce the huge debt, the operational costs of the Food House (I really would like to know about that flour hopper) and the burgeoning cottage industry that has become our Marketing and Merchandising effort (all these signs, all the time, really?).

That argument did not find favor with the body of the worker-owner electorate, as it is currently constituted. So, I move on. Indeed, when I was discussing with Ruffin Slater (WSM General Manager) a week ago those figures that appear in this week's Market Messenger, I specifically avoided re-running my election themes.

Those figures (including the ones he did not include in the current Market Messenger) showed that we would only be in a position to offer larger pay raises and a patronage dividend in 2011 if we make the full 15% sales increase. If we make only a 10% sales increase, then WSM will make an overall loss for 2011. Bye bye meaningful pay raises. Bye bye patronage dividend.

I could have argued with Ruffin (again) that we could avoid such a fragile scenario if we spent the year thoroughly reviewing Food House costs and Marketing expenditure, and exploring other means of dramatically reducing or re-capitalizing our debt.

But I didn't run those arguments. Because they had not found favor in the Board Election. Instead, I focused on sharing with Ruffin ideas about how better to explain the figures to us workers, and how to find more respectful ways of enrolling us in achieving the sales increase of 15%.

I also took the opportunity of encouraging him to reduce worker-ownership to $200, and to look upon a Workers' Committee with a favorable eye.

I wouldn't call any of that retained negativity.

So, why this Note? Because I feel we LSWSW's deserve to know the whole financial picture (isn't that authentic financial literacy, after all?), and because I feel we all need to know what is at stake (a 10% sales increase in 2011 won't cut it), so that we are not caught unawares at the end of 2011 if we don't make that 15% sales increase.

Again, that hardly makes this Note negative in any way.

Now, it's not going to be easy to make that 15% sales increase. The majority of economic forecasters are still talking about a new economic downturn in 2011. The thinking is that, if Thanksgiving and Christmas sales are lackluster, then businesses may retrench in 2011 (for which read lay off workers), demand in the economy will go down, and high-end retail industries (er ... WSM qualifies) will get hurt come Spring 2011.

I hope the forecasters are wrong.

In addition, notwithstanding the co-op wide 9% sales increase reported by Ruffin for the first financial quarter of 2010-2011 (July-September 2010), the weekly co-op wide sales increase since the end of September has been settling downwards towards 7-8%. Check the weekly co-op wide sales figures posted in your unit.

Again, I'm not being negative. The exhortation with which I leave you is this: we chose in this last Board Election not to make our co-op more financially sustainable by reducing debt and unnecessary expenditure. Those of you who were voting worker-owners chose instead (for the rest of us) to make up the financial gap by putting all our efforts into the 15% sales increase.

So, it behooves us all. if we want to see more staff, more pay and a non-retained patronage dividend (!) in 2011, to bust ass and make that 15% sales increase.

So endeth Geoff's Weavernomics Lesson #2 ...

Monday, November 8, 2010

Equality In Worker Input - Why A Weaver Street Workers' Committee ...

This letter to the WSM Board about the desirability of a Workers' Committee is a tad wonkish. I get like that.

But, it's a cold and rainy day, and the letter follows on neatly from the one yesterday about reducing the cost of worker-ownership in the Weaver Street Market Co-op:

"Dear Board,

This is really the second part of my thoughts about worker-ownership in WSM going forward - although I wasn't intending to produce a series!

The way worker-ownership has evolved, we essentially have two classes of worker in WSM at the moment: worker-owners, who have something of a voice (but not enough, in my opinion) through their vote in Board elections; and ordinary workers, who have little of any kind of voice, save for the occasional feedback exercise.

I have been working on an idea (shared with a number of the folks who have been talking with me during this past Board election) about a Workers' Committee, to overcome this separation and to give workers a voice that reflects their status in the worker-consumer co-op hybrid that is WSM.

In our discussions yesterday, Ruffin mentioned that, early on in WSM's history, a proposal had been made simply to make ALL workers into worker-owners after 6 months, and then to start deducting the fee from their paycheck.

The worker-owners at the time voted it down. And even Ruffin expressed concerns at doing something mandatory in this way.

It got me thinking about my own idea last year just to give the vote in Board elections to all workers. But you know, I'm now against that idea. Here's my thinking.

