Raise the Structure

Michael A. Peck plenary presentation to the Jackson Rising Conference

Jackson, Mississippi

Saturday, May 3^rd, 2014

• Dual-track Americas:
  • One is fast becoming a majority minority country within the next two decades
  • Another America is experiencing the highest degree of absentee ownership in its history.
  • The two do not overlap and they compete for air.
  • The true struggle to regain local neighborhood economic sovereignty to achieve higher standards of individual and community freedom and self-worth starts either by halting the march towards treating corporations as persons or accelerating the treatment of individuals as corporations.
  • Today, treating working class people as people clearly no longer works.

 

• The Score Card on Global Labor Arbitraging:
  • More than 60,000 American factories have closed since the 1992 NATA trade agreement
  • Today, 400 individuals own more wealth than half the country’s bottom 150 million citizens combined.
  • American ranks as the most unequal of any developed country and “distinguishes itself” at 65^th from the top most free countries based on global social mobility and opportunity measurements

 

• Alternatives:
  • Mondragon, the world’s largest employee owned and governed industrial cooperative, workers decided 60 years ago that they should rent capital instead of letting capital rent their labor.
    • This is how Jackson Rises.

 

• The Plantation Economy Versus the Stakeholder Economy:
  • Plantation – the most offensive workplace classification – a definition of structural inequality
  • Which is sovereign, labor or capital?  Mondragon believes that labor is sovereign and that capital, while necessary, is subordinate to labor.
  • America’s legal institutions favor capital.  Who pays the salaries and the rent is the owner, the so- called “residual claimant.” Everyone else is simply an employee or a temp, or a “taker”.
  • The results of this approach:
    • Consumer spending base is becoming too narrow
    • Business are running out of customers who can buy their products
    • Race to the bottom with wages, benefits, safety
    • Distressed communities
    • An economy & democracy that works for fewer and fewer people
  • Mondragon’s ten principles: Open Admission, Democratic Organization, Sovereignty of Labor, Instrumental and Subordinate Nature of Capital, Participation in Management, Wage Solidarity, Inter-Cooperation, Social Transformation, Universality & Education
    • Let’s change the structure of the American workplace leading with our own examples.
    • This is called twenty-first century “American Self-Reliance” and it means Equal Worker Ownership for All Workers
      • Jackson – Raise Your Structure

 

• Liberal Cities are economically leaving the rest of America’s Cities behind:
  • Cities like Pittsburgh, Minneapolis, Seattle and its new minimum wage law, Boston, Santa Fe, of course, New York City – many of these American Liberal cities are on the cutting edge of the current demographic transformation of the United States into a majority-minority nation.
    • But not all Cities are Equal – so we have to think smarter, not richer.
    • This means we have to substitute superior structure to optimize what we have before us, who we are, what we can do
    • Open-data culture in cities can combat climate change effects (e.g. New Orleans)
      • the Obama Administration Climate Data Initiative
    • An open data culture leads to more involvement, more stakeholders, more ownership.
      • Ownership is a time-honored, bipartisan American civic ethic
        • Jackson – We have to Raise this Structure

 

• The Sharing or “Gig” Economy:
  • Morning Joe (MSNBC) recently did a segment with an editor from Wired magazine…  with all the morning chatterers fretting about the new “trust-based economy”… companies like AirBNB and how risky it is to share our homes with strangers… the irony that people don’t trust traditional institutions (big banks) and yet they trust strangers to live in their houses.
  • Sharing Economy business models are based on helping people who are economically struggling.
    • Like Amazon warehouse workers who are minimum wagers
    • Like Wal-Mart workers who are minimum wagers
    • Like McDonalds workers who are minimum wagers
  • From “The Internet’s inequality bomb: The crash is coming — but the 1 percent won’t feel a thing” (Andrew Leonard, May 2/14 – View full article at Salon.com)
    • The sharing economy, by and large, provides platforms for people to squeeze a few extra dollars on the side to help pay the bills.
    • The real driver here —is desperation, not a national crusade for more trust
    • We’re sharing our belongings — or to be more precise, offering short-term rentals on them — because we have been forced to do so by our economic circumstances.
    • The “Gig” Economy is based on short-term deals that constantly have to be replaced, an exhausting and sometimes demeaning process.
    • The “Gig” Economy exerts downward pressure on wages by widening the pool of potential job applicants for any given task to essentially everyone with Internet access so that the lowest bid almost always wins.
  • It’s a new race to the bottom but this time via a smart phone (made overseas by Apple that does not like to pay U.S. taxes).
  • The sharing economy doesn’t just efficiently exploit our possessions; it ruthlessly exploits our labor.
  • Jackson, Mississippi has to evolve from a shareholder city to a stakeholder city.
    • Jackson – Raise the Structure

