June 30, 2022 • 30 mins
For the last seven weeks, we’ve gone around the world to see how the pandemic led to more or less economic equality. There were some pleasant surprises and some devastating stories. In the season finale, we ask: what about the next crisis? How do we ensure more stability and security when something earth shattering inevitably comes along? That led reporter Jeannette Neumann to a small town in Spain’s Basque region, which boasts a strong track record of security and stability, thanks to a crisis-tested economic model.
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Speaker 1 (00:05):
About six months into the pandemic, an Ohio based cooperative
network received an influx of requests from small businesses that
wanted to turn themselves into worker owned co ops. For
a lot of folks, they have been unhappy with how
their current jobs, the current economy has been working for them,
and the idea of being part of something truly holding
(00:26):
workers as a most important piece is really really attractive.
That's Ellen Vira. She's the director of coop Organizing at
co op Sincy, a network of around dozen cooperative businesses
in Cincinnati, Ohio, where workers manage, own, and ultimately share
in the profits of their labor co ops. Since has
(00:46):
been around for about a decade, but in that fall
of alone it got applications to help another dozen businesses
go coop. One of the businesses that reached out was
the Shine Nurture Center, a Monostori style day air next
to the lush mount Airy Forest in Cincinnati. As the
pandemic dragged on, its founder and owner wanted to move on.
(01:07):
Like many people, she was reevaluating her life and decided
to go back to school, but she didn't want to
shut down the center she'd built and run for the
last six years, so she decided to sell it to
the teachers who worked there. My name is Beth Heya.
I work here at Shin Nurture Center Cooperative and I'm
currently the office manager and we are a nature based center,
(01:29):
so we're mostly outside in Mount Airy. We're very lucky
we have a path right out of our parking lots
and we get to go back there a lot with
the kiddos. Beth is one of four teachers who went
from working in the center to owning it. Before, she
says she was at the whims of administrators and parents
and at times found herself in less than ideal working conditions.
(01:50):
Now she's a business owner. She and the other teacher
owners have a say in how things get run. That
includes increasing pay and benefits and making sure class rooms
aren't understaffed, and at the end of the year, she
and the other owners will share in its profits too.
There's not a lot of like groping about, like why
we're doing something, because we all understand why we got
(02:12):
to those steps. You can see why co ops would
be attractive during a pandemic that created enormous economic uncertainty.
It gives people some power over their work lives, if
they can work from home or take sick days, or
when they clock in, and what they get paid. Looking
at the childcare crisis, being an educator, there's just a
(02:32):
lot of pressure put on childcare and there's not a
lot of voice given to the folks who are in
charge of it. So I think for post pandemic I
think this might be a really good solution for teachers
at centers who feel like they want to have a voice. Yet,
cops are still relatively rare in the US. Just around
(02:54):
a hundred people work at the companies and coops and
see for example. But there is somewhere worker co ops
abound and it's a place of notable equality. Mandragone is
a group of around a hundred cooperatives in the Basque
region of Spain that's been around for half a century.
It covers nearly eighty thousand workers across all sorts of industries.
(03:17):
Nobody there is wildly rich, but there isn't much poverty either.
It's the kind of place that often gets dismissed as
a special place doing a special thing that can't be
replicated elsewhere. But now more and more people are thinking
maybe they can be the next mandragone jobless claims coming in,
(03:41):
I mean really jumping from the week before, pretty brutal,
three point to a million record six point six million
Americans filed for unemployment last week and then working for
the worst infected by the pandemic. Prices of public housing
resail flats have hit an old time high in the
first well. Now to the billionaire boom. According to Bloomberg,
(04:04):
super riocht charters are up over three and a billionaire
was created every twenty six I was during this pandemic.
Is time for a wealth tax in America? Welcome back
to the paycheck. I'm Rebecca Greenfield. For the last seven weeks,
(04:28):
we've gone around the world to see how the pandemic
made things more or less equal. The answer depended on
all sorts of variables, a country's pre existing economic conditions,
how it managed the virus itself, and what financial decisions
were made facing a global economic crisis. In some places,
(04:50):
there were some pleasant surprises, like in the US, where
the poorest got some stability and economic security for the
first time in decades. In others, like India, economic desperation
lad people to make life altering choices that derailed their futures.
The question as we head into the next phase of
(05:10):
the pandemic is how lasting will any of these trends be.
That's what led us to work our own co ops.
Interest in worker own co ops tends to spike during
times of crisis. At a very basic level, worker co
ops they tend to emerge where there's a market failure.
That's Mike Paul Mary, an associate researcher at the Ohio
(05:32):
Employee Ownership Center at Kent State University. He says that
people who feel left out of the economy seek out
alternatives to traditional business models. After the two thousand eight recession,
for example, he says, the number of co ops in
the US has more than doubled. To him, they are
key to closing wealth gaps. A lot of our beIN
(05:52):
a quality today is driven by inequality and wealth and assets.
What employee ownership allows you to do and not just
provide a higher wage via income, but it gives individuals
who otherwise wouldn't have wealth and assets wealth and assets,
providing them that cushion and closing that gap as well.
And some employe ownership kind of attacks I would say
(06:13):
economic inequality at its fruit. While the pandemic isn't over yet.
Mike says there's been a notable uptick and interest in
the co op model. People see it as a gateway
to greater equality and security when the next pandemic or
whatever crisis comes around. But how realistic is that and
how did it work? My colleague Jeanette Newman went to
(06:36):
the Basque region in Spain to visit them Undergone co ops,
the mecca of worker cooperatives, to see how they fared
during the pandemic and what lessons can be learned about
creating a more equal world. Here she is with the story.