When I first joined the co-op, I knew I wanted to become a worker-owner. Mostly for the dividend. Now, as soon as I became a worker-owner, I found myself much more interested in the co-op's performance. Of course I did. Better performance = more dividend.

The other part of that equation was that it would only lead to more dividend if the 'right' decisions were taken by admin and the Board. So, I started taking an interest in their decisions, also.

And that is essentially worker-ownership.

It occurs to me that, if worker-ownership or its benefits (the vote) become a passive 'gift,' then it dilutes that active interest.

It likely leads to a group of worker-owners who are less interested in performance and decision-making, and maybe use their vote for extraneous reasons instead.

Let's have a quick look at the recent worker-owner elections. I can - and have - argued that there is a bias towards a management/corporate bloc vote. I have also wondered aloud why we have managers and workers voting in the same election.

But, let's leave all that on one side. I have advocated in those regards, and that advocacy has not found favor among the existing worker-owner electorate. Where I come from, when you lose an argument, you move on.

So, let's look at the results in a different way. Not so much as manager -v- worker, as worker-owners more interested in financial return -v- workers (maybe) more interested in social return.

I'm not completely convinced that is all that wrong. I don't think it demands the system be turned upside down. And that we replace it with a new system (be it Ruffin's worker-ownership-for-all, or my vote-for-all), that could have the effect of artificially creating a new 'bloc' of workers, who have no 'investment' in worrying about financial performance, but are concerned only with social health.

I would find that replacement system no more satisfactory than the existing system artificially dominated as it is by the management/corporate bloc vote.

That said, however, I do think we need to start addressing the concerns of the minority of worker-owners who consistently vote against that management/corporate bloc.

'Consistently'? One thing is clear, there is a distinct pattern to the voting in the past four Board elections. There is an establishment/management/corporate vote (call it what you will - I'm not being tendentious) that totals between 30 and 35 votes; and the non-establishment/worker/protest vote (again, call it what you will) that gets about 17 to 20 votes.That = consistent.

The reason I stress that it is consistent is that I think it behooves the Board and admin to find a way to hear the voices that make up that consistent vote - whose concerns are clearly not the same as the majority management/corporate bloc vote.

Even in conventional capitalist corporations, there are legal obligations for majority shareholders to take note of the concerns of minority shareholders.

At the moment, there is little by way of communication vehicle to allow the voices in the minority vote to be heard - let alone the voices of all the non worker-owners who say they can not afford the $500.

Hence, a Worker's Committee.

As I envisage it, the Committee would not be separate or outside of the existing system or current worker-ownership model, but would feed into and buttress it.

To begin with, I would see this Committee made up of self-appointed worker-owners, offering themselves from all of the units. In time, the process could be one of election by each unit of one or more representatives - who would have to be worker-owners.

Those having the vote on the Committee would have to be worker-owners, although all workers could attend, discuss and take part in any activities organized by the Committee. This would allow non worker-owners to have a voice, but a limited one. Plus, they would see the benefits of a collective worker-owner voice, and might be more persuaded (along with a reduction in the worker-ownership cost) to become worker-owners.

In talking with other workers and worker-owners, they see the Committee as a useful talking shop (not unlike the Discussion Group that Jacob helped to form a time ago); a vehicle for lobbying admin and the Board; a way of promoting worker-ownership, while still giving voice to those who don't or can't become worker-owners; and for some, simply a means of having fun and encouraging better understanding and communication between the now-separated units.

My concern is and will be that the Committee continues to function as part of the existing governance system, and that it does not set itself up as something separate to that. Hence the emphasis on voting rights being restricted to worker-owners.

While I envisage this Committee being organized by workers for themselves (and for the overall benefit of the co-op - since an informed, involved, included and energized workforce can only work to the co-op's advantage), it may be that, in time, it could receive some form of Board sanction.

There are many co-operatives where the Board has a sub-committee known as an Owner's Committee, the purpose off which is to allow owners to have wide-ranging discussions, which can then feed back into main Board business.

And if that sanction should occur, there is no reason why a similar Committee could not be encouraged for consumer-owners.

These are early days. But I am hoping that admin and the Board will welcome any such Committee, and give it - and the newly-energized worker members - every possible support.

