Friday, September 9, 2011

Worker-Ownership: Reducing The Cost; NOT Spreading The Cost ...

There is suggestion from the Board of WSM that workers will be encouraged to pay the $500 cost of Worker-Ownership if they are allowed to pay it over two years. My feedback is that workers will only be encouraged if the cost is actually reduced.

The Board will be meeting to discuss this issue next Wednesday (September 14). Time for one last letter, to let the Board know what workers are truly feeling:

"Dear Board,

Since publishing my last letter to you about the cost of Worker-Ownership on my various blogs, I have had some feedback from fellow workers which may interest you.

At the same time, I know that the sole candidate this year for the position of Worker-Owner Director has made the rounds of some Units, discussing his views on the same subject.

It is possibly the case that, in the absence of more formal consultation with workers in our co-op, this combined feedback may represent the only contact you have with the views of the workforce on this issue.

While on that subject, I would mention in passing that I am somewhat surprised that there has not been more formal consultation – even a vote – with the workforce, on an issue that is of primary concern to them.

Indeed, I wonder if this is not in non-compliance with Board Policy which requires that the workforce be consulted meaningfully on matters which affect them (2-3 (4)).

There is, of course, still time for such consultation. And when you meet soon to consider this issue, it may well be that you decide the best course of action is to initiate a consultation exercise, setting out the various options which I know you have been discussing, getting more formal and comprehensive feedback, and then holding a vote of all workers.

In the meantime, you have the feedback from me and from the sole candidate for Worker-Owner Director.

Our feedback is necessarily subjective and anecdotal. But this does not dismiss it. Merely sets it in context.

You will know, well, some of you may know (!), that I have been campaigning on the issue of increased democracy within our co-op, which we proudly declare to the public is half-owned by its workers, for some five years now.

I have gone out of my way not only to impart my views, but also to listen carefully to the views of as many workers as I can reach.

That reach has included setting up my own blog, and creating a network of almost 30-40% of the workforce through the platform of my Facebook account.

I have stood for the Board four times, attended every election table, and have, throughout the years, been assiduous in visiting Units and talking with all workers in between elections.

No-one is capable of being an uncompromisingly objective voice for other people. But, as a former lawyer, I think I am reasonably capable of imparting the difference between my opinions and those passed onto me by workers who feel nervous about giving voice to their own concerns.

The views I express about the cost of Worker-Ownership are not merely those given to me in the past few weeks, but are views that have been expressed to me over the past five years.

Indeed, as long ago as 2008 (specifically in the WSM Elections Task Force) I submitted the opinion, based on what I had been told, that a lot of workers were unhappy about becoming Worker-Owners precisely because of their perception that it was too expensive. This viewpoint found quantitative expression in the 2011 Employee Survey.

I did not mention this in my last letter, but I believe that Board Policy requires that everything be done to encourage new Ownership of the co-op. Frankly, I can't find the reference. It may have been 4-9. But that appears to be under new consideration.

In any event, if the Board are aware that there is an impediment to workers becoming Worker-Owners, and they know how to address it, and they do not, then the Board may well be in non-compliance with Board Policy as it currently stands.

In recent discussions with workers, I have raised two options: simply reducing the cost of Worker-Ownership to $200; and spreading the cost of $500 over two years. Indeed, to be fair, I have been raising variations of these two options with workers since 2007.

The result has always been the same. The majority viewpoint expressed to me is that simple reduction would encourage workers to become Worker-Owners. Spreading the cost of $500 over two years would not.

The concern with the latter proposal is that it would confuse workers, who feel that too many would be discouraged from making a commitment to anything for two years.

Again, with reference to Board Policy, I wonder if the Board might not be in non-compliance with Board Policy if it opted for a measure that it has been told might well discourage Worker-Ownership.

Which, of course, might bring us back to the notion that the only way to know what workers think quantitatively is to consult them and to allow them to vote. Don’t take my word for it. Ask workers. As eventually you did with the Employee Survey.

A real concern flows from simple reduction of the cost of Worker-Ownership. There are existing Worker-Owners who have expressed to me their sense that it would be unfair for new Worker-Owners, who are paying less for Worker-Ownership, to receive the same dividend.

To be honest, I think this concern is answered by the nature of the beast.

The first point to make is that you can not have different classes of the same type of Ownership. This would be in non-compliance with co-operative principles and policy of equality.

That is the whole point behind having a single Ownership fee. So that no one individual may build up a larger stake in the co-op than any other stakeholder, and so that every stakeholder benefits at the same rate of return.

Frankly, as I say, I do not see this as an insurmountable issue. If you paid $500, you will get $500 re-imbursed to you when you cash out, plus interest. If you paid $200, then you get $200 back, plus interest. Doesn’t that deal equitably with the difference in initial cost?

Another option might be to re-imburse $300 (plus interest) to each $500 Worker-Owner with the next payment of dividend. Another might be to go through a slightly more tortuous process of immediately re-imbursing all existing Worker-Owners their $500 (with interest to that point), while subtracting the ‘new’ Worker-Owner fee of $200, putting all Worker-Owners on the same footing.

The point here is that there is a difference between some complexity and a little inequity in implementation of a fairer and more policy-compliant system, and an intrinsic inequity in the final result.

The final result cannot have an inequity of return. But you don’t not implement a fairer and more co-operative policy just because the implementation is a little bit difficult.

After all, the Board decided it would be more equitable between Worker-Owners and Consumer-Owners to have a system of return where all Owners received a dividend. Implementation of discounts-to-dividends was not easy. But the co-op found a way and the will to overcome the problems.

There is no good reason why the Board and the co-op should not find the same will to introduce a system of Worker-Ownership for all workers, that is demonstrably fairer, more affordable and more inclusive, and is more compliant with Board Policy.

Whatever the outcome of all this consideration, the principles and policy remain the same: you can not have two classes of return on investment; and the Board is bound by duty and by common sense to encourage Ownership, and to choose an option which it has been told will more likely encourage more Ownership, over an option it has been told will not.

Or, at the very least, it is bound by Board Policy to test competing options with the workforce it will affect with its decision.

I hope this has been helpful. I look forward to an equitable and democratic outcome. I am unable to attend the meeting on the 21st as I will be working, and have already taking time off for personal matters.

All the best,