(07:04):
I'm standing on an assembly line watching some workers build
washing machines. The company is called fog Or Industrial. It's
one of the hundred or so cooperatives that are part
of the Moundergo network. One of the workers on the
assembly line is Baltasar Garcia Leone. Balta, as he's called,
is fifty nine years old. He has a clean shaven
head and an athletic build thanks to frequent outings with
(07:26):
his cycling buddies. He's been building washing machines at Mundergone
cooperatives for more than three decades. He's telling me how
the assembly line works. Balt and his colleagues on the
line build twenty two washing machines every day. They're sold
to hotels and restaurants. When the pandemic hit, Balta's assembly line,
(07:49):
like many around the world, down shifted. Every Friday, they
sent us home, so we missed out on a lot
of ours. Bolt and his colleagues also worked fewer hours
on the days they went into the factory. Those were scary,
uncertain times. Balta was worried about the virus like everyone else,
but he was less worried than many people about his
(08:11):
paycheck and his savings. Thousands of workers at Mondragon felt
the same in those chaotic first months. As COVID nineteen
up ended everything around the world, Mundergone was, by comparison,
an oasis of calm for workers. The reason moundergone has
a playbook to protect jobs that it's been honing for
more than half a century. Mundragon's first cooperative was founded
(08:32):
in the nineteen fifties by a priest and some of
his acolytes. Since then, crisis after crisis, the cooperatives have
found a way to keep unemployment and inequality in check.
The pandemic was no exception your Bilk. When I go
to other areas, I noticed much greater social differences. Here
(08:55):
the manager can be my neighbor. Elsewhere, I guess they
live in gay good communities. Joblessness here is much lower
than in the rest of Spain, and the level of
income inequality is on par with countries such as Finland
and Norway. The differences that the Nordic countries have relatively
high taxes they redistribute wealth. In the undergone region, taxes
(09:16):
are lower than in the Nordics. The cooperatives create wealth
for a lot of people. One way they do that
is by digging up their annual profits among workers. Assembly
Line workers like Balta, for example, have retirement savings that
are in line with top managers. The objective of the
cooperative is not to produce rich people, is to produce
(09:36):
rich societies. At the end of the day, even if
you are not rich, if you belong to a rich society,
you will be happy that he works at Moundergon Assembly.
It makes solar panels as well as machinery to help
firms automate their production. Most of the cooperatives in the
network are industrial. One of them is even making rocket
parts for Blue Origin. That's the aerospace company owned by
(09:59):
Jeff Bezos. As a rule, managers across the Moundergone network
can only earn six times more than the lowest paid worker.
At some places, like yours cooperative, the gap is even
smaller three to onegre and many of his colleagues or engineers,
they do similar work, he says, so they are in
similar pay or associeties. Here very realitarian. We don't have
(10:20):
a lot of rich people are not very rich. But
in the other hand, we also don't have poor people.
The CEO or the engineer or the man who makes
the photocopies. We all belong to the same social group.
But how do those egalitarian ideals hold up when times
get tough? How did the cooperatives and their worker owners
(10:42):
survive the worst economic crisis in a century? I speak
to under Chevita. He's an executive at headquarters called Moundergone Corporation.
The corporation overseas the one hundred or so cooperatives that
form part of the Moundergone network. When a crisis hits,
all the co ops rely on a safety managed by headquarters. Understays.
(11:02):
The goal is to preserve jobs and That means the
safety net has to be flexible. For that we have
different mechanisms. If there is no work for me in
my corporative, I have the right to work in another
corporative of the corporation. If there is no work for
me in the corporation, I have the right to be
trained to be more employable. And if still there is
no work for me the corporation, I have the right
(11:24):
to get an unemployment benefit for maximum two years. This
is great. That does sound great, and under makes it
seem so easy, But the cooperative model doesn't always work perfectly.
About a decade ago, the co op where Balta was
working went bankrupt. It was in the aftermath of the
global recession. That was a wake up call for Balta
(11:44):
and many others. Failure is possible. So even when things
appear to be running smoothly at Montrigone during the pandemic,
in the backup workers minds, the threat of failure loomed.
(12:07):
I visit Bolts at his apartment to learn more about
how he survived that bankruptcy and the pandemic. He lives
just outside the town of Mondragon. The area is surrounded
by forested mountain tops which gave way to pastures and farmland.
Further down in the narrow mountain valleys sit box the
industrial warehouses where the cooperatives manufacture their products. I ring
(12:28):
Bolt's doorbell. All right, we sit down at his kitchen table.
He proudly points to a white washing machine from his
cooperative tucked underneath the countertop. Balta joined his first co
op in n He worked there for more than two decades.
In two thousand thirteen, it went bankrupt after struggling through
(12:51):
Spain's double dip recession bolting. Around nine workers lost their jobs.
It was the biggest crisis the cooperatives had ever faced.
Enjoy of course, I was scared. I had done an
interview or two at that time, But I mean I
was forty eight years old. I was already pretty old.
(13:12):
I thought it was going to be difficult. But Mondragon
eventually found new jobs at other cooperatives for most of
the workers, including Balta. He got a position at Fogor Industrial,
where he is now. Other workers went into early retirement. Still,
the bankruptcy meant that Balta and other members lost the
money they had been stashing away for years in their
retirement savings. Accounts. That was a lesson for everyone at Mondragone.
(13:36):
When a crisis hits, workers after react quickly to show
up the finances of their cooperatives and prevent things from
getting worse. During the pandemic, Bolton his colleagues tried to
put that lesson into practice. In the U S and
other countries. Unemployment spiked in the early days of the pandemic,
Business slowed down or came to a halt, and executives
had to cut costs, so they laid off workers. Balton
(13:59):
other operative members or workers and owners. So it wasn't
an option for them to fire themselves, but they still
had to find a way to cut costs, otherwise they
could end up saving themselves. But tanking the cooperative seen
our interest in every respect that the cooperative does well,
our livelihood depends on so making money that has to
(14:23):
be the baseline, because a company can have a really
nice financial targets, but if it doesn't earn any money
in the end, it's gone. It would be destroyed. This
is where Mundergones Crisis playbook kicks in. The leadership team,
which is made up of assembly line workers like Balta
and members who have more executive experience meant to make
a plan. First, they decided to lay off a few
(14:46):
dozen workers who aren't members of the cooperative. Only around
one third of workers at Undergone are also members. Some
people don't qualify. New members have to be voted in
by existing members. If someone as a reputation as being
a bit irresponsible or isn't considered a team player, they
might not be accepted. Others don't want to pay the
(15:07):
roughly sixteen thousand dollars it costs to become a member.
