> We all get paid the same hourly rate regardless of the roles we do.
Good luck retaining any skilled professionals then. One of the most repulsing stories that I got from Soviet Union from my grandparents was about excellent engineers being on the same pay scale with manual labour workers. No matter how much do you put into your skills, the system had standard pay scale that you couldn't break out from.
I'm happy that these days are gone now, and skills and professionalism can be valued by the free market by people competing for them; why, despite pure populism for the lowest common denominator, someone wants to return to something like this, is completely beyond me.
Equal payment is definitely not the norm for co-ops worldwide. Workers realize they should be paid for their contribution. For example at Mondragón, a network of cooperatives in Spain which employs 75,000 people, workers established a scheme that distributes profits in line with contributions. The difference between this co-op and other businesses is that workers decided to collectively absorb the impact of the Recession, taking a 5% pay cut and shifting jobs between co-ops as needed such that zero workers were fired despite an economic downturn.
What you will see is that, for example, instead of top managers of a co-op making hundreds or thousands more than the median employee as in a public corporation, they make a more sensible amount which still attracts and sustains the best talent in the enterprise.
> skills and professionalism can be valued by the free market by people competing for them; why, despite pure populism for the lowest common denominator, someone wants to return to something like this, is completely beyond me.
The real determination of where the money goes is by the owners of the business. If one looks over the Forbes 400 richest list, we can see the heirs who drain off so much profit each year from the labor of those who work - the Kochs, the Waltons, the Johnson family. The Rockefellers fell off the list in the past few years, $2 billion is the individual cutoff and I suppose Forbes doesn't know of any individual in the family worth more that that. But I can assure you if they and their three siblings are worth 1.5 billion each, and their first cousins are all worth 1.5 billion each, they are not out there breaking the bricks.
It's amusing to hear about meritocracy and the rat race for education, skills etc. when these heirs are the people controlling the economy, and causing so many economic and other problems due to its increasing lopsidedness towards them. What are their skills and professionalism that are valued? The money they suck off from those who work is the truest lowest common denominator, rule by parasites. At least Lenin, Stalin and Molotov rose due to their merits, not their birthrights. Russia went from being a country pushed around by the Japanese, with an GDP equivalent to 1917 Brazil, to a superpower sending satellites, men into space, probes to the Moon (the first country to do so). It also had little crime and little poverty.
I am supposed to get into a tizzy about someone with less skills getting the same pay as me, when the money is being sent off to the heirs who do no work? I certainly would prefer that the people actually doing the work alongside me get the money.
Seriously. Can you imagine trying to hire a skilled professional who has put years of effort into acquiring a skill when you won't pay them any more than a retail cashier?
> Good luck retaining any skilled professionals then.
I was thinking exactly the same. I’m spinning up a small technical manufacturing business and my first products will have wireless capabilities. I’d better not pay my wireless engineers and programmers the same price as my unskilled assemblers. The former can save me hundreds of thousands per year with their acquired knowledge; the latter, dozens of dollars over China. And if I ever get big enough to need C-level execs, I’ll never fill the positions with good employees on tech support pay.
This world is set up to reward value, not hard work. It’s hard work to dig a ditch, but not terribly valuable. A well-paid, intelligent, quality C-level exec can create more value in a week than a hundred cashiers can in a month.
> Good luck retaining any skilled professionals then.
It's a good wholesaler where employees “multiskill” so that roles re flexible; virtually all skilled professionals are probably outsourced (which isn't uncommon in firms where professional services aren't the core business, even if they aren't coops.)
Equal pay isn't a universal (or even dominant) norm for worker coops, though they do tend to have flatter pay structures than traditional firms.
> One of the most repulsing stories that I got from Soviet Union from my grandparents was about excellent engineers being on the same pay scale with manual labour workers.
Which would be germane if we were talking about either the Soviet Union or a system with that feature, which we are not.
