The Essential Role of Co-operatives in the Future of Work

The Essential Role of Co-operatives in the Future of Work

The theme of this year’s International Day of Co-operatives (6 July 2019) is COOPS 4 DECENT WORK. How are co-operatives responding to the world of work challenges? The International Cooperative Alliance (ICA) is shouting out the message that co-ops are people-centred enterprises characterised by democratic control that prioritise human development and social justice within the workplace.

Through #CoopsDay, local, national and global policy-makers, civil-society organisations and the public in general can learn how co-operatives, which currently employ over 280 million people (and almost 10% of the global workforce), contribute to a decent working environment, job stability and social sustainability.

The International Labour Organization (ILO), founded in 1919, recognises the importance of co-operatives given its mandate towards achieving social justice globally. It is the only specialised agency of the UN with an explicit mandate on co-operatives which is reflected in its constitution. Part of this mandate has been to produce the Global Commission on the Future of Work’s Report which was launched in Geneva on 22 January 2019.


What does the report say about co-operatives?

The report of the Commission outlined the steps needed to achieve a future of work that provides sustainable economic growth, full and productive employment, and decent work opportunities and conditions, in line with UN Sustainable Development Goal No. 8: Decent Work and Economic Growth. It calls for a new, human-centred approach that allows everyone to thrive in a carbon-neutral, digital age and affords them dignity, security and equal opportunity. The report mentions co-operatives on two issues:

  • Gender equality (UN SDG No. 5) whereby co-ops have a strong record over the past 150 plus years in supporting women’s voice, representation and leadership.
  • Improving the situation of workers in the informal economy (i.e. businesses and enterprises that are not regulated or protected by the state) through the emergence of worker co-ops.

The report also notes the need to explore innovative measures that require enterprises to account for the impact of their activities on the environment and on the communities in which they operate.

It’s great to see many of NZ’s larger co-ops now producing annual sustainability reports outlining progress that they have driven towards achieving environmental and social sustainability locally.

These are commercially driven businesses that have given back generously along the way to local communities and those on need across NZ, and will continue to do so.

In addition, and even more impressively, our government (MFAT) has recently drafted a report for the UN titled: “NZ’s progress towards the SDG’s 2019”.

Here in NZ, our co-ops and mutuals employ more than 50,000 people which equates to around 2% of our workforce, well below the global average of 9.5%.    Of note, however, our co-op sector currently generates around 16% of our GDP, one of the highest figures in the world.

This shows the reliance of NZ’s economy on our agri-producer sector which has a predominance of large co-ops. While many of our country’s future-of-work challenges are shared with other nations, some of our socio-economic differences impact upon our work challenges. These include: our wealth compared to many deprived countries where co-ops are abundant; our size (small local market) resulting in the need to export; our geographic remoteness (higher cost to get product to market); our relatively high labour costs; and low levels of productivity compared to other OECD countries.

What is happening throughout the world and locally?

There is growing interest in economic models based on co-operation, mutualism and solidarity. The report of the Global Commission provides an opportunity to reflect upon how co-operatives can contribute to creating a brighter future and deliver economic security, equal opportunity and social justice.

Key issues highlighted in the report include:

  • lifelong learning;
  • youth employment;
  • gender equality;
  • new forms of work;
  • aged care economy;
  • rural and informal economies;
  • and technological and environmental changes.

In terms of lifelong learning, co-operatives provide education and training for their members in order to contribute effectively to the development of their businesses. The fifth Rochdale principleEducation, Training and Information, focuses on co-operatives engaging in education activities not only for their members, but also young people and the community at large towards mutualism, self-help and collaboration.

On youth employment, each year close to 40 million people enter the labour market globally. Co-operatives can help young people to find work and gain work experience. They can offer opportunities for professional and vocational training. The collaborative approach of working together, sharing risks and responsibilities in co-operatives can also be appealing for many young people including Kiwi school leavers.

One of our Cooperative Business NZ Full Members, Loomio, is an excellent example here.

This is a small tech software provider 100% owned by its staff, established seven years ago, based in Wellington, and with clients throughout the world.

