The Turin Factory Council movement which emerged at the height of the Bienno Rosso, the two red years which threatened to overthrow Italian capitalism, represents one of the high points of working class struggle in the history of the world labor movement. The events played a formative role in the thought of Antonio Gramsci and the political practice of what was to become the Communist Party of Italy. The occupation and its aftermath also drew out the contradictions of the Italian Socialist Party which, despite formal adherence to the line of the Comintern, remained a bastion of mostly verbal radicalism and practical reformism and which, at the crucial moments of the post-war radicalization, stood back and retreated from any serious confrontation with the state or capital. The far reaching radicalism and immense revolutionary potential of the movement succeeded in striking fear into the hears of the ruling class, yet the failure of the PSI to provide effective revolutionary leadership and carry the movement to a revolutionary climax on a national scale led to a radical shift in the balance of class forces to the side of now terrified ruling elites which saw its salvation in fascism.

The Italy which emerged out of World War 1 was one where a strengthened and aggressive industrial capitalist class faced a worker’s movement which had grown significantly in numbers and social power. This growth in industrial capital was concentrated in Milan, Genoa, and above all in Turin, and is captured well by statistics showing that “The Fiat company’s capital leapt from 17 million lire in 1914 to 200 million lire in 1919, that of steel and engineering concern Ansaldo from 30 to 500 million, and engineering firm Ilva from 30 million in 1916 to 300 million two years later.”1

The corresponding growth in the proletariat was also immense, “the workforce of Milan increased fivefold between 1915 and the end of 1916; Fiat’s workforce grew from 4,300 in 1914 to over 40,000 in 1918. There were over 900,000 workers in war industries by the end of the war .”2 Production was so vital to the Italian war effort that many workers were excused from military service, a fact which was also skillfully deployed by the ruling elites to pit peasants against the ‘privileged’ ‘shirkers’ in the city.Yet despite wages which stood at nominally high levels and exemption from military service, the conditions of most industrial workers remained wretched. As Gwyn Williams describes, “One estimate records a rise in the cost-of-living index from 132.7 in 1915 to 409.1 in 1918, while the index for daily earnings rose from 3.54 lire to 6.04 lire in the same period.”3 At the same time profit rates soared for the industrial bourgeoisie, with an average rate of profit around 16% and with rates as high as 20% and even 40% being common.4

This drastic inequality made the transformation of the seething class antagonism and hatred into open conflict and insurrection inevitable despite the militarization of labor, a conflict which finally came to the front in Turin in August of 1917. This conflict, both in the deeply radical actions of the workers and in the spontaneous, vacillating character of the socialist leadership, was in many ways a dress rehearsal for the far broader and more important conflict which would erupt during the Bienno Rossa. News of the revolution in Russia was the spark for a new wave of radicalization, and a tour of Russian Mensheviks and Social Revolutionaries found itself to its own dismay greeted everywhere by thronging masses who shouted “Viva Lenin!”5

Shortly after the delegations visit to Turin, the city exploded in a spontaneous burst of working class radicalism. Sparked by a breakdown in bread supplies on August 21st the factories burst into anti-war demonstrations. Clashes began with police and soldiers and “The working-class quarters were barricaded, barracks attacked for arms, two churches sacked.”6 However while the socialists rallied to the cause and praised the workers’ courage seeing it as a revolutionary breakthrough worth being associated with, they said to give up any further violence and to return to their jobs.

In addition to a lack of any national co-ordination of similar actions, the action was crushed above all by military force, against which despite fraternization and appeals the necessary breakdown in military discipline among the peasant soldiers proved difficult. “It proved easy to whip up their hatred against exempted industrial workers. Sardinian peasants in uniform had no hesitation in shooting down Turin workers in August 1917”7 The uprising ended in defeat, and although a radical wing of the socialists around Bordiga and Gramsci (Who was in the aftermath promoted to the leadership of the Turin section) began to further coalesce, much of the party tailed behind defense of the country in the aftermath of the defeat at Caporetto and failed to build a revolutionary base.

The movement that had been suppressed in August 1917 was to flare up again as the most radical and advanced part of the Bienno Rossa as Italy began the process of demobilization and demilitarization in 1919. The international political context, with the victorious Bolshevik revolution desperately holding on to power in Russia, with revolution in Hungary, with Germany having undergone its own democratic revolution and where a growing Communist Party threatened to make a socialist revolution, ensured that even in a good economic climate the coming years would be stormy.