All the best,

I have written more about this Workers' Committee. Please get in touch if you are interested in being involved -]

Affordable Weaver Street Worker-Ownership?

I had a really constructive meeting with WSM General Manager, Ruffin Slater, this morning. Among other things, we talked about the cost of worker-ownership in WSM, which is $500, compared to only $100 for consumer-owners.

I have now written and presented a proposal to the WSM Board for reducing the cost of worker-ownership, to allow more workers in our co-op to be involved in co-op discussions, and so that more workers may be able to vote in Board elections in future:

"Dear Board,

I have an idea that addresses two important questions: (a) How do we increase capital; and (b) How do we encourage equity between consumer-owners and worker-owners in the investment they make in their co-op?

My suggested answer (subject, of course, to consultation with consumer-owners, worker-owners AND workers) is to increase the baseline of consumer-ownership fees to $200, and to reduce the cost of worker-ownership also to $200.

Bingo. Equity and capital.

I had a very constructive meeting with Ruffin this morning, and this was one of the issues that I raised. I talked about worker-ownership. Ruffin addressed consumer-ownership.

At the moment, we are asking much of all of our workers, without being able to offer them too much in return. At least, not immediately.

One of the matters most addressed to me in the recent Board Election was that workers (especially new workers) find $500 for worker-ownership just too high. It does no good to talk about it being spread over a year. It's a turn-off.

Now, we want workers to be invested in all the projects underway in our co-op. Greater emotional investment = increased interest in implementing projects.

And they want to be involved. I have difficulty in finding workers who joined our co-op just because it's a job. They join because they believe in co-operation, and they want it to succeed.

Over and over, they have told me that they are up for any challenge, if they understand the reasons for the challenge, and if they feel they are a part of the team making decisions about the challenges. And they get that means being a worker-owner. But they can't afford $500.

There is a Board Policy that says the Board should encourage ownership. There is another that says that there should be equity between the two forms of ownership: consumer-ownership and worker-ownership.

The solution is simple: make the cost of both forms of ownership the same.

Do we give the same return to all worker-owners: those who paid $500, and those who pay the new level of fee? Yes. Because in both instances, the cost of ownership is returned when a worker-owner leaves WSM or divests.

Should we consult? Of course. And the consultation should be of all workers, not just worker-owners. Let's be real. I have heard more than one worker-owner say to me: we don't want more worker-owners; it will dilute the worker-owner dividend. Naughty, guys. Naughty.

But what of the consumer-owner fee? It has been the same for ... how long?

If there is one thing I have learned in standing in four Board elections, it is that co-operators respond to a challenge. Surprises the heck out of me. I respond to a holiday in the Bahamas. But both consumers and workers respond to being challenged - so long as they know why.

More often than not, I have heard fellow workers say to me, what I really want to do is be able to offer my customers the sort of service of which I can be proud. Just give me the tools, and I'll be happy. Not, give me a pay raise; but give me the tools to serve my customers.

Same thing with consumers. They know we have been through tough times. They know we don't want to go back there. They just want to know how they can help. So, tell them. Ask them to agree to increase baseline consumer-ownership to $200.

AND. Then go one further. Ask those who are already owners to make a one-off payment to bring their original investment in line with the new ownership. Just to help out.

So. That's my idea. A baseline ownership cost that is equitable, that encourages worker-ownership and that raises some much-needed capital.

Think about it during your retreat in January.

All the best,

Restoring Sanity in the Weaver Street Market Co-operative

On the subject of restive electorates and votes of no confidence, it is interesting to note that, in the past three annual Elections for a Weaver Street Consumer-Owner Director, the incumbent (or former incumbent) has been defeated by a challenger.

What would the national press say if the US suffered three one-term Presidencies in a row?

At the same time, the past four annual elections for a Weaver Street Worker-Owner Director have seen the protest vote against the Corporate Candidate increase in percentage terms each and every year.

In any other electoral environment, such a rejection of prevailing governance philosophy and operational execution would have objective observers screaming for change -- and those in power scrambling to oblige.

But not in Weaver Street, where nothing changes.

Which is why I am now trying to do my bit by attempting to widen the base of advocacy among workers by encouraging the formation of a Workers' Committee, and by seeking a reduction in the cost of Worker-Ownership from $500 to $100.

