Worker Self-Directed Enterprises – A New Way of Thinking About the Workplace

Ryan Thombs, MPP

A democratic workplace in which the workers own and democratically decide how profit is distributed has long been the ideal of socialist thinkers. Marx referred to co-operatives, or democratically owned workplaces, as communism in The Civil War in France; and these ideas are echoed in  his other writings such as Das Kapital. Dr. Richard Wolff, a visiting professor at the New School University, has argued for years for democratizing the workplace. This is an alternative to the capitalist system, which is a top-down authoritarian mode of production based off of profit through selling oneself, also known as wage labor. Instead, Wolff calls for workers to democratically decide how to allocate the surplus they produce. Wolff’s redefinition of socialism moves the discussion away from property relations to the organization of the workplace. This definition allows for the development of Worker Self-Directed Enterprises (WSDEs), which could help to end economic exploitation and provide a new way of thinking about production and class relations.

The following are the top three reasons WSDEs or a democratic workplace initiative would lead to a more democratic and egalitarian economic system:

1. The economy would become democratic

In capitalism, the laborer sells himself to a capitalist who uses the worker’s labor as he sees fit to create a product and eventually a profit. The capitalist then gives the worker a share of the profit known as a wage. This system is inherently exploitive since the worker is paid less than what they produce. Creating a system in which everyone is a decision maker and a boss would ease this exploitation. Since work is a place where many people spend a large amount of their time, WSDEs simply make everyday life democratic.

2. The working class has struggled under Capitalism since the 1970s

In the United States, the real average weekly wage for production and non-supervisory employees has been declining since 1972. As illustrated in Figure 1 below, it peaked at $345.62 in 1972, and it was as low as $263.95 in 1996. As of July 2015, the real average weekly wage was $303.70, which is still below the real average weekly wage in 1964.

Figure 1: Average Weekly Earnings of Production and Non-supervisory Employees, 1982-84 Dollarsryan image

Source: Data adapted from “Employment, Hours, and Earnings from the Current Employment Statistics survey (National),” Bureau of Labor Statistics, 9/16/15, http://data.bls.gov/pdq/SurveyOutputServlet.

Additionally, income inequality has been increasing for some time. Similar to the decline in wages, inequality has been increasing since the 1970s. The work of Emmanuel Saez and Thomas Piketty shows that two-thirds of the growth in real incomes per family from 1993-2012 went to the top one percent of income earners. The top one percent has done particularly well after the great recession; 95 percent of total income growth from 2009-2012 went to the top one percent.

3. Enhanced community and place building

Want to keep jobs in the U.S.? Then democratize them! A worker-owned workplace will have no incentive to move production overseas, because if they did, they would lose their job. Additionally, workers will have a greater incentive to push for policies that better society as a whole. Examples of such policies include: workplace safety, environmental protection, education reform, parental leave, and building communities that are more compact and walk-able.

By focusing on the organization of the workplace, policy makers could begin to deal with the underlying causes of many of the tough and problematic economic issues that the U.S. faces. WSDEs would empower workers, raise wages, reduce income inequality, and keep jobs in the U.S. This transition would create an important alternative economic paradigm that could move society forward in a way that traditional socialism and capitalism could not.

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