The radicalizing potential of the war was there, “Italy mobilized 5.25 million men. At least 615,000 were killed, half a million disabled and a million wounded. Workers, peasants and soldiers greeted the end of the war with hope for the future and a sense that their sacrifices would be rewarded… the government promised soldiers land after the war, and restitution to workers for the sacrifices made during the conflict.”8 These hopes and expectations were to be shattered and were to contribute to the deep post-war radicalization of the Italian proletariat and peasantry.

The economic crisis brought about by demobilization was also of tremendous significance. “Exports had collapsed, imports had swollen, emigration had ceased, the transportation system was run down. There had been a serious fall in food production… The coal shortage was no less desperate…Masses of capital were locked up in installations now unprofitable and reconversion to peacetime rhythms proved very difficult.”9 Food riots and protests exploded in June and July, with ‘soviets’ formed in some areas and widespread rebellion. Had a serious Leninist party existed, the seizure of power may even have been on the agenda. However the PSI was not this party, and the movements remained to disparate and unconnected to prove a coordinated threat to the bourgeois order.10 The context of the two red years was however potentially revolutionary, and this potentially revolutionary environment must be kept in mind in examining the development and potential of the Turin Factory Councils.

It was in this context of radical working class struggle, that on May 1st 1919 the first issue of Ordine Nuovo appears, which however would not become the worker’s political organ it developed into until June 21st when it took up the question of internal factory commissions, which were to lay at the heart of the Turin movement.11 These internal factory commissions first emerged when in 1906 FIOM won a contract recognizing the 10 hour day and establishing an elected internal factory commission to handle greivances and discipline similar to shop stewards in Britain and Germany.12 They then became more predominant as elected regulating bodies during the war which helped regulate production with management and resolve industrial disputes from the side of the workers.13

Their significance as organs increased in 1918 when they began to emerge as a focal point for organizing both within and against the Union, which attempted to take over and render them subsidiary in the summer of 1918. Demands for the recognition of the commissions began to figure prominently right beside wage demands and were a focal point for working class militants who saw the union as collaborationist.14 In organizing and promoting these alternative organs of ‘dual power’ within the factory, the Turin far left “unleashed and rode a mighty surge of working-class revolt and aspiration which drew in anarchists, syndicalists, libertarians and the hitherto apathetic… it was L’Ordine Nuovo and Antonio Gramsci in particular who gave it form and public style.”15

This process began to take shape with an article by Andrea Viglongo, a strong supporter of Gramsci, who wrote an article in L’Ordine Nuovo criticizing Fiat-Centro workers who “turned the new internal commission into a strengthened base for FIOM”16 whereas the right to elect the factory commissioners should be universal for workers. Although this would produce contradictions, it was necessary if factory commissions were to evolve as organs of the proletariat. In his view “The answer was for the councils to develop in complete autonomy from the unions and to assume a position vis-a-vis unions parallel to that of soviets and unions in Russia. Unions, thus in practice diminished to subsidiary agents, should be integrated into the general movement led by the councils.”17

On August 31, 1919, the Brevetti-Fiat plant sets up a system whereby elected workshop commissars are voted for on the basis of every worker having the vote with only union members able to be elected, a compromise which puts the council first as an organ of struggle and which is hailed by L’Ordine Nuovo. At Brevetti-Fiat, “Elections for commissars were held in every work-unit; the elections took a week and out of 2,000 workers, only three or four abstained. And from this point on, the council movement began to burn through the industrial complex of Turin lke a fire-storm.”18 The power of the factory commissions to act as organs representing and mobilizing the whole working class of the factories as opposed to the smaller, less representative trade union, made the possibility of working class control over production, and ultimately a mobilization of the working class to seize power, a real possibility.

In the aftermath of the Brevetti-Fiat factory election the system pioneered by the workers there in which union members would be elected to the commissions by all the workers set off a rapid growth in the system, promoted by socialist activists around L’Ordino Nuovo and by many of the workers themselves, expanding from Fiat into the Chemical, Shoe-making and timber industries and even provoking significant debate at the national congress of the Milan chemical and rubber workers.19 This explosion of factory commissions culminated in a ‘quasi-general assembly’ of workshop commissars on October 31st, a day before the Turin section of the FIOM union was to meet.20 The Turin assembly of workshop commissars succeeded in taking over the local union, this was followed by the winning of the Turin section of the PSI, and then the winning of the local chamber of labor which in theory spoke for the whole regions working class and which called for the formation of factory committees and workers councils.21