But this should not be my challenge alone. If you are a worker or consumer interested in responsive governance and operations in your Weaver Street co-op, then get involved. Find a way.

Forget Washington for just a moment. Let's find a way to 'Restore Sanity' in our own co-op ...

Tuesday, November 2, 2010

Weaver Street Worker-Owner Director Election Results 2010

The count is over, and democracy has spoken. My congratulations to Steve Bos. My gratitude to the WSM Elections Committee for a fabulous job well done. And my sincerest thanks to all of you who voted for me. Do not give up hope!

I got two more votes than last year. By my calculation, I will be on the Board shortly before I reach retirement age. Yay for Depends and Viagra!

Steve Bos : 35

Geoff Gilson : 19

But seriously. The vote for me ... correction, the vote cast by those protesting the direction of our co-op (this is not about me) has increased as a percentage of the overall vote every year for the past four years:

2007 - 32%

2008 - 33%

2009 - 33%

2010 - 35%

It may not seem like much of an increase. But bear this in mind. Over the past couple of years, the number of ordinary shopfloor worker-owners has decreased as hard times have forced them to cash in their ownership. Put like that, the protest percentage should have been shrinking each year.

Those who belittle the impact of this protest vote are the same people who consistently say that the only protester is me. That much is clearly now nonsense.

The turnout of worker-owner voters this year was 60%. In any other election (think Congressional), 35% of a turnout of 60% would be considered a major statement of protest. [Especially as it does not take into account the 160 (out of 260) workers who are not worker-owners, because they can't afford the $500 needed to buy a vote ... I'm sorry, I meant to buy worker-ownership.]

Yet, in our co-op, which workers half-own, a protest vote of this magnitude has no voice whatsoever. It is effectively disenfranchised. That MUST change.

If those who voted for Steve feel they have a mandate for a voice on the Board, then those who voted in protest have earned a mandate for some sort of voice in our co-op.

Maybe my suggestion of a Workers' Committee could be one way of allowing ALL the workers in our co-op to have a voice ...


Without taking anything away from Steve, it occurs to me that some of you who do not know Weaver Street, or are new to it, may not understand the vagaries of the Worker-Owner Elections system, and may, therefore, not understand why I feel able to regard 35% as a magnificent protest statement that should not be ignored.

We have 260 workers, including management and Corporate Office staff. You have to be a Worker-Owner to vote for the Worker Directors on our Board (we have two, out of total of seven Directors). It costs $500 to become a Worker-Owner (it costs $100 to become a Consumer-Owner; huge point of contention; allegations the $500 is a fix to stop shopfloor workers getting to vote - I have advocated for a reduction to a much more reasonable $100).

All workers vote in the same Election. That means management and shopfloor workers vote in the same Election. Another huge point of contention. There are those who say we should have separate representation.

We have about 100 Worker-Owners. There is pretty much a 50:50 split between those who become Worker-Owners just for the annual dividend (and generally do not vote), and those who join both for the dividend and to vote. So, the turnout in Worker-Owner Director Elections is usually about 50-60%.

Thing is, not least because of the $500 price tag, there is an inbuilt management/Corporate Office bias in the voting. Of the 50 or so Worker-Owners who vote, some 30-35 of them are managers or Corporate Office staff, and they generally vote for the status quo.

Of course, they vote for the status quo - they created it.

Now again, not taking anything away from Steve, he is one of the most popular people in Weaver Street. He should have sucked up the totality of that management/Corporate Office bloc vote, and then got another 20 personal votes on top.

The truth is the management/Corporate Office bloc vote most likely shrunk to about 25-30. And then Steve got maybe 5 to 8 personal votes on top of that.

This is not a personal reflection on Steve. But is a massive indictment by our co-op's workers on the direction of our co-op.

Set that against the fact that the protest vote - thinned by the $500 price tag, and further thinned by hardship this past year - actually increased, and it is a further indictment of the direction in which management and the Corporate Office are taking our co-op.

I know it's numbers. I know it means shopfloor workers still do not have representation on their Board (I do not regard a manager and a Corporate Office staff member as shopfloor representation). But it does explain why I say this vote represents a valid protest. And why I say that protest deserves a voice.