JoshHeaps.Net/JoshHeaps.Net/Content/Socialism/high-turnover.md

title, section, order, summary

title	section	order	summary
When People Don't Stay Long	The Co-op	28	In jobs like home care, most workers leave within a year or two, so the model makes membership automatic after a short probation, keeps the buy-in small and out of people's paychecks, and guards against co-ops that push people out before they'd join.

When People Don't Stay Long

This model's co-ops are run by their members, and it takes membership seriously. After a trial period (probation) of at most 12 months, workers become members, and members must do at least three-quarters of the work hours (The Lock). That rule stops a co-op from turning into a small club of owners employing everyone else.

But in some of the jobs where co-ops matter most, people don't stay long. In those jobs, the rule as first written could fail a co-op that was doing everything right.

The problem

Home care loses most of its workers every year. Home care aides help older and disabled people at home: bathing, meals, medication. An industry benchmarking survey published in 2024 put home care worker turnover at about 79% a year (Home Health Care News, 2024). Turnover here means the number of people who left in a year, divided by the average number of workers.

Co-ops do better, but still lose a lot of people. In 2017 there were 14 home care co-ops in nine states, employing about 2,400 caregivers. One account puts their turnover at about 38%, against 82% for the industry at its peak (OnLabor, 2022). That's a small, uncontrolled comparison, but it points one way.

With that much turnover, many workers never get past a 12-month probation. If people leave at a steady rate through the year, here's roughly what share of the workforce at any moment has been there long enough to join:

Turnover per year	Past 3 months	Past 6 months	Past 12 months
20%	95%	90%	82%
38% (home care co-ops)	91%	83%	68%
65%	85%	72%	52%
80% (home care industry)	82%	67%	45%

This is a simple model, and it counts people, while the rule counts hours. Both of those make the real picture somewhat better: many people leave in their first few weeks, and people who stay tend to work more hours. But the point holds. With a 12-month probation, a home care co-op can fail the three-quarters rule even if every eligible worker joins.

The biggest real example shows the other half of the problem. Cooperative Home Care Associates in the Bronx was started in 1985 by 12 home health aides and is one of the largest worker co-ops in the country. It's also unionized, with 1199SEIU (CHCA). It offers ownership after just three months. But workers have to choose to buy a $1,000 share, paid over time from their paychecks. In 2005, about 70% of its aides were owners, and 95% to 97% of those owners worked full time, so by hours it may well have met this model's rule. At a smaller sister co-op in Philadelphia, about 40% of aides were owners (PHI, 2005). By 2021, one account put CHCA at over 1,000 owners among 2,600 employees (OnLabor). That count may include office staff, and it's by head, not by hours. But it suggests that when membership has to be chosen and paid for, many workers don't take it up.

To be fair to CHCA: it has stayed a real, worker-governed co-op for about 40 years with many workers who weren't owners. A union contract covering everyone helps explain why. This model still sets a membership rule, because not every co-op will have CHCA's history or its union.

Two bad answers

• Loosen the three-quarters rule. That lets a co-op run on non-members again, which is exactly the slide the rule exists to stop. In a high-turnover business, "most of the workers aren't members" can easily become permanent.
• Exempt care work. That would exempt the co-ops whose workers are least able to protect themselves.

The answer: let people in sooner, by default, at no cost up front

Membership is automatic

When probation ends, a worker becomes a member unless they say no. They don't have to apply, and nobody has to approve them.

This matters more than it sounds. When one large company started signing new workers up for its retirement plan automatically, 86% of new hires took part, compared with 37% of workers hired just before, at the same length of time on the job. The biggest gains were among the lowest-paid, whose participation went from 13% to 80% (Madrian and Shea, 2000). People mostly stay with whatever happens by default. So the default should be membership.

A retirement plan and a co-op aren't the same, and the same study found that people signed up by default mostly stayed passive about their choices. A member signed up by default may not act like an owner at first. The model's bet is that having the vote is the precondition for using it.

• Saying no is easy and goes through someone independent. A worker can opt out by phone, in person or in writing, in their own language, with the co-op's lock-holder, the independent body that guards each co-op's lock, rather than with their manager. So managers can't quietly talk people out of joining. Anyone who opts out can change their mind within 30 days, or join later at any time.
• Members and non-members get the same pay and schedules. A co-op can't pay non-members more, or give them better shifts, to keep them from joining.
• People who freely opt out don't sink the co-op. Hours worked by people who opted out through the lock-holder count toward the three-quarters rule, up to one-tenth of all hours. Beyond that, they count as non-member hours. So a co-op isn't punished for a few workers' free choices, but it can't run on them either.

Joining costs nothing up front

Existing home care co-ops charge refundable fees of $25 to $1,000, often taken from paychecks a little at a time (PHI, 2005). That's a real cost for someone earning an aide's wage, and in many states a deduction from pay needs the worker's written permission.

So in this model, the buy-in comes out of the member's own profit shares, not their paycheck. It's capped at $1,000. Until it's covered, part of each profit share goes toward it instead of being paid out in cash, though never the cash a member needs to pay tax on their share. A member can choose to pay it faster from their pay if they ask in writing. Either way, it sits in their own capital account and is paid back to them on the account's normal schedule, whether or not they stay.

