JoshHeaps.Net/JoshHeaps.Net/Content/Socialism/worker-ownership.md

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title: Worker Ownership section: The Co-op order: 20 summary: What a worker co-op means here: one member, one vote from day one, and a profit share that grows with tenure and then caps.

Worker Ownership

A worker co-op under this model means two things, and they are not the same thing:

One worker, one vote. Unconditional, from membership. This is the moral core and it does not ramp, vest, or vary. The objection to the current system is domination: being ruled by a distant firm that answers to nobody who works there. The cure for domination is the vote, and you don't earn your way into not being dominated.

Profit share ramps with tenure, then caps. A new member starts at a partial share and grows to a full, equal share over roughly five to ten years. After the cap, everyone's share is identical. The thirty-year lifer and the eight-year veteran split profit the same.

Why the ramp: it kills the dilution panic. Under flat equal shares, every new hire immediately eats everyone's slice, and cooperatives empirically under-hire for exactly that reason. With a ramp, hiring decisions move toward "does this person grow the pie" during precisely the window when their value is most uncertain. The ramp only softens the problem, though. How co-ops can grow into lower-margin work without shrinking everyone's share is in When Growing Means Sharing.

Federal tax law narrows what the ramp can do. Profit shares are counted per hour worked, and the part of a share a new member hasn't reached yet can't go to the other members without being taxed twice. So by default it goes to the co-op's permanent reserve. The ramp still makes new members earn their way to a full share, but it no longer protects everyone else's share from new hires, unless a co-op pays the difference as wages for years of service (How a Locked Co-op Is Taxed).

Protected leave (parental, medical, caregiving) counts as tenure, so taking time off to care for someone doesn't set your share back. So does earlier time at the same co-op: someone who leaves and comes back within a few years picks up where they left off.

Membership itself comes automatically after a short probation, unless a worker opts out. In jobs like home care, where most people move on within a year or two, that's what keeps a co-op from becoming a club of the few who stay (When People Don't Stay Long).

Where does the profit share actually go? Part is paid in cash each year, and part goes into a personal account that pays each year's share back after about five years. See Member Capital Accounts.

Why the cap: uncapped tenure weighting builds a gerontocracy of shares and chains people to their first employer. Capped at a career-fraction, people can change companies, move cities, start over, and still reach a full share with plenty of career left.

• Base salaries still exist, set by the company. A brain surgeon won't work somewhere without a high salary, and shouldn't have to. Hard jobs and in-demand jobs still pay more. The incentive to do difficult work survives intact. Pay isn't capped, but raising salaries doesn't let members skip the co-op's reserve: it takes its share of pay above the going rate too (Investing for the Long Run). How pay gets set, in the open and by the right people, is in Who Sets the Pay.
• Governance is up to each company. Workers pass bylaws deciding what requires a vote and what doesn't. Some will use direct democracy, some representative systems, some will delegate almost everything to management they hire and can fire. "Workers vote on every decision" is a strawman and always was. Why anyone works hard when the profit is split so many ways, and what happens when someone doesn't, is in Does Sharing the Profit Mean Less Effort?.

The concrete case: the average employee where I work generates roughly $150,000/year in profit after all costs. That money currently flows upward to private equity. A firm with those economics, built as a co-op, sends it to the people who made it. The numbers, using public figures, are in What If Conservice Had Been a Co-op?.