However the movement failed to really reach outside of Turin, in Milan for example the major trade union, the CGL (General Conferderation of Labor), “backed by the PSI, held the line against the Turin infection. It was prepared to countenance, indeed create ‘commissars’; even, in the last resort, to tolerate some extension to non-union men, but union control had to be firmly maintained.”22 The factory council movement, in other words, faced the same challenge that all revolutionaries faced in the Italian socialist movement, the threat of practical reformism and vacillation concealed under superficial, verbal adherence to radical, communist politics. Gramsci and the Turin movement found itself opposed not only by the right wing of the PSI, but also by the extreme left led by Bordiga who maintained an extremely sectarian, purist vision of a tightly disciplined truly communist party which would seize power. In these circumstances attempts to win or renew the party failed, and neither through the party or through wider council organization was the Turin model spread to the rest of Italy, leaving it isolated and potentially vulnerable against a gathering industrialist led counter-revolution.

The first decisive conflict came in April, before the factory council movement could succeed in spreading nationally. “The industrialists had carefully prepared for the conflict. They seized an opportunity presented to them by clumsy and ill-considered action by some workers. They struck while Turin was still isolated.”23 The dispute emerged not over economic demands but over the question of power, of whether workers or the owners held sway within the factory. The immediate dispute was over a change to ‘Summer-Time’, a change which reminded workers of war-time forced labor. Workers responded at one Fiat plant by setting back the hands of the clock themselves and faced dismissal by the owners. The situation escalated until a general assembly of commissars called for sit-in strikes throughout the whole metal industry in response.

The industrialists hit back with everything, backed up by tens of thousands of troops who had been moved into Turin. The industrialists proclaimed a lockout and factories were occupied by soldiers, ringed with barbed wire and machine guns. In negotiations, “the employers presented a series of demands which amounted to a castration of the commissar system”24 and on the 13th of April, a general strike was called in Turin in defense of the factory council system, it spread to the whole provinces of Turin, Novara, Alessandria and Pavia. It brought out half a million workers and involved 4 million people. Yet at the critical moment, when it was necessary that the strike either expand to all of Italy or collapse in negotiations, the national council of the PSI rejected the call for a General strike and the Turin section was left hanging by itself. Though the strike mobilized unprecedented numbers of workers, it ended in defeat with a re-imposition of factory director and union control to the detriment of the new council system on April 24th.25This defeat however was only to set the stage for the far deeper and more significant crisis which was to emerge in September.

A mutiny of troops at Ancona who were being ordered to Albania, and a widespread campaign against arms production given the apparent danger of a declaration of war against the Soviet Union and the use of produced weapons against that revolution, set the stage for the unfolding of a widespread crisis which would draw in most of the Italian labor movement. Sparked by a dispute in Milan which escalated to a factory occupation after an employer lockout, the stage was set for a decisive conflict.

“As in April, the initiative lay with the employers. Strongly organized in Confindustria [A coalition of industrialists] and regional consortia… alarmed by the anti-plutocratic tone of the Giolitti government and its tentative gestures towards the socialist, the industrialists struck, struck hard and fought with grim tenacity. The massive working-class action was essentially a response.”26

The movement, in the aftermath of the defeat of the earlier Turin action and the subsequent discrediting of Gramsci’s wing within the party, was primarily led or pushed forward by syndicalists in the USI (Unione Sindacale Italiana) who had been growing rapidly.27 After a back and forth dispute with industrialist attempts to dismiss workers and union responses through go slow and work-to-rule strikes, “It was clear that the industrialists were determined to stage a lock-out. USI called for a preventative occupation…On 30 August… the Romeo management locked out its 2,000 workers.

The response of the Milan section of FIOM was automatic. Workers moved in to occupy over 300 factories in the Milan area.”28 The union section in Turin actually attempted to hold back the expansion of the occupations, but a general employer lockout forced their hand and brought half a million workers across Italy into a general factory occupation movement. “Between 1 and 4 September, the occupations rolled forward through Italy, not only in the industrial heartland around Milan, Turin and Genoa, but in Rome, Florence, Naples, Palermo, in a forest of red and black flags and a fanfare of workers’ bands.”29 The factory occupations not only put a halt to production at the behest of the industrialists but actually began to use the factories to produce themselves under their own economic order. Technical and engineering personal sometimes joined the movement, however as the days passed and the revolutionary implications became clearer more and more withdrew, with one of the exceptions being Turin with its past experience of factories under ‘communist order’. On September 6th it became clear that the movement reached beyond the factories, as peasants near Potenza marched on and seized nearby estates.30 It was without question the most widespread working class movement in Italian history, and one of the most significant in the history of the world working class, yet this tremendous movement would find itself without any leadership, any organized body capable of directing it towards a conquest of power beyond the factory walls.