A short probation

Probation still can't be longer than 12 months. But a co-op can make it shorter, and the model's standard bylaws use three months, as Cooperative Home Care Associates does. The table shows why a high-turnover co-op will want that: at 38% turnover, a three-month probation puts about 91% of the workforce past it.

Why letting people in early is affordable. It's the profit share ramp. A new member starts with a small slice of the profit that grows over the years. So a new member takes only a small slice of the profit at first. The rest of what their hours earn goes to the co-op's reserve, not to the other members, because of how federal tax law treats profit shares (How a Locked Co-op Is Taxed). What the new member gets right away is the vote. Under this model, that doesn't wait. Workers on probation get a profit share too, in cash, at the rate of a member just starting out.

No pushing people out before they'd join

If membership comes at three months, a co-op that wanted to stay a small club could let people go at two and a half, or cut their hours until they quit. So:

• Every hour counts, whoever signs the paycheck. Hours worked on the co-op's business by staffing-agency workers, contractors or a related company's staff count as non-member hours. A co-op can't get around the rule by putting its workers on someone else's payroll.
• Probation counts across rehiring. Time on probation adds up across every stint at the same co-op within three years. Letting someone go and rehiring them doesn't restart the clock.
• Pushing people out counts as letting them go. If someone on probation quits within 60 days after their hours were cut by a quarter or more, or after they lost their regular clients, it counts as the co-op's decision, not theirs.
• The test looks at results. Each year the co-op reports how many people it hired, how many it let go (counted as above) before they could join, and why. The lock-holder compares that with the same co-op's record after people become members, and with similar co-ops. It looks only once there are enough cases to mean something, at least five over three years. Dismissals for a documented reason, like a client's safety or a failed background check, don't count. A worker can also complain directly to the lock-holder.
• A finding has to be earned. Before a pattern counts against the co-op, the co-op sees the evidence and can answer it. A confirmed pattern counts as failing the membership rule for that year.

A start-up period

A new co-op that's hiring fast will always have many people on probation. So the rule phases in. There's no hours test in the first year, members must do at least half the hours in the second, and three-quarters from the third on. Automatic membership and the 12-month limit apply from day one.

Unions stay

Becoming a member doesn't end a union contract. A union can keep representing workers, members and non-members alike, as 1199SEIU does at CHCA. Federal labor law may not protect members' own organizing, though, so the charter does (Owners Are Still Workers). Members are also paid for time spent on the co-op's committees and board, as CHCA and its sister co-op already do (PHI, 2005), so taking part in governance doesn't cost an aide a shift.

The ramp, when people leave early

The founding plan sets the profit share ramp at five to ten years. In a job where many people stay two or three, most will leave before they ever reach a full share. At 38% turnover with a three-month probation and a five-year ramp, only about one worker in seven has a full share at any moment. That's a real cost of the ramp, and it's worth saying plainly.

Some things make it less harsh than it sounds:

• The vote doesn't ramp. A member who stays one year has the same vote as one who stays thirty.
• Time on the ramp adds up. Someone who leaves and comes back within a few years picks up where they left off, and protected leave, like parental or medical leave, counts as time worked (Worker Ownership). That matters in care work, where many workers, most of them women, step out for a while to care for their own families.
• Whatever they built goes with them. A member's account keeps paying out on its normal schedule after they leave, and small balances are paid all at once (Member Capital Accounts).
• In care work, the profit is small anyway. At home care's thin margins, a full share is worth a couple of thousand dollars a year, and a typical member's is less (Member Capital Accounts). For these workers, most of what matters is pay, hours and a say in how the work is done.

A co-op can choose the short end of the ramp. This page doesn't shorten it further, because the founding plan sets that range on purpose. A longer ramp was meant to let a co-op hire without every new member cutting into everyone else's share right away. Under tax law, it only does that if the co-op pays the difference as wages for years of service (How a Locked Co-op Is Taxed). Whether low-margin, high-turnover co-ops should be allowed a much shorter ramp is an open question (Open Problems).

What this doesn't solve

• Ownership doesn't fix the pay. Home care wages are low largely because much of the work is paid for by public programs like Medicaid, at rates the agencies don't set. A co-op can't pay more than it's paid. It can offer steadier hours, training and a say, and co-ops seem to keep people longer. But the pay problem needs better public rates, rules that send more of those rates to workers, and unions bargaining for them, along with the floor.
• The numbers are rough. Turnover varies a lot between agencies, the home care industry figure comes from a survey of agencies that chose to take part, and the co-ops' 38% comes from a small count. The pilot will measure this directly and report results by industry.
• Automatic membership hasn't been tried at a large care co-op. It should raise membership a lot. How much, and whether default members take part in governance, is unknown.
• A short probation means less time to judge fit. A co-op admits people it has known for three months, and they vote. That's the trade-off the model accepts. The ramp limits what a poor fit costs in money. It doesn't limit their vote.
• The stable minority can still run things. Office staff and coordinators often stay while aides come and go. One member, one vote and paid meeting time help. They don't guarantee aides a real voice.
• Some things need legal work. How membership interacts with tax filing for members without Social Security numbers, with visa status, and with the asset limits of public benefits needs answers before care co-ops sign people up automatically. Federal labor law probably doesn't protect union activity by members who own the firm. The charter protects it instead, and fixing the law takes a separate bill (Owners Are Still Workers).
• Opting out can still be pressured, and pushing people out can still be hidden. An independent lock-holder and results-based checks make both harder. They can't make them impossible.