Faced with the prospect of losing jobs due to enterprise failures during economic crises and subsequent transitions, workers in firms with economic potential can buy out and transform the firms into worker-owned enterprises. A move towards a worker co-operative could also be attributable to the retirement of ageing owners, where there is no clear plan for the future of the enterprise.

With the ageing population, co-operative ownership of services such as housing, leisure and care enables senior members to control decisions and lead more independent lives. Co-operatives play a complementary role to local and national governments in providing improved care services in childcare, ageing, disability, reproductive and mental health, post-trauma care, and rehabilitation and prevention, while meeting the needs and aspirations of their members and communities. Compared to other ownership models, they tend to provide better wages and benefits to workers.

Women’s unemployment rates remain high, and higher than men’s in most parts of the world with persisting gender wage gaps across the board. Fewer than one-third of managers are women, although they are often likely to be better educated than men. Women have opted to come together through co-operatives to improve their livelihoods, enhance their access to goods, markets and services, and improve their collective voice and negotiation power. Co-operatives have a critical role to play in lifting constraints to women’s participation in the world of work by promoting equality of opportunity and treatment, including through pay equity and the provision of care, transport, and financial services.

Climate change concerns are affecting the world of work in various ways. Green jobs and green enterprises are on the rise. Co-operatives can be instrumental in ensuring a just transition while working on climate change adaptation and mitigation. Mutual insurance for crops, diversification of crops, energy saving irrigation and construction techniques are a few adaptation strategies co-operatives can use. Prominent examples in mitigation include forestry and renewable energy co-operatives.

Here in NZ, our co-ops contribute significantly in terms of driving environmental sustainability locally. This includes: fencing to keep livestock out of rivers and waterways; improved on-farm systems in the treatment and discharge of effluent; reduction in on-farm carbon emissions; reduction in the burning of fossil fuels; more efficient use of energy; the emergence of “clean” energy in the form of solar and wind power; introduction of electric delivery vehicles; recycling and reduction in the use of plastic packaging; banning of single-use plastic bags (from today across NZ); and more responsible consumption, including educating consumers on how best to reduce food wastage. Foodstuffs North Island’s announcement two months ago that it would allow customers to bring plastic containers from home into their supermarkets to further reduce plastic waste is a good example of the innovation and urgency being shown.

A large portion of co-operatives globally are found in rural areas where they have become a significant source of employment. They are recognised as playing a key role in the transition from the informal to the formal economy. Co-operatives can provide better working conditions, including adequate hours of work, social protection and safe and healthy workplaces for their members and workers.

NZ’s social issues include housing, education and the rapid emergence of methamphetamine (P) and other harmful drugs. How can co-ops help?

One solution is co-operative housing which has proven very successful overseas since the end of WW2, in particular in Europe, USA and Canada, and offers affordability, liveability and scale. Under co-op housing models, tenants would need to meet certain socio-economic criteria and would either pay rent to own over a long term (25 plus years), or rent to occupy (no equity ownership). Home ownership would not involve owning the land that the dwelling (stand-alone or unit) sits upon thereby improving affordability significantly. Instead the land would be leased at favourable terms in terms of land valuation and longevity of the lease.

Tenants share common facilities such as kitchens and dining lounges lowering the construction costs further. Under rent-to-occupy, tenants buy shares as co-op housing members in the development which gives them the right to occupy. Members pay monthly fees to cover maintenance costs and participate in decision-making around building management by having representatives that sit on the housing co-op board, otherwise via a tenants’ association. To ensure that such co-ops remain affordable, shares have restricted re-sale values and members must also meet income criteria.

Overseas surveys have shown that there is less crime and fewer drugs than in surrounding neighbourhoods, while housing satisfaction is higher and members are more likely to be engaged in civic and community events. Those unemployed have also been involved in the construction of these homes, learning new skills and, in some cases, becoming qualified builders and tradesmen, reducing unemployment. This satisfies many social needs, and in particular, putting roofs over heads which is a particular problem in Auckland with its current shortfall of over 40,000 homes, and a construction rate that is only meeting around half of annual demand.

For more information on co-op housing here in NZ please refer to my article: Co-operatives can alleviate the Auckland housing crisis. 

Craig Presland

CEO, Cooperative Business NZ

1st July 2019.