 

• Solutions:
• A California bill taxes CEOs whose income exceeds their workers “by too great a margin”.  This is called fixing the symptom instead of the disease.
• Seattle’s Mayor has a deal in the works for a $15 minimum wage.
• In the immediate, post Great Depression American 1930s, FDR reacting in horror against one third of our nation ill fed, ill-housed, and ill-clothed unleashed a great democratic surge in which workers, farmers, women, minorities, in­tellectuals, students, and others challenged the propertied and powerful in favor of extending and deepening freedom, equality, and democracy.
  • We can do this today.
  • We can do this in Jackson.
  • Raise the Structure.

• To paraphrase Michael Lewis’ conclusions in “Flash Boys” – what’s needed is for stakeholder investors and worker-owners to take responsibility for understanding the market, and then to seize its controls”.

 

• Seizing the Controls – Backed Up By Virtuous Cycle Metrics
  • The Mondragon Story & Example – Adapted to the U.S. through  www.1worker1vote.org
  • The Meta-Mondragon Network proves the benefits of  jobs & profits solidarity
    • FAGOR example – in a record four months, Mondragon has relocated 857 FAGOR worker-owners
    • Even in their own great recession, Spain: worker cooperatives in Spain grew by 32% in the third quarter of 2013, compared to the same period in 2012.
      • Over 80% of the people in these cooperative businesses hold steady jobs as worker-owners.  Women hold nearly 50% of these cooperative jobs, and 40% of the positions of responsibility, which is higher than other business models
    • Italy: David Erdal, author of Beyond The Corporation: Humanity Working, found that life expectancy for Italian citizens in a town with a high degree of co-operatives was 2.5 years longer than that of citizens in a nearby town without cooperatives.
    • We see this trend starting to emerge in U.S. geographies as an antidote to the oligarchic prism of income, mobility and opportunity inequalities and environmental injustices.

 

• Virtuous Cycle Metrics:
  • Research has shown that positive employee and company performance over time correlates directly to high impact management participation on all levels by worker owners combined with the broadest possible equity distribution among workers and the largest possible emphasis on worker education and training.
  • Employees with some form of worker ownership accumulate more savings than employees in non-participating firms; firms with some form of capital sharing perform better in the competitive marketplace that those without; and workers with profit sharing or employee stock ownership and stock purchase plans are higher paid and have more benefits than other workers
  • It appears that the new formula for American private sector competitiveness is staring the country in the face.
    • Jackson – Raise the Structure

 

• What Can We Do? – Launching 1worker1vote.org nationwide
• The American Sustainable Business Council (ASBC) and the “Ownership4All” parity campaign
  • All forms and silos of worker ownership (worker cooperatives, ESOPS, employee owned companies by other means, and now union-coops) under one common denominator framework to achieve greater critical mass before public policy decision-makers.
• How to recreate sixty years of Mondragon’s founding infrastructure (Mondragon University, Laboral Kutxa, and Lagun Oro – the three pillars – education, banking, insurance mutual)) virtually in the U.S. through Mondragon USA & 1worker1vote.org

• We have stated to do this through the 2009 USW – Mondragon signed agreement and have accelerated our efforts since March 2012 when the final USW – Mondragon – OEOC union coop model template was announced in Pittsburgh:
• We are active now in 15 cities
• www.1worker1vote.org  will be offering the new, two-year Mondragon University Online MBA in English to universities that want to work with us
  • We hope to finalize these relationships by the end of 2014.
• Last September, we helped to activate a historic tie-up between Mondragon’s Bank, Laboral Kutxa, and the National Cooperative Bank based in Washington, D.C.

• CUNY Law Professor Carmen Huertas Noble who directs the CUNY LAW (City University of New York) Community Economic Development Clinic (CEDC) and who was the legal structuring force behind New York City’s “Colors” worker-owned restaurant has gotten CUNY to agree to be 1worker1vote.org’s fiscal agent.

 

• 1worker1vote:
  • Equalizes labor immobility with capital mobility
  • Reverses the concept of credit from a private to a social good.
  • Union-Coops operating under the Mondragon principles can make sure no worker community -organized, unorganized, or alternative – is left behind.

 

• Jackson, Mississippi – Raise the Structure.

 

-Michael serves as Mondragon’s North America delegate (since 2000) and is a co-founder of www.1worker1vote.org –