That's a kind of down payment to join the cooperative.
It goes into a savings fund for the worker. Next.
Balta's co op trim salaries on days they didn't work,
which ended up being more than anticipated they would get
of their salaries. We missed a lot of ours. We
couldn't recover a lot of those hours. How did the
(15:29):
co op afford to pay Balta and his colleagues for
all those days they didn't work after all revenue had fallen.
Wondergoing Headquarters stepped in and tapped a kind of insurance program.
It has co ops that were doing well, such as
those producing medical gear and bicycles, transferred funds to co
ops like Balta's, where workers had missed a lot of
days under the monder going executive we spoke too earlier
(15:53):
explains that mechanism we are bright for nine thousand workers
in the enemic year and it had a cost of
thirteen point to million euros. So when we are talking
about solidarity, it is also about money. Honors comments should
(16:13):
dispel any images you might have in your mind of
the cooperatives as a kind of utopian commune in the
Spanish countryside. On another's at mundergo and talk about money
and profits with the same ease as any capitalist. The
co ops are first and foremost a business. They need
to be profitable. At a publicly traded company, the goal
(16:33):
is to return profits to shareholders. The goal of the cooperatives,
by contrast, is to be profitable in order to create
and maintain good jobs. Another big difference is how the
cooperatives share their profits. Bolton, the other worker owners decide
that we gather at an annual general assembly, and that's
(16:56):
where a lot of the important issues are presented and
are voted on by all of the members. Ahead of
the annual meeting, the leadership team comes up with a
proposal to raise, lower, or maintain salaries. They also come
up with a plan for profit sharing. Then the leadership
team briefs workers, hashing out any disagreements at meetings and
around the water cooler. Finally, they all vote. Advocates of
(17:19):
worker cooperatives often emphasize the importance of one worker, one vote.
That means each member's vote has the same weight. Balta
says the phrase gives people an idealized impression of what
actually happens at the annual meetings. It's ultimately the manager
who's in charge. I mean, it's very nice to say
from the outside that we are represented. I feel qualified
(17:43):
to make decisions at my own job, but not at
the company level. While Balta doesn't want to be responsible
for setting company strategy, he does value having a say
and how the company has run, and if workers aren't
happy with the leadership team, they can vote them out.
I am part of that company. I make decisions. I
vote yes or I vote know. The annual meetings aren't
(18:06):
without conflict. Some tensions always emerge when hundreds of people
are deciding what to pay themselves. As people are on
under going like to say, this is not paradise and
we're not angels. Last year, Balta and some colleagues voted
against a proposal to increase executive pay. While salary differences
in Undergoing are minimal by global standards, Balta worries the
(18:28):
increases are a slippery slope to greater inequality. Okay, okay,
I think the differences are getting bigger, and that's what
bothers me. I understand that a qualified person has to
be paid, but maybe a different system has to be found.
(18:48):
In the end, the salary increase went through. Balta is
still frustrated about that. But that's democracy, he says. Your
candidate doesn't always win. I think for a minute about
(19:11):
an average US company, Then think about a majority of
employees at that company voting to cut their salaries during
a crisis. It seems like a long shot, right. Some
employees would probably say, well, I performed well where my
division is thriving, so why should I take a hit.
That's different from how workers at Undergone and other worker
(19:31):
cooperatives think about salary cuts. They're also the owners, so
a salary cut helps to ensure the survival of their company.
It's about shared ownership. Mike Paul Mary, the Kent State
co op expert we spoke too earlier, explains there's this
democratic component that makes worker cooperatives so much different than
just owning a share in a company. Every person gets
(19:55):
one vote regardless of how long they've been there, so
it's detached from capital and at the same level, the
way that the profits are distributed at the end of
the year are based on hours worked, and so it's
very equitable. It might seem a little surprising, but if
people have a steak in the business doing well, they're
going to care more. If you work at a company
(20:16):
where the company does great and it does absolutely nothing
for your life, who cares? Whereas where you have a
real steak where you will really benefit, people tend to
call out sick a lot less that employee on companies.
People tend to have a much different relationship with management
and employee on companies. They're more likely to say something,
and they're more likely to look at their coworker and say, hey,
(20:37):
you're kind of slack and you know can let's let's
do something here. And the co ops that are part
of the Monergo network are just a fraction of the
thousands of co ops located all across the Basque region.
Explain worker co ops have flourished in this part of
the world in part because shared ownership is an important
part of the culture that's different than in the US
(21:00):
co ops since he told us they have to hold
classes on how to build a culture of solidarity. But
in the Basque region, the benefits and responsibilities of owning
something with a group of people are almost second nature. Too.
Many people around here uphold these values even when they're
having fun. One evening, I joined under the co op
(21:26):
executive for dinner. We walked through the town of Mondragone.
It's narrow streets are lined with old stone buildings. We're
going to go to a club Basque traditional calinary club chocomica.
They are a place to be with your friends, colleagues, family,
and today. For example, in the town of Manga One,
(21:49):
we are twenty two south Habitans. We have twenty two clubs.
Culinary clubs are essentially a private restaurant that's collectively owned
and run by a group of acquaintances. The club votes
to elect new members and everyone pays a membership fee.
We walk down some stairs and come into a big
room that looks like a restaurant with long wooden tables.
