← Economic Update with Richard D. Wolff
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- [00:01]
A
Welcome friends to Economic Update Extra. This is the moment when we continue an interview from the regular Economic Update program. But in recognition and appreciation to our Patreon community of support, we want to provide this extra to you just as you've gone an extra step in supporting us. So Matthias, let me continue. One of the things I know has interested many folks in wondering about worker co ops of the sort that you've constructed is how you deal with one or two kinds of big problems that are in a lot of people's minds. The first one is how do you get the money to run such an operation? How do you get the money to grow? Are you in a position to get the loans and financial supports that regular capitalist enterprises do? Or, or do you have difficulty? And if so, how have you managed to get access to capital?
- [01:04]
B
Yeah, capitalization I think is a problem for any business, big or small. And I think it's for worker co ops even more of a problem because I think lending, business lending especially is geared towards traditionally structured companies. And so this was a real challenge. But luckily with the growth of worker co ops, what we're seeing is these, what they call CDFIs or community development Financial institutions. And essentially right down there where it says FDIC approved, it'll say CDFI certified. We worked with two of these organizations with leaf, the Local Enterprise Assistance Fund, and with the Beneficial State bank which was founded in reaction to the recent Great Recession and the excesses we saw in banking there. And they worked with us very closely and that's how we were able to capitalize so that we could take on the larger projects and facilitate the growth of Mattis.
- [01:56]
A
So the bottom line is there is financing available for the worker co op kind of business and glib dismissals of it as though it was impossible to get the money that any business needs. Those are not true. I mean, in fact you were able to do that.
- [02:12]
B
Oh, and when you approach LEAF or the beneficial bank, the State bank, they are so happy to hear that you're a worker co op because that's who they want to work with. And that's a very exciting development.
- [02:23]
A
Yes, and very important to the long term growth of this idea. The next big question that is often thrown at worker co ops is two parts. One, does everybody get paid the same? And if so, does that work? And so could you answer both of those? Does everybody get paid the same? For example, in your Metis corporation, your Metis worker co op, and, and if not, since I've heard you talk about this, how do you handle that?
- [02:55]
B
You Know, we're like any other company. We have to compete for good, qualified staff. So in terms of your wages, people's compensation is based on their skill level, it's based on how productive they are, and it's based on experience. And so that enables us to attract a really quality staff.
- [03:16]
A
You pay more in wages to some than you do to others?
- [03:20]
B
Without question.
- [03:21]
A
So it's not an egalitarian wage system.
- [03:24]
B
The wage system is not egalitarian. People are not there out of the goodness of their heart just because they feel good about being part of a worker co op necessarily. They're there because it makes good sense for them to be there. So, yeah, the wages are not totally egalitarian. But when we turn to profit sharing, an hour worked at Metis, whether it's worked by a laborer or by a project manager, is compensated at the same level. So at the end of the year, we look at the total labor hours that were worked and then profits are divided up based on that.
- [03:56]
A
So it's an egalitarian distribution of profits, but not an egalitarian payment of wages for work.
- [04:03]
B
Exactly.
- [04:04]
A
So it's real democratic, egalitarian profit sharing.
- [04:08]
B
Yes, exactly.
- [04:10]
A
I think that's a very important point to get clear in people's minds as they think about this. In the regular part of our program, when we came to discussing why you did that, you mentioned your values, your feeling of what the society needs as having shaped your desire to do this. I would like to hear more from you because I find the most exciting thing about worker co ops to be how they can help change the whole society in a democratic direction, in a direction of treating people with respect and equality that we give lip service to, but mostly in our economic arrangements. Do not honor that you're trying to do that. So I'd like to hear how these social goals, how these philosophical commitments played a role for you and for the others in doing this.
- [05:04]
B
Well, you know, if you're at all of the opinion that the disparity in wealth in the United States, the growing rift between the wealthy and the poor is an issue for concern, is something that has contributed to the erosion of civil society and today to the rise of the radical right. And I don't think it takes a lot of analysis to conclude that distributing profit among a broader group of people is a good thing. I think, you know, any conversion from individual ownership to worker ownership is a step towards more. More equitable distribution of wealth in society. And so I do think that worker co ops are a small step in addressing what is a tremendous problem that we currently confront.
- [05:47]
A
Yeah, I remember my visit to Mondragon in Spain where they have arguably the biggest and most successful of these worker co op managements that even the first hour of being driven around this little medium sized city of Mondragon where its base is, you right away understood you were in a very different place because there weren't people lying in doorways, there weren't homeless people, there weren't beggars. And sure enough, we discovered that one of Mondragon's rules is the highest paid worker can't get more than 8 1/2 times what the lowest paid worker does. And, and here was that a direct attack on inequality? The ratio for a corporate executive to an average worker in the United States is 300 to one, not eight and a half to one. So you right away say you want to do something about unemployment, excuse me, about inequality. Here, here's a way.
- [06:44]
B
Yeah, at Metis we're at right, about three to one from the highest paid.
- [06:48]
A
Person to the lowest, even narrower range. Yeah, of course. Are there other companies in Seattle that have been followed your model, followed your example? Do you get inquiries from other people about doing this sort of thing? What kind of effect in the broader community has your success as a worker co op brought to you?
- [07:13]
B
You know, I don't know that I would say that they followed our example, but we certainly received lots of questions and, and it feels like there is a growing movement in this direction I can think of in that area alone. There's Bellingingham Bay Builders, A1 Builders, the Northwest Construction Co Op, Black Cat Construction Co Op. There's a good number those are functioning.
- [07:37]
A
In the greater Seattle area and they're.
- [07:39]
B
All fairly recent, all I'd say in the last 10 years or so. And we ourselves are modeling the South Mountain Co Op which is in Martha's Vineyard and John Abrams built that company. It's a fantastic company and has really helped us. But definitely there does seem to be a growing wave and we've worked with groups that have been trying to start some coffee collectives, coffee co ops, things like that. So just offering advice, this is how we've done it. Just so that we all learn from each other's example.
- [08:08]
A
Okay, if people have been asking you questions for our viewers, for our listeners, how do they contact you to ask questions? If you're willing to deal with them?
- [08:20]
B
Email works great. Matthiasatisconstructioninc.com or just going to our website, mattisconstructioninc.com you have to include the ink mattisconstructioninc.com there's contact information there. So I'm always happy to take the time to sit down with folks and talk through how we've done what we've done.
- [08:39]
A
Well, you know, on behalf of all of the co ops that also contact us, I want to thank you for coming. I want to thank you for doing what you've done. I want to thank you for staying with it for 10 years, which clearly you have done. And whether you want it or not, you are a model. And through, hopefully through our program, you'll become more of such a model so that people will see the benefits of it, but also, as I feel very strongly, the social benefit. I mean, you have to justify any economic system in part what it contributes to the larger society. And if it doesn't contribute democracy and equality and liberty and all those values we claim to hold dear, well, that's a prima facie case that you ought to be looking for other systems of organizing things. So thank you very much, Matthias. Thanks for having me wish you everybody every success. And to all of you, I hope you have found the value of a concrete conversation with somebody involved now for a long time in a worker co op, having formed one, having chosen not to stay with the capitalist model, but to move forward and go beyond capitalism in this area. But you can see that there's a movement here of companies, of co ops, but of society as a whole in a direction that ought to make you feel better than you might otherwise. If you're captured, as so many of us are, by the headlines about moving to the right. Yeah, but there's other kinds of movements going on, perhaps a little bit below the radar, but as you've seen today, just as important and in the long run, probably more so. Thank you very much for joining us and I look forward to speaking with you again next week.