Isn't it the case that with this sort of system that if you increase your skills, your company is more profitable and therefore you all get paid more? (Which is a common system in capitalist America - the exact same job with the exact same skills at different companies pays differently based on the company's ability to pay, and year-end bonuses are often linked to the company's profits that year. And employees who get stock grants or options are effectively compensated based on the performance of the company, incentivizing them to cause the company to succeed.)
That's very different from a system where the government sets pay scales for the entire country, and an individual's efforts cannot make a meaningful change in their own earnings. In the system described in the article, it can.
Skillfulness to me implies giving a crap about the world you share with others. Skilled, in comparison, is a consolation price.
> One of the most repulsing stories that I got from Soviet Union from my grandparents was about excellent engineers being on the same pay scale with manual labour workers.
That's the most repulsing? Nothing about children and old people being murdered en masse? See above, more skillful grandparents would have told wholly different stories.
I'd be interested in the economics of founders selling to their employees from a founder's point of view. It seems like a way to protect a founder's legacy after they exit.
Where does the money come from? Do the employees get a loan and then the money from the loan go to the founder? Does the founder provide a loan to the employees and receive regular payments on the loan? Do the employees have to have cash? Do all employees own equal shares regardless of role of employment length? Do employees buy businesses at the market rate?
Employee Stock Options Programs (ESOPs) are the way most conduct this transaction. It's frequently a way for a founder to sell to employees due to relationships/promises, to get a higher valuation than the market offers, or, like with options, to incentivize productivity and retention.
The employees can get a loan with the business as collateral but the founder/s is going to hold a note as well. Assignments of stock are similar to options - customizable but more valuable employees get the lion's share.
In the post-WW II economic "golden age," roughly up through the early 1970s, American manufacturing workers and the corporations they worked for were also both doing well. That fell apart as America went from a net exporter to net importer. I'm unsure if the importer/exporter transition is a direct cause, because a lot of things changed in the 1970s, but that's about the time the party ended.
I wonder if Germany will do better when/if Germany no longer has a substantial export surplus. I hope that it can. It's mathematically impossible for every country to run an export surplus, so "look to Germany" is a useful prescription only if there are other good ways to imitate Germany.
I find worker-owned businesses very interesting. Obviously getting paid the same regardless of role may be an obstacle to attracting highly skilled people, but if salaries are competitive and established in function of role and experience, in a transparent way, that could be great.
Yea, i wondered the same thing. I like the idea of a worker owned Co-op in general, but it's subject to them actually being functional. I don't see how that could be the case with industries with large productivity/talent gaps, like software. Most of the co-ops I've come into contact with are smallish restaurants or grocery stores, which makes sense: most tasks can be handled by anyone and those that aren't can be judged a lot more effectively.
Worker cooperatives tend have the problem that it's hard to compare contributions of labour. The coop model tends to work best when most or all the workers are of a similar sort. More cohesion and less resentment that way. That's probably why the company has everyone do every job.
Specialists are hard to employ like that, but the trick is that you don't need to hire them. Rather than keeping an accountant in house, you can just contract an accounting firm to handle it. You might not have an in-house lawyer, but you'll be a client for a law firm.
That being said, there may be some soul searching when Jim the Janitor complains he's basically a second-class employee because technically he just works for the company you're leasing the building from.
I was part of a worker owned company as a contractor. I believe it started with a lack of funds to pay employees so they had to trade pay for debt. In the end the Indian division bought out the parent company and closed down the north american offices.
There is an excellent book called 'Maverick' about a Brazilian manufacturing company that, while not owned by the workers, gets much closer than almost any other business. I highly recommend that all founders read it
I'll recount a short twitter conversation I had with some engineers who wanted to be in a collective, I suggested them all being equal partners, and was promptly blocked...
> My company laid off 17 engineers including me when we tried to unionize. Now I’m having a hard time finding a job. Any leads for junior-to-mid software developers in the DC area or remote, send em my way. And please share. #LanetixUnion #jobsearch - Sara J. Martinez
> Software developers are generally well treated and compensated.
What drove you to attempt unionizing? - Me.
> There should be interviews with Lanetix engineers coming out soon which will go in depth. For a quick overview, here is what we wrote to management: - Björn Westergard
> If you're a collective of software engineers worth bargaining with, you should all form your own consultancy firm, and forget about that "client".