Some of Ander's friends await us, including cape O Leton,
(22:11):
a journalist, and a fantastic chef. He's prepared a dish
traditional and nearby son Sebastian Hake, white asparagus, hard boiled eggs,
and clams in a white wine sauce. He also sizzles
up some rearby stakes and we have some red wine.
(22:32):
At culinary clubs, you can find a CEO of a
company and an assembly line worker at the same table.
All members pay the same fee and have equal access
to a professional kitchen and spacious dining room. That's a
major perk in this food obsessed region. Around here, people
(22:56):
tend to live in apartments where kitchens aren't particularly big. Also,
there aren't a lot of restaurants in many of the
small towns. Many of the culinary club members and the
workers at Mondragon were born and raised nearby. This culture
have shared ownership is in their blood. That culture, though,
can sometimes feel exclusionary to outsiders. But what would I
(23:21):
like most of all, I'd like to see more people
who are representative of the whole society and the cooperatives.
That's Diego Montoya he's originally from Columbia. Diego says he
would like to see more Colombians, Ecuadorians, Senegalese and others
who weren't born in the area but who were part
of Basque society joined the cooperatives. About twenty years ago,
(23:44):
Diego left his native Columbia guerrilla groups such as the FARC.
We're fighting the government. When Diego and his sister arrived
in the Basque region, they had to sleep on the streets. Eventually,
Diego found work as a waiter than in construction, but
he wanted a job at of the cooperatives, so he
decided to get his engineering degree. After a decade in Mondragone,
(24:05):
when he was nearly forty, he finally became a member.
I've reached a place of fability, which gives me peace
of mind. And also I'm not worried that at my
age they're gonna fire me. They're not gonna fire me.
Diego wants more people like himself to be able to
(24:26):
experience the benefits of Mondragon's cooperatives. He says that one
hurdle is that some of the co ops strongly encouraged
members to speak the Basque language well. He appreciates that
the language is an important part of Basque identity. He
doesn't want it to be a barrier to entry. Diego's wife,
Maria Protegi, has co ops in her blood. She grew
(24:47):
up in the town of Mondragon and her father was
an important figure in the early cooperative movement. I'm speaking
to both of them at a small weekend home that
Maria's family owns. It's a short drive from Mondragon. We're
sitting outside and have a great view of the Basque
mountains in the distance, miles and miles of green. They
would get together, all of them to help one of
(25:08):
the farms, you know. Like also, land means neighborhood work.
Maria's head of customer service at Orbea, am undergone co
op that makes bicycles. It's a well known brand in
Spain and among cyclists globally. When the pandemic struck many
of Orbea's clients, bicycle shops around the world shut down.
Maria says Orbea decided to act to avoid pushing its
(25:31):
clients into bankruptcy. When restrictions started to lift, demand for
bicycles surged, Orbea has had a great couple of years.
I asked Maria if she and her colleagues voted to
boost their salaries as a result. No, we are quite
conservative and we are very aware of the cycles. ORBEA
was founded in eighteen forty, so I guess they passed
(25:52):
a lot of bad things out of good things. And
so whenever it's going very well, we always get like, okay,
just in case, we get these my any justin cage,
you know, well the justin caage boxes full because we
know that, you know, but things come, Maria says. The
stability of the cooperative is the stability of hundreds of
people's livelihoods who are playing with many people's money. That's
(26:15):
something that it makes you think twice. In general, Europe
was a relatively stable place for many workers. During the pandemic,
Spain and other countries rolled out national furlow programs. They
subsidized the salaries of tens of millions of employees who
couldn't work. The difference is that the scale of these
programs was new. There were major growing pains. Some workers
(26:37):
didn't get their furlow payments for months. For example, at Mondragon,
there were no growing pains during the pandemic. Their crisis
playbook is tried and tested back in Balta's kitchen, he
tells me I was co op has been doing. In
(26:58):
May of this year, Balton, the members of his cooperative
gathered for their annual meeting. Demand for washing machines has
been picking up. FuG Or reported a profit workers increase
their salaries by about five and they voted to distribute
some of those profits to members. Each member got the
equivalent of thousands of dollars deposited in a savings fund. Yes, here,
(27:23):
my experience has been very positive. The worst that could
happen to me happened. I lost my job when I
was forty eight, fifty years old. Now I'm fifty nine
years old and I'm still working, and I've held on
to everything I've fought for. I've held onto it. Not
(27:48):
everywhere can be like Mandergone, but it's become a kind
of north star for places like co ops Sency. That's
what Kristen Barker, one of the other founders of the
co Op Network, told me. On issues like inequality, I
think there's just a tendency to throw up our hands
and feel like we can't really do anything on here.
(28:09):
But you look at Mandragon, a living, breathing, proven model
of extraordinary progress. This is possible, and this is what
we want to be about. Creating the pandemic has led
to unimaginable devastation and trauma, but it has also shown
(28:30):
that there are proven models that create greater equality. Whether
it's the co ops of Mondragone, or giving people cash
like in the US, or the power of community based
programs like in Kenya. There are things that work. It's
now up to us to decide if we'll learn any
of those lessons. This is our last episode of this
(28:55):
season of The Paycheck. Last week's episode said that Singapore
has no manufacturing sector. We have corrected the error, as
the category now accounts for of its GDP. Thank you
so much for listening. If you like our show, please
head on over to Apple Podcasts or wherever you listen
to podcasts to rate and review. This episode was hosted
(29:16):
by Me Rebecca Greenfield and reported by Jeanette Newman and Me.
It was edited by Daniel Balby and Me with help
from Francesca Levy, Janet Paskin, and rock Sheeta Soluja. We
also had editing help from Shelly Banjo, Kristin b Brown,
Gilda to Carly, Nicole Flato, Elissa McDonald, and Kay Schultz.
This episode was produced by Gilda to Carly and sound
(29:39):
engineered by Matt Kin. Original music is by Leo Sidrin.