Although the movement lasted for weeks, it’s fate was sealed with the PSI’s complete failure to take stock of and advance the revolutionary situation which they found themselves in. On the 10thof September the PSI leaders and CGL union leaders met and in a dramatic confrontation the CGL forsook takeing power and offered it to the PSI “You assume responsibility. We who do not feel able to shoulder this responsibility… we say we will withdraw. We submit our resignation…You take the leadership of the movement.”31 Yet the party which was offered leadership, offered power, was incapable of assuming any sort of leadership. A letter written by Lenin, Zinoviev and Bukharin accurately described the situation which the party was in.

“In Italy there are at hand all the most important conditions for a genuinely popular, great proletarian revolution… Every day brings news of disturbances. All eyewitnesses – including the Italian delegates – assert and reiterate that the situation in Italy is profoundly revolutionary. Nevertheless, in many cases, the party stands aside, without attempting to generalize the movement, to give it slogans… to turn it into a decisive offensive against the bourgeois state.”32

The Party executive chose to stand aside at the critical moment, out of fear being rendered incapable of accepting responsibility for directing the movement towards any revolutionary conquest of power. The Party executive chose as it always had to tail the masses; it stepped back, and the question of communist revolution was essentially put to a vote by the Milan branch of the CGL union, with one resolution calling in effect for Communist revolution and other for reformist economic negotiations. The convention “liquidated the political solution with the complicity of the party leadership itself, which wanted to lose”33 The results of the vote, with delegates representing about half a million for reform and 400,000 for the dictatorship of the proletariat did underscore a divide between the militant industrial working class and the broader labor movement, however this was a divide that was the product of the failure of the PSI to do anything to attempt to unite and seriously direct the immense spontaneous and organized bursts of working class and peasant resistance over the last two years.

The reformist ‘victory’, with pay to workers for production that happened under workers control and vague promises of an increase in workers control within the factories was illusory. A renewed economic crisis which drove up unemployment set the stage for violent counter-revolution. Industrialists who no longer saw the parliamentary government as capable of defending their interests poured money into the burgeoning fascist movement as the political force which would represent them. What was left of the Turin factory councils was destroyed by employer, state and fascist action in April 1921, only a few months after the supposed victory of the September occupations.34

In the first half 1921, “fascist squads, climbing through the year towards the 300,000 mark, mobile and well-equipped, destroyed 59 case del popolo, 119 camere, 107 co-operatives, 83 peasant leagues, 141 socialist centres; they killed over a hundred, wounded thousands and terrorized whole communities…Frequently, police and army followed up.”35 The violent revolution which so terrified and was forsaken by the official leaders of Italian Socialism came in the form of the brutal fascist counter-revolution. All the gradual gains and reforms came to nothing against the rifle butt of the state and the brutal regime of fascism. Although the history of the Turin factory councils was heroic and their potential was immense, the hostility to their revolutionary program of workers’ power by the official unions against which they were constructed and above all by the hostility of the vacillating PSI doomed them and the Italian working class to defeat. The movement succeeded in scaring the bourgeoisie sufficiently to chase them into the arms of fascism, without going far enough to take power for the new proletarian order being built out of the factories. The movement’s limits were described well by a letter from the Comintern’s executive,

“You cannot win by the seizure of factories and workshops alone…the scope of this movement must be extended, generalized, the question raised to a general political level, in other words the movement broadened into a general uprising with the object of overthrowing the bourgeoisie by the seizure of power by the working class… This is the only way to salvation; otherwise the disintegration and collapse of the mighty and magnificent movement that has begun is inevitable.”36

Yet there existed no political organ capable of extending and generalizing the Turin movement, into directing the massive discontent of the two red years into a serious revolutionary organization capable of contesting state power. The price which the left would pay for its failure to do this, to follow up revolutionary rhetoric with revolutionary action, was over 20 years of Fascist rule which would obliterate the left until World War 2 opened up a new epoch of revolutionary struggle.

“We do not aspire to economic development as an end, but as a means.”

