Peck stressed the importance of the one worker, one vote principle, the commitment to invest in the community (social transformation) and wage solidarity, limiting management salary to 70% of the market rate. MCC is a strong diversified manufacturing conglomerate, the 7th largest in Spain and competitive globally in manufacturing.
Democratizing a workforce system eliminates the divide between workers, management, and board of directors. Shared decision making includes salary distribution, working conditions, product development, purchasing, and even retirement security by investing in retirement homes for employees.
Mondragon is not the only European example of a successful cooperative rewarding ingenuity and commitment. In Italy the Marcora Law enacted in 1985 ensures a unique approach to unemployment. Laid off workers are given a choice on how to use their unemployment benefits. They can go on incremental payments of unemployment or they can draw all the money in a lump sum if they join together with ten others and invest in a cooperative venture.
Why does the United States need to democratize work?
The slow demise of the Middle Class lowering the standard of living started in the 1970s as salaries began to stagnate. Corporations abandoned the United States for overseas markets taking advantage of low pay and lax environmental restrictions increasing profit margins leaving American cities as ghost towns of their former selves. Richard Wolff, Professor of Economics Emeritus, University of Massachusetts, Amherst from 1973 to 2008 and visiting Professor in the Graduate Program in International Affairs of the New School University, New York City, said the deterioration of the American standard of living and income inequality are linked to the deterioration of President Franklin D. Roosevelt’s New Deal. The segue away from programs ensuring upward mobility for the poor and Middle Class is more shocking than ever and blames both political parties for failing the Middle Class—in part because they lack diversity in points of view.
The Great Recession of 2008 was the result of a trend that had been percolating for decades—corporations and banks became reckless under deregulation that began under the Reagan Administration and continued for 30 years. The Glass-Steagall law of 1933 that had separated commercial and investment banking for 70 years was repealed in 1999 ensuring vast sums of capital could be manipulated by banks empowering corporations.
From 1978 to 2008 the divide between the average salary of workers and salaries of investment bankers widened. Average workers realized a 10 percent increase and investment bankers a 150 percent salary increase. Financial fraud was an outgrowth of deregulation, many times including the real estate market writ large in the housing crisis. The savings and loan crisis in the 1980s and 1990s was a harbinger of the future housing collapse in 2008 that robbed Americans of their homes and personhood.
Income inequality is the direct outgrowth of capitalism gone awry and unregulated. In 2009 the documentary film maker Michael Moore introduced his film “Capitalism: A Love Story.” Moore confronted Goldman Sachs, Walmart, and government officials about their contributions to the Great Recession and housing crisis. Also evangelicals, who comprise a component of the conservative tea party, are confronted on whether Jesus would be a capitalist. While the evangelical conservative group embraces free market capitalism, the contradictions inherent in their belief systems cannot be denied. But he was not the first film maker to decry the dangers of capitalism.
In the 1926 Fritz Lang movie “Metropolis,” a fictionalized city in 2026 is maintained by a worker class. The theme is chilling and almost too real as capitalism has created an underclass workforce that performs like robots. The wealthy industrialists rule the city while an endless supply of workers operates machines to provide the “power” for the city. The metaphor is obvious in the stark antagonism and separation of the poor and rich, where income class distinction is sustained by a corporate structure dependent on maintaining inequality.
The similarities to 21st century fugitive capitalism are unmistakable. The slow demise of the Middle Class is forcing more people into low paying jobs and the poor without a government safety net. Lang’s film might appear to be an exaggeration, but the prophetic images mirror disparities today as a result of deregulated banks and the rise of corporations. Income inequality is real and measurable.
Professor Wolff believes the change must come from the people in movements like “Occupy.” But there needs to be organization and structure, which “Occupy” lacked. Too often, he believes, people turn to the government for answers when they have the power to unite and demand change.
Workers need to become unionized again because currently only 7 percent of American workers belong to unions. In a stunning move in 2010 The United Steel Workers of America partnered with Mondragon Corporation. The cooperative model is in the United States. The collaboration with the United Steelworkers of America (USW) plan is to identify and convert 5 steel companies to a worker co-op form of ownership. Since the USW/MCC partnership was announced five years ago, the USW has been working to identify potential companies for conversions. Ten companies are under consideration.
I agree with Professor Wolff, and I also believe money has to be taken out of politics, so representation in state and federal governments reflects the population, not who can buy their way into an elected office and once there become indebted to campaign donors and lobbyists.
The Mondragon model is the most profound and transformative example of democracy in action in people’s lives using a cooperative system.
Woody Guthrie sang, “You can’t scare me, I’m sticking to the union” during the union movement in the 1930s and 40s. And continued to echo the sentiments of the working class with “this land is your land, this land is my land.” It was a manifesto on equality, and the lyrics are as poignant and true today as they were in 1940.
is retired and lives in Clearlake, California. She has three grown
children and one grandson and a Bachelor’s degree in Health Services
Administration from St. Mary’s College in Moraga California. On the
home front Dava enjoys time with her family, reading, gardening, cooking