The voice actors you heard were Alex Mario and Juan
Carlos Ernandez. Special thanks to Magnus Henrickson, Mckinninda Kuiper, Margaret Sutherland,
and Stacy Wong. Francesca Levy is Bloomberg's head of podcasts.
(30:00):
What do
About six months into the pandemic, an Ohio based cooperative
network received an influx of requests from small businesses that
wanted to turn themselves into worker owned co ops. For
a lot of folks, they have been unhappy with how
their current jobs, the current economy has been working for them,
and the idea of being part of something truly holding
(00:26):
workers as a most important piece is really really attractive.
That's Ellen Vira. She's the director of coop Organizing at
co op Sincy, a network of around dozen cooperative businesses
in Cincinnati, Ohio, where workers manage, own, and ultimately share
in the profits of their labor co ops. Since has
(00:46):
been around for about a decade, but in that fall
of alone it got applications to help another dozen businesses
go coop. One of the businesses that reached out was
the Shine Nurture Center, a Monostori style day air next
to the lush mount Airy Forest in Cincinnati. As the
pandemic dragged on, its founder and owner wanted to move on.
(01:07):
Like many people, she was reevaluating her life and decided
to go back to school, but she didn't want to
shut down the center she'd built and run for the
last six years, so she decided to sell it to
the teachers who worked there. My name is Beth Heya.
I work here at Shin Nurture Center Cooperative and I'm
currently the office manager and we are a nature based center,
(01:29):
so we're mostly outside in Mount Airy. We're very lucky
we have a path right out of our parking lots
and we get to go back there a lot with
the kiddos. Beth is one of four teachers who went
from working in the center to owning it. Before, she
says she was at the whims of administrators and parents
and at times found herself in less than ideal working conditions.
(01:50):
Now she's a business owner. She and the other teacher
owners have a say in how things get run. That
includes increasing pay and benefits and making sure class rooms
aren't understaffed, and at the end of the year, she
and the other owners will share in its profits too.
There's not a lot of like groping about, like why
we're doing something, because we all understand why we got
(02:12):
to those steps. You can see why co ops would
be attractive during a pandemic that created enormous economic uncertainty.
It gives people some power over their work lives, if
they can work from home or take sick days, or
when they clock in, and what they get paid. Looking
at the childcare crisis, being an educator, there's just a
(02:32):
lot of pressure put on childcare and there's not a
lot of voice given to the folks who are in
charge of it. So I think for post pandemic I
think this might be a really good solution for teachers
at centers who feel like they want to have a voice. Yet,
cops are still relatively rare in the US. Just around
(02:54):
a hundred people work at the companies and coops and
see for example. But there is somewhere worker co ops
abound and it's a place of notable equality. Mandragone is
a group of around a hundred cooperatives in the Basque
region of Spain that's been around for half a century.
It covers nearly eighty thousand workers across all sorts of industries.
(03:17):
Nobody there is wildly rich, but there isn't much poverty either.
It's the kind of place that often gets dismissed as
a special place doing a special thing that can't be
replicated elsewhere. But now more and more people are thinking
maybe they can be the next mandragone jobless claims coming in,
(03:41):
I mean really jumping from the week before, pretty brutal,
three point to a million record six point six million
Americans filed for unemployment last week and then working for
the worst infected by the pandemic. Prices of public housing
resail flats have hit an old time high in the
first well. Now to the billionaire boom. According to Bloomberg,
(04:04):
super riocht charters are up over three and a billionaire
was created every twenty six I was during this pandemic.
Is time for a wealth tax in America? Welcome back
to the paycheck. I'm Rebecca Greenfield. For the last seven weeks,
(04:28):
we've gone around the world to see how the pandemic
made things more or less equal. The answer depended on
all sorts of variables, a country's pre existing economic conditions,
how it managed the virus itself, and what financial decisions
were made facing a global economic crisis. In some places,
(04:50):
there were some pleasant surprises, like in the US, where
the poorest got some stability and economic security for the
first time in decades. In others, like India, economic desperation
lad people to make life altering choices that derailed their futures.
The question as we head into the next phase of
(05:10):
the pandemic is how lasting will any of these trends be.
That's what led us to work our own co ops.
Interest in worker own co ops tends to spike during
times of crisis. At a very basic level, worker co
ops they tend to emerge where there's a market failure.
That's Mike Paul Mary, an associate researcher at the Ohio
(05:32):
Employee Ownership Center at Kent State University. He says that
people who feel left out of the economy seek out
alternatives to traditional business models. After the two thousand eight recession,
for example, he says, the number of co ops in
the US has more than doubled. To him, they are
key to closing wealth gaps. A lot of our beIN
(05:52):
a quality today is driven by inequality and wealth and assets.
What employee ownership allows you to do and not just
provide a higher wage via income, but it gives individuals
who otherwise wouldn't have wealth and assets wealth and assets,
providing them that cushion and closing that gap as well.
And some employe ownership kind of attacks I would say
(06:13):
economic inequality at its fruit. While the pandemic isn't over yet.
Mike says there's been a notable uptick and interest in
the co op model. People see it as a gateway
to greater equality and security when the next pandemic or
whatever crisis comes around. But how realistic is that and
how did it work? My colleague Jeanette Newman went to
(06:36):
the Basque region in Spain to visit them Undergone co ops,
the mecca of worker cooperatives, to see how they fared
during the pandemic and what lessons can be learned about
creating a more equal world. Here she is with the story.