–Don José María Arizmendiarrieta, spiritual founder of Mondragon

This Mondragon principle, in practice, operates more closely to the Identity Statement principle of Member Economic Participation. I included it in this side road of the over all series because I believe that Mondragon presents a nuance all too often lost in the co-operative movement and, in the 'silo-ed' environment of the US worker co-operative movement, we often tend to forget the role of capital in our organizations is significantly different from that of our industry and capitalist competitors.

The role of capital in a worker co-operative should be two-fold:

1) ensure the on-going operations of the co-operative

2) allow the co-operative to maintain the highest level of safety and quality of work-life.

Thus, this principle presents the balancing act of worker co-operatives. As the opening quote suggests, if we are just in it for the money, what are we really trying to accomplish? However, DJMA has also said, “Cooperativism without the structural capacity to attract and assimilate capital at the level of the requirements of industrial productivity is but a temporary solution, an invalid formula.”

The definition of this principle is as follows:

”The Mondragon Cooperative Experience considers capital to an instrument, subordinate to Labour, necessary for business development and worthy, therefore, of:

a) Remuneration, which is:

* Just, in relation to the efforts implied in accumulating capital, * Adequate, to enable necessary resources to be provided, * Limited in its amount, by means of corresponding controls, * Not directly linked to the profits made.

b) Availability subordinate to the continuity and development of the cooperative, without preventing the correct application of the principle of open admission.”

As a tool, the role of capital should not exclude members from participation in their co-operative. This is a key point for worker co-operatives. The level of capital investment by the member should be appropriate to the needs of the industry and the ability of the worker to contribute. Otherwise, the role of capital dwarfs the rights of the workers, the human beings.

Another important diversion for worker co-operatives is the separation of capital from profits. Too often I hear directors (who have come to us from the “for profit” world) talk about the need for “return on investment” or “return on equity” as the means for deciding the correct course of the co-operative. However, that places capital in a position of greater importance than it needs to be or should be. While a surplus (profit) is needed to re-capitalize the organization and to expand, that should be the limit of its effect. We should not seek to maximize ROI because that mindset leads to the disaster capitalism that has plagued our macro-economy for thirty years.

Capital, in a cooperative, exists to serve the needs of the members collectively. In a worker co-operative, Capital should mean ensuring good paying jobs, safe working conditions and the opportunity for human development. Co-operatives exists as a means for socio-economic transformation of the community, not for the further enrichment of the few who control capital. This may be one of the key differences of cooperation from its market based cousin capitalism. Capital, in a cooperative, should be used to elevate the human being, to eliminate (or minimize) exploitation, and create a sustainable community.

This may seem like an obvious concept, but it is not. Too often co-operative managers hear the siren song of the capitalists. When we start hearing managers talking about industry “best practices” we should immediately ask who those practices are best for. Are those practices “best” for the workers or the stockholders? Are they best for the consumers or the stockholders? Are they “best” for managers or the members? Are they “best” for the community or the stockholders? We need to see that our co-operatives must develop their own best practices for the industry. By creating best practices that do not get tied to maximizing ROI or ROE, we can create strong, vibrant workplaces that will, in turn, create sustainable, vibrant communities.

These are, I believe, the questions that Don Jose wants us to ask. We cannot simply pretend that we are at the grown-ups table when we manage our businesses. We cannot model the “industry” without focusing on the unique role of capital in our co-operatives. As the opening quote states, the role of capital is simply a means to a better future. It should never be considered an end unto itself.

The next principle from Mondragon is that of Participatory Management. This seems like a no-brainer for worker co-operatives. What is the point of going through all the work of setting up a worker co-op if the workers don’t actually have a say in how the place is run? They would be better off in a unionized Employee Stock Ownership Program.

I’ll get more into this in a second. First, I want to share the language of the principle from Mondragon (translated, as they all are, of course):

“The Mondragon Cooperative Experience believes that the democratic character of the Cooperative is not limited to membership aspects, but that it also implies the progressive development of self-management and consequently of the participation of members in the sphere of business management which, in turn, requires:

a) The development of suitable mechanisms and channels for participation.

b) Freedom of information concerning the development of the basic management variables of the Cooperative.

c) The practice of methods of consultation and negotiation with worker-members and their social representatives in economic, organisational and labour decisions which concern or affect them.

d) The systematic application of social and professional training plans for members.

e) The establishment of internal promotion as the basic means of covering posts with greater professional responsibility.”

