The chain of command at PV Squared, a solar panel installation company in Massachusetts’s Pioneer Valley, is admittedly convoluted. “Technically, I’m Kim’s boss,” says general manager Jonathan Gregory of bookkeeper Kim Pinkham. But “Kim’s on the board, and the board oversees my position, so technically she’s my boss.”
As members of a worker-owned cooperative, the 40-plus employees elect their own board of directors and make decisions based not on majority rule, but by consensus. When they’re not holding the microphone, members at meetings express themselves with hand signals: a flat palm for a question or statement, a raised index finger for direct response, and a hand cupped in a “C” for a clarification.
Workplace democracy “challenges us as humans and as colleagues to think about what is the ultimate level of respect and mutual benefit,” Mr. Gregory says.
Employee-owned enterprises date to the 19th century, but the idea is gaining renewed interest in the United States. It’s fueled by demographic shifts that are causing businesses to change hands, as well as growing worries that the economy rewards elites instead of the common worker. Advocates see worker ownership as a practical way to reverse that trend, creating financial assets for those otherwise unable to claim a stake in the economy.
The support is broad, coming not just from socialists and liberals, but also conservatives, and this gives Marjorie Kelly, executive vice president of The Democracy Collaborative, a nonprofit that advocates worker ownership, cause for optimism.
“It’s really a healing idea,” says Ms. Kelly, the co-author of a new book, “The Making of a Democratic Economy.” “We don’t have to be at each other’s throats to build the kind of economy that will benefit all of us.”
Meet the new boss
Currently, worker-owned entities employ about 17 million people, or 12% of the U.S. workforce. Such business can take a variety of forms, from equity-sharing plans like those found at Publix super markets, Land O’Lakes, and King Arthur Flour, to more radical models, like at PV Squared. Not all of them are equally democratic.
By far the most common are employee stock ownership plans, or ESOPs, which offer tax advantages to businesses that adopt them. In an ESOP, shares are often allocated according to pay or seniority, giving some workers a larger stake than others. Members of ESOPs are typically able to vote on only a limited class of matters, such as a merger or a liquidation. According to the National Center for Employee Ownership, some 14.2 million workers participate in ESOPs.