(07:04):
I'm standing on an assembly line watching some workers build
washing machines. The company is called fog Or Industrial. It's
one of the hundred or so cooperatives that are part
of the Moundergo network. One of the workers on the
assembly line is Baltasar Garcia Leone. Balta, as he's called,
is fifty nine years old. He has a clean shaven
head and an athletic build thanks to frequent outings with
(07:26):
his cycling buddies. He's been building washing machines at Mundergone
cooperatives for more than three decades. He's telling me how
the assembly line works. Balt and his colleagues on the
line build twenty two washing machines every day. They're sold
to hotels and restaurants. When the pandemic hit, Balta's assembly line,
(07:49):
like many around the world, down shifted. Every Friday, they
sent us home, so we missed out on a lot
of ours. Bolt and his colleagues also worked fewer hours
on the days they went into the factory. Those were scary,
uncertain times. Balta was worried about the virus like everyone else,
but he was less worried than many people about his
(08:11):
paycheck and his savings. Thousands of workers at Mondragon felt
the same in those chaotic first months. As COVID nineteen
up ended everything around the world, Mundergone was, by comparison,
an oasis of calm for workers. The reason moundergone has
a playbook to protect jobs that it's been honing for
more than half a century. Mundragon's first cooperative was founded
(08:32):
in the nineteen fifties by a priest and some of
his acolytes. Since then, crisis after crisis, the cooperatives have
found a way to keep unemployment and inequality in check.
The pandemic was no exception your Bilk. When I go
to other areas, I noticed much greater social differences. Here
(08:55):
the manager can be my neighbor. Elsewhere, I guess they
live in gay good communities. Joblessness here is much lower
than in the rest of Spain, and the level of
income inequality is on par with countries such as Finland
and Norway. The differences that the Nordic countries have relatively
high taxes they redistribute wealth. In the undergone region, taxes
(09:16):
are lower than in the Nordics. The cooperatives create wealth
for a lot of people. One way they do that
is by digging up their annual profits among workers. Assembly
Line workers like Balta, for example, have retirement savings that
are in line with top managers. The objective of the
cooperative is not to produce rich people, is to produce
(09:36):
rich societies. At the end of the day, even if
you are not rich, if you belong to a rich society,
you will be happy that he works at Moundergon Assembly.
It makes solar panels as well as machinery to help
firms automate their production. Most of the cooperatives in the
network are industrial. One of them is even making rocket
parts for Blue Origin. That's the aerospace company owned by
(09:59):
Jeff Bezos. As a rule, managers across the Moundergone network
can only earn six times more than the lowest paid worker.
At some places, like yours cooperative, the gap is even
smaller three to onegre and many of his colleagues or engineers,
they do similar work, he says, so they are in
similar pay or associeties. Here very realitarian. We don't have
(10:20):
a lot of rich people are not very rich. But
in the other hand, we also don't have poor people.
The CEO or the engineer or the man who makes
the photocopies. We all belong to the same social group.
But how do those egalitarian ideals hold up when times
get tough? How did the cooperatives and their worker owners
(10:42):
survive the worst economic crisis in a century? I speak
to under Chevita. He's an executive at headquarters called Moundergone Corporation.
The corporation overseas the one hundred or so cooperatives that
form part of the Moundergone network. When a crisis hits,
all the co ops rely on a safety managed by headquarters. Understays.
(11:02):
The goal is to preserve jobs and That means the
safety net has to be flexible. For that we have
different mechanisms. If there is no work for me in
my corporative, I have the right to work in another
corporative of the corporation. If there is no work for
me in the corporation, I have the right to be
trained to be more employable. And if still there is
no work for me the corporation, I have the right
(11:24):
to get an unemployment benefit for maximum two years. This
is great. That does sound great, and under makes it
seem so easy, But the cooperative model doesn't always work perfectly.
About a decade ago, the co op where Balta was
working went bankrupt. It was in the aftermath of the
global recession. That was a wake up call for Balta
(11:44):
and many others. Failure is possible. So even when things
appear to be running smoothly at Montrigone during the pandemic,
in the backup workers minds, the threat of failure loomed.
(12:07):
I visit Bolts at his apartment to learn more about
how he survived that bankruptcy and the pandemic. He lives
just outside the town of Mondragon. The area is surrounded
by forested mountain tops which gave way to pastures and farmland.
Further down in the narrow mountain valleys sit box the
industrial warehouses where the cooperatives manufacture their products. I ring
(12:28):
Bolt's doorbell. All right, we sit down at his kitchen table.
He proudly points to a white washing machine from his
cooperative tucked underneath the countertop. Balta joined his first co
op in n He worked there for more than two decades.
In two thousand thirteen, it went bankrupt after struggling through
(12:51):
Spain's double dip recession bolting. Around nine workers lost their jobs.
It was the biggest crisis the cooperatives had ever faced.
Enjoy of course, I was scared. I had done an
interview or two at that time, But I mean I
was forty eight years old. I was already pretty old.
(13:12):
I thought it was going to be difficult. But Mondragon
eventually found new jobs at other cooperatives for most of
the workers, including Balta. He got a position at Fogor Industrial,
where he is now. Other workers went into early retirement. Still,
the bankruptcy meant that Balta and other members lost the
money they had been stashing away for years in their
retirement savings. Accounts. That was a lesson for everyone at Mondragone.
(13:36):
When a crisis hits, workers after react quickly to show
up the finances of their cooperatives and prevent things from
getting worse. During the pandemic, Bolton his colleagues tried to
put that lesson into practice. In the U S and
other countries. Unemployment spiked in the early days of the pandemic,
Business slowed down or came to a halt, and executives
had to cut costs, so they laid off workers. Balton
(13:59):
other operative members or workers and owners. So it wasn't
an option for them to fire themselves, but they still
had to find a way to cut costs, otherwise they
could end up saving themselves. But tanking the cooperative seen
our interest in every respect that the cooperative does well,
our livelihood depends on so making money that has to
(14:23):
be the baseline, because a company can have a really
nice financial targets, but if it doesn't earn any money
in the end, it's gone. It would be destroyed. This
is where Mundergones Crisis playbook kicks in. The leadership team,
which is made up of assembly line workers like Balta
and members who have more executive experience meant to make
a plan. First, they decided to lay off a few
(14:46):
dozen workers who aren't members of the cooperative. Only around
one third of workers at Undergone are also members. Some
people don't qualify. New members have to be voted in
by existing members. If someone as a reputation as being
a bit irresponsible or isn't considered a team player, they
might not be accepted. Others don't want to pay the
(15:07):
roughly sixteen thousand dollars it costs to become a member.