(source: The Mondragon Cooperative Experience, by José María Ormaechea, 2000)

Second, I want to parse the word management. We manage our co-operative whether or not we have a person holding a title with the word “manager”. Some co-ops manage collectively, some manage through a hierarchy, but we all manage the same things: assets, liabilities, equity, work performance, customer satisfaction etc. In this, as in most posts, I use the term management and manager in the broad sense.

Participatory management does not mean democracy and democracy does not mean participatory management. I say this because they are often linked together in a synonymous manner. A worker co-operative can have a strict top-down hierarchy that allows little or no member input and still elect its board of directors. Likewise, the concept of participatory workplaces can exist in capitalist organizations.

This principle exposes some dangers to worker co-operatives in that it is this area that the co-operative movement may be co-opted. World Blu has created a list of the “most democratic workplaces” for a couple of years now. While I have nothing against their mission, they misuse the word democracy when they mean participatory management. Only a handful of the companies on their list are co-ops or esops. In other words, they are honoring workplaces as “democratic” when the workers have no control over the governance of the organization. While I think that participatory management is a noble thing for a stock corporation to entertain, it isn’t democracy, it isn’t a right. It can be taken away as soon as the stockholders decide the experiment isn’t making them enough money. While I support World Blu’s efforts to humanize capitalism, I don’t think it will ever succeed on a grand scale but am glad that the workers in those business have a decent place to work.

A worker co-operative should abide by the values and principles of democracy. Participatory management should be another user principle for co-operatives even if it isn’t in the Identity Statement. It is the means by which the workers of the co-operative “use” their co-operative. Just as consumers use the products and services of a consumer co-operatives, workers use their ability to participate in decisions affecting their work life (roughly ¼-1/3 of our lives) as their right of membership.

Mondragon has created an excellent definition of participatory management. It isn’t simply deciding what type chairs to get for the office, it involves a complete involvement of the workforce in the operations and planning of the organization.

Note though, that the principle discusses the creation of “suitable” methods. Decisions have to be made and they have to be made in a way that enhances the organization in terms of serving their customers and succeeding in the market place. A restaurant can’t hold a membership meeting to discuss which person serves which table every time a customer walks in for dinner. A cab company can’t hold a debate about call assignment for each and every order. However, the co-operative can create methods of having these discussions about systems that ensure fairness and those methods should involve a wide range of voices from the membership.

Information has to be available to everyone or how can it truly run as a democracy. This isn’t on a “need-to-know” basis, but on the basis of ownership.

Another key point is that the co-operative needs to create bodies that will assist the worker-members in finding their voice. This might be a peer support program, a traditional stewards’ council, or even a labor union (although that is decidedly not what Mondragon is talking about). The bigger point being that management in a worker co-operative (whether run with a hierarchy or not) needs to establish means for worker’s to have a real voice in the discussion. Depending on the size of the organization (and the work week schedule) this will have different levels of formality. Rainbow Grocery is famous for its collectivist approach while Union CabMondragon models the labor movement through a stewards’ council and committee structure. uses a “social committee” in which elected representatives help provide input to the board and management as well as acting as a watch dog.

The last two points of the principle create an imperative of making participation systemic. As with the Sovereignty of Labour, this principle promotes the belief of internal promotion. The top end positions of a worker co-operative should generally not be hired from the outside of the worker co-operative movement. It is better for worker co-operative to create strong in-house training (and utilize professional development programs such as the Masters of Management: Co-operatives and Credit Unions) to develop the future leaders of the co-operative. One of the problems, in the United States, is that our co-operatives tend to be small and this limits opportunity for workers to advance and develop. It also limits the level of education and training that can be provided. However, we need to think beyond our stand-alone co-operatives. Just as Mondragon is a system of 180 or so co-operatives, we should start thinking of US Worker Cooperatives existing as an economic base.

Ormaechea chose this particular quote from Don José: “Co-operation brings people together in a collective task, but it gives each one responsibility. It is the development of the individual, not against the rest, but with the rest.”

By creating a base of strong management of our co-operatives we build the capacity for the movement to grow. We create the means for our co-operatives to cross-pollinate, to occasionally go outside of our stand-alone co-ops and we also create the means for the rank-and-file members to expand themselves, to develop themselves as people.