This might be your best, realistic solution.
Thank me when you're making 2x, in nicer conditions and fewer hours... - Me
> This “solution” doesn’t scale due to the competitive race to the bottom dynamics of capitalism. Unions demonstrably do work at scale. Everyone is “worth bargaining with” for those who don’t to serve mammon alone. - Björn Westergard
> You have limited options as I see it, and you probably need to ask yourselves what's more important, getting back to work (but apparently not at Lanetix), or grinding an ideological axe?
If you're so egalitarian, make everyone an equal partner, and start looking for clients. - Me (https://twitter.com/aaronchall/status/970717102465323008)
Björn promptly blocked me at that point.
> "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
In this case, his non-existent union salary, I suppose...
[+] [-] golergka|8 years ago|reply
Good luck retaining any skilled professionals then. One of the most repulsing stories that I got from Soviet Union from my grandparents was about excellent engineers being on the same pay scale with manual labour workers. No matter how much do you put into your skills, the system had standard pay scale that you couldn't break out from.
I'm happy that these days are gone now, and skills and professionalism can be valued by the free market by people competing for them; why, despite pure populism for the lowest common denominator, someone wants to return to something like this, is completely beyond me.
[+] [-] fancyfish|8 years ago|reply
What you will see is that, for example, instead of top managers of a co-op making hundreds or thousands more than the median employee as in a public corporation, they make a more sensible amount which still attracts and sustains the best talent in the enterprise.
[+] [-] balance_factor|8 years ago|reply
The real determination of where the money goes is by the owners of the business. If one looks over the Forbes 400 richest list, we can see the heirs who drain off so much profit each year from the labor of those who work - the Kochs, the Waltons, the Johnson family. The Rockefellers fell off the list in the past few years, $2 billion is the individual cutoff and I suppose Forbes doesn't know of any individual in the family worth more that that. But I can assure you if they and their three siblings are worth 1.5 billion each, and their first cousins are all worth 1.5 billion each, they are not out there breaking the bricks.
It's amusing to hear about meritocracy and the rat race for education, skills etc. when these heirs are the people controlling the economy, and causing so many economic and other problems due to its increasing lopsidedness towards them. What are their skills and professionalism that are valued? The money they suck off from those who work is the truest lowest common denominator, rule by parasites. At least Lenin, Stalin and Molotov rose due to their merits, not their birthrights. Russia went from being a country pushed around by the Japanese, with an GDP equivalent to 1917 Brazil, to a superpower sending satellites, men into space, probes to the Moon (the first country to do so). It also had little crime and little poverty.
I am supposed to get into a tizzy about someone with less skills getting the same pay as me, when the money is being sent off to the heirs who do no work? I certainly would prefer that the people actually doing the work alongside me get the money.
[+] [-] morgante|8 years ago|reply
[+] [-] SlowBro|8 years ago|reply
I was thinking exactly the same. I’m spinning up a small technical manufacturing business and my first products will have wireless capabilities. I’d better not pay my wireless engineers and programmers the same price as my unskilled assemblers. The former can save me hundreds of thousands per year with their acquired knowledge; the latter, dozens of dollars over China. And if I ever get big enough to need C-level execs, I’ll never fill the positions with good employees on tech support pay.
This world is set up to reward value, not hard work. It’s hard work to dig a ditch, but not terribly valuable. A well-paid, intelligent, quality C-level exec can create more value in a week than a hundred cashiers can in a month.
[+] [-] dragonwriter|8 years ago|reply
It's a good wholesaler where employees “multiskill” so that roles re flexible; virtually all skilled professionals are probably outsourced (which isn't uncommon in firms where professional services aren't the core business, even if they aren't coops.)
Equal pay isn't a universal (or even dominant) norm for worker coops, though they do tend to have flatter pay structures than traditional firms.
> One of the most repulsing stories that I got from Soviet Union from my grandparents was about excellent engineers being on the same pay scale with manual labour workers.