That's a kind of down payment to join the cooperative.
It goes into a savings fund for the worker. Next.
Balta's co op trim salaries on days they didn't work,
which ended up being more than anticipated they would get
of their salaries. We missed a lot of ours. We
couldn't recover a lot of those hours. How did the
(15:29):
co op afford to pay Balta and his colleagues for
all those days they didn't work after all revenue had fallen.
Wondergoing Headquarters stepped in and tapped a kind of insurance program.
It has co ops that were doing well, such as
those producing medical gear and bicycles, transferred funds to co
ops like Balta's, where workers had missed a lot of
days under the monder going executive we spoke too earlier
(15:53):
explains that mechanism we are bright for nine thousand workers
in the enemic year and it had a cost of
thirteen point to million euros. So when we are talking
about solidarity, it is also about money. Honors comments should
(16:13):
dispel any images you might have in your mind of
the cooperatives as a kind of utopian commune in the
Spanish countryside. On another's at mundergo and talk about money
and profits with the same ease as any capitalist. The
co ops are first and foremost a business. They need
to be profitable. At a publicly traded company, the goal
(16:33):
is to return profits to shareholders. The goal of the cooperatives,
by contrast, is to be profitable in order to create
and maintain good jobs. Another big difference is how the
cooperatives share their profits. Bolton, the other worker owners decide
that we gather at an annual general assembly, and that's
(16:56):
where a lot of the important issues are presented and
are voted on by all of the members. Ahead of
the annual meeting, the leadership team comes up with a
proposal to raise, lower, or maintain salaries. They also come
up with a plan for profit sharing. Then the leadership
team briefs workers, hashing out any disagreements at meetings and
around the water cooler. Finally, they all vote. Advocates of
(17:19):
worker cooperatives often emphasize the importance of one worker, one vote.
That means each member's vote has the same weight. Balta
says the phrase gives people an idealized impression of what
actually happens at the annual meetings. It's ultimately the manager
who's in charge. I mean, it's very nice to say
from the outside that we are represented. I feel qualified
(17:43):
to make decisions at my own job, but not at
the company level. While Balta doesn't want to be responsible
for setting company strategy, he does value having a say
and how the company has run, and if workers aren't
happy with the leadership team, they can vote them out.
I am part of that company. I make decisions. I
vote yes or I vote know. The annual meetings aren't
(18:06):
without conflict. Some tensions always emerge when hundreds of people
are deciding what to pay themselves. As people are on
under going like to say, this is not paradise and
we're not angels. Last year, Balta and some colleagues voted
against a proposal to increase executive pay. While salary differences
in Undergoing are minimal by global standards, Balta worries the
(18:28):
increases are a slippery slope to greater inequality. Okay, okay,
I think the differences are getting bigger, and that's what
bothers me. I understand that a qualified person has to
be paid, but maybe a different system has to be found.
(18:48):
In the end, the salary increase went through. Balta is
still frustrated about that. But that's democracy, he says. Your
candidate doesn't always win. I think for a minute about
(19:11):
an average US company, Then think about a majority of
employees at that company voting to cut their salaries during
a crisis. It seems like a long shot, right. Some
employees would probably say, well, I performed well where my
division is thriving, so why should I take a hit.
That's different from how workers at Undergone and other worker
(19:31):
cooperatives think about salary cuts. They're also the owners, so
a salary cut helps to ensure the survival of their company.
It's about shared ownership. Mike Paul Mary, the Kent State
co op expert we spoke too earlier, explains there's this
democratic component that makes worker cooperatives so much different than
just owning a share in a company. Every person gets
(19:55):
one vote regardless of how long they've been there, so
it's detached from capital and at the same level, the
way that the profits are distributed at the end of
the year are based on hours worked, and so it's
very equitable. It might seem a little surprising, but if
people have a steak in the business doing well, they're
going to care more. If you work at a company
(20:16):
where the company does great and it does absolutely nothing
for your life, who cares? Whereas where you have a
real steak where you will really benefit, people tend to
call out sick a lot less that employee on companies.
People tend to have a much different relationship with management
and employee on companies. They're more likely to say something,
and they're more likely to look at their coworker and say, hey,
(20:37):
you're kind of slack and you know can let's let's
do something here. And the co ops that are part
of the Monergo network are just a fraction of the
thousands of co ops located all across the Basque region.
Explain worker co ops have flourished in this part of
the world in part because shared ownership is an important
part of the culture that's different than in the US
(21:00):
co ops since he told us they have to hold
classes on how to build a culture of solidarity. But
in the Basque region, the benefits and responsibilities of owning
something with a group of people are almost second nature. Too.
Many people around here uphold these values even when they're
having fun. One evening, I joined under the co op
(21:26):
executive for dinner. We walked through the town of Mondragone.
It's narrow streets are lined with old stone buildings. We're
going to go to a club Basque traditional calinary club chocomica.
They are a place to be with your friends, colleagues, family,
and today. For example, in the town of Manga One,
(21:49):
we are twenty two south Habitans. We have twenty two clubs.
Culinary clubs are essentially a private restaurant that's collectively owned
and run by a group of acquaintances. The club votes
to elect new members and everyone pays a membership fee.
We walk down some stairs and come into a big
room that looks like a restaurant with long wooden tables.
Some of Ander's friends await us, including cape O Leton,
(22:11):
a journalist, and a fantastic chef. He's prepared a dish
traditional and nearby son Sebastian Hake, white asparagus, hard boiled eggs,
and clams in a white wine sauce. He also sizzles
up some rearby stakes and we have some red wine.