Fifteen years ago, Clara Calvo had just left her husband and her job. Both were abusive in their own ways. Her husband beat her, while her job at a beauty salon required long, unpredictable hours for little pay. Before that, she worked in a clothing factory in midtown Manhattan, earning a pittance for each hat she sewed, having immigrated from the Dominican Republic in 1995. Today, Calvo is able to support her three children as a single mother and sits on the board of company with over 2,000 employees that does $60 million in business per year.

But Calvo also works as home health care worker, making just $10 an hour. Her company,Cooperative Home Care Associates (CHCA), is not like most other companies. It is a worker cooperative, an ownership structure that is somewhat rare in the U.S. but much more common in Spain, Italy, and parts of Latin America. In a worker cooperative, every worker can own an equal share of the company (and its profits) and get a say in company decisions.

Today, worker co-ops are growing in popularity in the U.S., both for people ideologically drawn to an equitable workplace and as a means for economically disadvantaged people to control their own destiny. But among worker cooperatives, CHCA is rare in for its size (employing over 2,000 workers), its longevity (currently in its 30th year), and its success (it has been profitable in all but three of those years).

Unlike other corporations, CHCA's workers get a say in important decisions: Eight of its 12 board members are home health care aides, the company's front line workers. That board makes major decisions just like in other corporations, such as hiring the company's president. When Michael Elsas, CHCA's current president and a veteran of the home health care industry was interviewed by the board, he says he was shocked.

"That interview was horrifying for me," says Elsas. "After 25 years in the home care industry, it was the first time I was interviewed for a job by home care workers. I didn't know how to act."

"THEY'RE SEEN AS AN EXPENDABLE WORKFORCE."

Now in his 15th year at CHCA, Elsas has seen the industry from many sides. "Most agencies don't care about the workers in this industry," says Elsas. "Nobody cares about their benefits. Nobody cares about how much you train them. They're seen as an expendable workforce."

Home care workers are near the bottom of the medical hierarchy: beneath doctors, pharmacists, and nurses; beneath technicians, and beneath medical assistants. Because of the little training required—as few as 75 hours to be certified—others in the field tend to look down on them. And yet, these aides do some of the most intimate and physically demanding work imaginable. They care for our elderly and disabled, assisting with daily tasks that people can no longer perform for themselves, like cooking, dressing, and even bathing and using the bathroom.

A quarter of the workers who do this labor live in households below the federal poverty line and half only do the job part-time. These workers are overwhelmingly female (90%), people of color (56%), and lacking formal education (58% have at most a high school diploma or GED). Despite being health care workers, one in three did not have health insurance as of 2014.

For those who need home care and their loved ones, these should be troubling statistics. Workers who are treated poorly are prone to being abusive themselves, much like in nursing homes. Both industries have the ingredients for the toxic cocktail of abusive caregivers: lack of supervision, poor wages, and understaffing. Precise data is hard to come by because of the unsupervised nature of the work, but according to one study, 20% of disabled women reported being physically or sexually abused by their home care providers.

Despite the poor conditions and problems in the industry, personal care aides and home health aides are one of the nation's largest occupations and also the second and third-fastest growing occupations in the country, according to the Bureau of Labor Statistics. (And the fastest growing occupation, "industrial-organizational psychologists," only accounts for 1,600 people nationwide; whereas PCAs and HHAs total over 2 million workers.)

THE NOT-SO-MAGIC FORMULA OF TREATING WORKERS WITH RESPECT

The median annual wage for home care workers is just around $20,000 a year, making it a crucial workforce to target to improve conditions for the working poor. That was the mission when social entrepreneur Rick Surpin founded CHCA in the South Bronx 30 years ago.

"CHCA was founded on the premise that if you provide a quality job, you'll get quality care," says Elsas. "The other thing you would be doing is you would be stabilizing a workforce that historically has been very transient—going from one job to another."

For years, CHCA has offered wages slightly above the industry standard, which in New York was often the state minimum wage. Yet workers at CHCA don't necessarily earn much more than their full-time counterparts at other agencies. The biggest difference is that more at CHCA actually do full-time work: After three years at CHCA, it guarantees workers full-time pay, whereas many agencies operate using contract workers. In addition, all CHCA workers get health care benefits—which, nationwide, is not the case for about a quarter of these workers. Finally, as worker-owners, CHCA members receive a share of the profits in the form of dividends. The president gets the same dividend as the newest home care worker, which usually averages around $200 to $300 a year.

The stability of the jobs CHCA offers is born out in its retention rate. The home care industry has an annual turnover rate of 40%—meaning that nearly half of home care workers leave their job or are fired every year. By contrast, CHCA's turnover rate is only 15%.

