Socialism: say what the rules cost a small co-op, and scale the checks to size

Co-Authored-By: Claude Opus 5.5 <[email protected]> Claude-Session: https://claude.ai/code/session_01QWPs69B8nQZjtPEUXMKzZx
2026-09-25 18:15:07 -06:00
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@@ -59,7 +59,7 @@ State co-op law supports the owner's-share reading, but it doesn't settle it. Ma
 - **Where it's unclear, the co-op doesn't bet on it.** The bank publishes a checked entry for each state, signed by a lawyer licensed there and reviewed every year, saying whether its wage law could reach account credits. Before lending in a state, the bank asks the state's labor agency for its view. Where the answer is "could," co-ops in that state don't use members' accounts. The members' share is paid all in cash, and a co-op that wants more money to invest sends more of its profit to the permanent reserve instead. Members there don't build savings in the co-op until the state's law changes.
 - **The model state law fixes it at the source.** It amends the state's wage-payment law itself, not only its co-op law: a written share of profit that a business allocates to its owners, under a formula set in advance and only after every worker has been paid at least the going rate, isn't wages for that law. It applies to any business that does this, not only co-ops, so it isn't a favor to one kind of firm. It sits in the short law that already recognizes locked co-ops ([Making It Last](durability.md#federal-test-state-copies)).
 - **Every credit comes with a written notice.** Each year, each person gets a notice showing the amount credited and when it's scheduled to be paid, which is what those co-op laws describe. It also says plainly that the credit isn't a wage, that it can be reduced by losses or paused until it's paid, and where to file a wage claim if they think wages are owed.
- **The going rate is checked.** The owner's-share argument only holds if wages really come first. So the co-op's auditor certifies each year that every worker was paid at least the going rate, against the public benchmark in [the pay rule](the-long-run.md#the-rules), and any shortfall is paid as wages before any profit is shared.
+- **The going rate is checked.** The owner's-share argument only holds if wages really come first. So the co-op's outside accountant tests each year that every worker was paid at least the going rate, against the public benchmark in [the pay rule](the-long-run.md#the-rules), and any shortfall is paid as wages before any profit is shared. In small co-ops that's a fixed test of every worker's pay rather than a full audit ([What the Rules Cost a Small Co-op](compliance.md#one-package-done-once-a-year)).

 **What members give up.** Calling the share an owner's share has costs. Unpaid wages get priority in a bankruptcy, up to $17,150 per worker ([11 U.S.C. § 507(a)(4)](https://www.law.cornell.edu/uscode/text/11/507)). Account credits don't, and they rank behind the co-op's lenders ([Member Capital Accounts](capital-accounts.md#protecting-the-co-op-and-the-people-who-stay)). Unemployment and injury benefits are figured from wages, so the share doesn't raise them. Federal limits on garnishment cover any "bonus" paid for work ([15 U.S.C. § 1672](https://www.law.cornell.edu/uscode/text/15/1672)), so a cash share probably gets that protection anyway. The [savings insurance pool](savings-guarantee.md) covers part of the bankruptcy gap for people who have left.