(22:32):
At culinary clubs, you can find a CEO of a
company and an assembly line worker at the same table.
All members pay the same fee and have equal access
to a professional kitchen and spacious dining room. That's a
major perk in this food obsessed region. Around here, people
(22:56):
tend to live in apartments where kitchens aren't particularly big. Also,
there aren't a lot of restaurants in many of the
small towns. Many of the culinary club members and the
workers at Mondragon were born and raised nearby. This culture
have shared ownership is in their blood. That culture, though,
can sometimes feel exclusionary to outsiders. But what would I
(23:21):
like most of all, I'd like to see more people
who are representative of the whole society and the cooperatives.
That's Diego Montoya he's originally from Columbia. Diego says he
would like to see more Colombians, Ecuadorians, Senegalese and others
who weren't born in the area but who were part
of Basque society joined the cooperatives. About twenty years ago,
(23:44):
Diego left his native Columbia guerrilla groups such as the FARC.
We're fighting the government. When Diego and his sister arrived
in the Basque region, they had to sleep on the streets. Eventually,
Diego found work as a waiter than in construction, but
he wanted a job at of the cooperatives, so he
decided to get his engineering degree. After a decade in Mondragone,
(24:05):
when he was nearly forty, he finally became a member.
I've reached a place of fability, which gives me peace
of mind. And also I'm not worried that at my
age they're gonna fire me. They're not gonna fire me.
Diego wants more people like himself to be able to
(24:26):
experience the benefits of Mondragon's cooperatives. He says that one
hurdle is that some of the co ops strongly encouraged
members to speak the Basque language well. He appreciates that
the language is an important part of Basque identity. He
doesn't want it to be a barrier to entry. Diego's wife,
Maria Protegi, has co ops in her blood. She grew
(24:47):
up in the town of Mondragon and her father was
an important figure in the early cooperative movement. I'm speaking
to both of them at a small weekend home that
Maria's family owns. It's a short drive from Mondragon. We're
sitting outside and have a great view of the Basque
mountains in the distance, miles and miles of green. They
would get together, all of them to help one of
(25:08):
the farms, you know. Like also, land means neighborhood work.
Maria's head of customer service at Orbea, am undergone co
op that makes bicycles. It's a well known brand in
Spain and among cyclists globally. When the pandemic struck many
of Orbea's clients, bicycle shops around the world shut down.
Maria says Orbea decided to act to avoid pushing its
(25:31):
clients into bankruptcy. When restrictions started to lift, demand for
bicycles surged, Orbea has had a great couple of years.
I asked Maria if she and her colleagues voted to
boost their salaries as a result. No, we are quite
conservative and we are very aware of the cycles. ORBEA
was founded in eighteen forty, so I guess they passed
(25:52):
a lot of bad things out of good things. And
so whenever it's going very well, we always get like, okay,
just in case, we get these my any justin cage,
you know, well the justin caage boxes full because we
know that, you know, but things come, Maria says. The
stability of the cooperative is the stability of hundreds of
people's livelihoods who are playing with many people's money. That's
(26:15):
something that it makes you think twice. In general, Europe
was a relatively stable place for many workers. During the pandemic,
Spain and other countries rolled out national furlow programs. They
subsidized the salaries of tens of millions of employees who
couldn't work. The difference is that the scale of these
programs was new. There were major growing pains. Some workers
(26:37):
didn't get their furlow payments for months. For example, at Mondragon,
there were no growing pains during the pandemic. Their crisis
playbook is tried and tested back in Balta's kitchen, he
tells me I was co op has been doing. In
(26:58):
May of this year, Balton, the members of his cooperative
gathered for their annual meeting. Demand for washing machines has
been picking up. FuG Or reported a profit workers increase
their salaries by about five and they voted to distribute
some of those profits to members. Each member got the
equivalent of thousands of dollars deposited in a savings fund. Yes, here,
(27:23):
my experience has been very positive. The worst that could
happen to me happened. I lost my job when I
was forty eight, fifty years old. Now I'm fifty nine
years old and I'm still working, and I've held on
to everything I've fought for. I've held onto it. Not
(27:48):
everywhere can be like Mandergone, but it's become a kind
of north star for places like co ops Sency. That's
what Kristen Barker, one of the other founders of the
co Op Network, told me. On issues like inequality, I
think there's just a tendency to throw up our hands
and feel like we can't really do anything on here.
(28:09):
But you look at Mandragon, a living, breathing, proven model
of extraordinary progress. This is possible, and this is what
we want to be about. Creating the pandemic has led
to unimaginable devastation and trauma, but it has also shown
(28:30):
that there are proven models that create greater equality. Whether
it's the co ops of Mondragone, or giving people cash
like in the US, or the power of community based
programs like in Kenya. There are things that work. It's
now up to us to decide if we'll learn any
of those lessons. This is our last episode of this
(28:55):
season of The Paycheck. Last week's episode said that Singapore
has no manufacturing sector. We have corrected the error, as
the category now accounts for of its GDP. Thank you
so much for listening. If you like our show, please
head on over to Apple Podcasts or wherever you listen
to podcasts to rate and review. This episode was hosted
(29:16):
by Me Rebecca Greenfield and reported by Jeanette Newman and Me.
It was edited by Daniel Balby and Me with help
from Francesca Levy, Janet Paskin, and rock Sheeta Soluja. We
also had editing help from Shelly Banjo, Kristin b Brown,
Gilda to Carly, Nicole Flato, Elissa McDonald, and Kay Schultz.
This episode was produced by Gilda to Carly and sound
(29:39):
engineered by Matt Kin. Original music is by Leo Sidrin.
The voice actors you heard were Alex Mario and Juan
Carlos Ernandez. Special thanks to Magnus Henrickson, Mckinninda Kuiper, Margaret Sutherland,
and Stacy Wong. Francesca Levy is Bloomberg's head of podcasts.
(30:00):
What do
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