The payoff for that comes in the respect workers have for their clients. Every worker I spoke with at CHCA took pride in their work and said they love working with clients and helping them live fulfilling lives. It's striking that a job that requires so much empathy and has such an immediate impact on people's lives can be an almost minimum wage job.

"It's very rewarding to help clients have a life like they had before they were disabled," says Calvo, who has worked with some of her clients for over 10 years. At other home care agencies, that kind of consistency is unheard of.

Another CHCA worker, Diane Holmes, says that her favorite part of her job is coming into contact with different people, getting to know them, and being able to care for them.

"The way you touch somebody's life is really powerful," she says. "There's something very minute in their reaction, but you can honestly tell sometimes that what you do for them makes a big difference in their lives."

Wages, reliable work, and flexible scheduling so that women—many of them single mothers like Calvo—can balance the demands of parenting and work are all pieces of what makes CHCA so sharply different from other employment these women might otherwise take. That, in turn, is why workers tend to say in their jobs at CHCA and are more emotionally invested in their patients.

CHANGING AN INDUSTRY (AS MUCH AS POSSIBLE)

CHCA is certainly a more humane company than most of the others in the industry, especially in an impoverished area like the Bronx. Yet it also clearly has its limitations.

In a sense, CHCA is a study in scale for the co-op movement in the United States, especially in traditionally low-wage occupations. Is it possible to remain democratic while employing thousands, rather than dozens, of workers? Elsas and CHCA leadership think so. But the limiting factor might be the wages of the work and the need to change the broader industry as a whole first. When people are just barely making ends meet, they might not have much time to engage in workplace democracy. Elsas readily admits that voter participation is low in the elections for the eight worker board members. And of the 2,000 workers employed by CHCA, only half are actually worker-owners. This is despite the fact that CHCA makes it extremely easy to buy a $1,000 share of the company: Workers have to put up just $50 to get ownership privileges; CHCA provides an interest-free loan for the remaining $950 and then deducts $3.50 a week until that loan is paid off.

CHCA is faced with outside constraints on how much it can pay its workers. Unlike most industries, prices for home care service are effectively set by the government. Through Medicaid, Medicare, and other programs, the government pays for 73% of billings in the $61 billion home care services industry. Private insurers pay another 15%.

That means that for-profit home care agencies cannot simply raise the costs of their services and pass that money onto rank and file employees—even for worker co-ops like CHCA that would be inclined to if they could. With most of the board made of rank and file workers, CHCA limits its administrative and executive salaries to reasonable, but still competitive levels. Elsas makes $201,000 a year, about nine times CHCA’s lowest paid worker, whereas the average salary for the CEO of a home care agency in New York state is $500,000. Meanwhile, the CEOs of mega-corporations like Walmart and Time Warner Cable make over 800 times the salaries of their average workers.

"To me, the most important metric is how much of a dollar that comes into the company goes to the workers," says Elsas. "Right now, it's 90 cents on the dollar."

To further improve workers' lives, CHCA has turned to a different tactic. A nonprofit arm founded by CHCA, the Paraprofessional Healthcare Institute, was part of a movement that successfully lobbied to increase the state minimum wage. Today, a new law in New York guarantees home health care workers $10 an hour.

In addition to making pay more equitable, CHCA also has a policy of internally promoting its own workers to administrative roles. Currently, 40 of the 100 administrative staff are former health care workers. Current workers say that the policy makes their supervisors much more approachable and understanding of the nature of the work and problems that can arise on the job. That kind of sensibility is a direct outgrowth of CHCA being a worker-owned business.

"We always feel that a career ladder is an important component of the company," says Elsas. "But we also believe very strongly in raising the floor."

The latter point may prove to be the most difficult because of the nature of the work and the market.

Based in the Bronx, CHCA's workforce pool likely relies more heavily on government assistance than the national average, even among other potential home care workers. CHCA's Executive Vice President Adira Powell says that 95% of CHCA trainees live below the federal poverty line when they start working at CHCA. The job is able to bring about half of them above the line, though this statistic is an approximation due to laws barring employers from collecting certain data about employees. But the rest still languish at income levels requiring government assistance, despite CHCA's best efforts.

"The stark reality is that even with the work we do to raise the floor when it comes to wages, our industry is one than has consistently and systematically kept our workers—predominantly women of color—in poverty," says Powell. "So we continue to fight."