Which would be germane if we were talking about either the Soviet Union or a system with that feature, which we are not.
[+] [-] crdoconnor|8 years ago|reply
They only coincide sometimes. Academia is one place in particular where the two do not go together.
[+] [-] downrightmike|8 years ago|reply
[+] [-] geofft|8 years ago|reply
That's very different from a system where the government sets pay scales for the entire country, and an individual's efforts cannot make a meaningful change in their own earnings. In the system described in the article, it can.
[+] [-] vedloseper|8 years ago|reply
> One of the most repulsing stories that I got from Soviet Union from my grandparents was about excellent engineers being on the same pay scale with manual labour workers.
That's the most repulsing? Nothing about children and old people being murdered en masse? See above, more skillful grandparents would have told wholly different stories.
[+] [-] muro|8 years ago|reply
[+] [-] lev99|8 years ago|reply
Where does the money come from? Do the employees get a loan and then the money from the loan go to the founder? Does the founder provide a loan to the employees and receive regular payments on the loan? Do the employees have to have cash? Do all employees own equal shares regardless of role of employment length? Do employees buy businesses at the market rate?
[+] [-] jubal00|8 years ago|reply
The employees can get a loan with the business as collateral but the founder/s is going to hold a note as well. Assignments of stock are similar to options - customizable but more valuable employees get the lion's share.
[+] [-] typeformer|8 years ago|reply
[+] [-] philipkglass|8 years ago|reply
I wonder if Germany will do better when/if Germany no longer has a substantial export surplus. I hope that it can. It's mathematically impossible for every country to run an export surplus, so "look to Germany" is a useful prescription only if there are other good ways to imitate Germany.
[+] [-] remir|8 years ago|reply
[+] [-] wutbrodo|8 years ago|reply
[+] [-] slavik81|8 years ago|reply
Specialists are hard to employ like that, but the trick is that you don't need to hire them. Rather than keeping an accountant in house, you can just contract an accounting firm to handle it. You might not have an in-house lawyer, but you'll be a client for a law firm.
That being said, there may be some soul searching when Jim the Janitor complains he's basically a second-class employee because technically he just works for the company you're leasing the building from.
[+] [-] wolco|8 years ago|reply
[+] [-] jacobkg|8 years ago|reply
https://www.amazon.com/Maverick-Success-Behind-Unusual-Workp...
[+] [-] Cyph0n|8 years ago|reply
The first successful non-hierarchial company that comes to my mind is Valve.
I recall reading that Valve has a higher revenue per employee than any company in the world...
Edit: profit, not revenue
[+] [-] aaronchall|8 years ago|reply
> My company laid off 17 engineers including me when we tried to unionize. Now I’m having a hard time finding a job. Any leads for junior-to-mid software developers in the DC area or remote, send em my way. And please share. #LanetixUnion #jobsearch - Sara J. Martinez
> Software developers are generally well treated and compensated. What drove you to attempt unionizing? - Me.
> There should be interviews with Lanetix engineers coming out soon which will go in depth. For a quick overview, here is what we wrote to management: - Björn Westergard
> If you're a collective of software engineers worth bargaining with, you should all form your own consultancy firm, and forget about that "client". This might be your best, realistic solution. Thank me when you're making 2x, in nicer conditions and fewer hours... - Me
> This “solution” doesn’t scale due to the competitive race to the bottom dynamics of capitalism. Unions demonstrably do work at scale. Everyone is “worth bargaining with” for those who don’t to serve mammon alone. - Björn Westergard
> You have limited options as I see it, and you probably need to ask yourselves what's more important, getting back to work (but apparently not at Lanetix), or grinding an ideological axe? If you're so egalitarian, make everyone an equal partner, and start looking for clients. - Me (https://twitter.com/aaronchall/status/970717102465323008)
Björn promptly blocked me at that point.
> "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"
In this case, his non-existent union salary, I suppose...
[+] [-] andrewclunn|8 years ago|reply
[deleted]
[+] [-] notyourday|8 years ago|reply
[+] [-] dang|8 years ago|reply