Economic Update: The Worker Co-Op Alternative

Podcast: Economic Update with Richard D. Wolff
Date: May 11, 2015
Host: Richard D. Wolff
Guest (interview): Yochai Gal

Episode Overview

In this episode, Richard D. Wolff explores the economic challenges faced by working people today and highlights systemic issues within our economic and political systems. The central focus is on worker cooperatives as viable and empowering alternatives to traditional capitalist business models. The second half of the show features an in-depth discussion with Yochai Gal, a founding member of tech worker co-ops in San Francisco and Boston, about the practicalities, successes, and lived realities of employee-owned businesses.

Key Discussion Points & Insights

1. Economic and Political Updates (00:02 – 27:43)

The Illusive Economic Recovery

• Recent Bureau of Labor Statistics data shows disappointing job creation numbers, with “recovery” doing little for most Americans outside the wealthiest 5%.
  • Quote: “Recovery really applies to the top 5%, the American people and the biggest corporations, and pretty much has bypassed everybody else.” (03:26)
• Signs of sluggish economic progress raise broader concerns about growing inequality and a system not working for the majority.

Domestic Workers’ Rights (05:15)

• Massachusetts becomes the fourth state to enact a bill of rights for domestic workers, granting them minimum wage, vacation, and other standard labor protections.
  • Quote: “It has been a scandal for generations… how such people are treated.” (05:53)
• Other states with similar laws: California, New York, Hawaii.

Money in Politics (07:29)

• Senator Ted Cruz boasts $31 million in campaign funds, exemplifying the dependence of politics on big donors, mainly from large businesses and wealthy individuals.
• Wolff emphasizes the systemic barrier this creates for ordinary people and small businesses to participate meaningfully in politics.
  • Quote: “Our political system is tilted in favor of those who have the most money and the least organizational difficulty…” (11:38)

SNAP/Food Stamp Restrictions in Missouri (16:59)

• Missouri’s proposal to limit food stamp use, prohibiting recipients from buying items like cookies, chips, seafood, or steak.
  • Quote: “Words fail me… We are portraying these people now not as the victims of a system that fails to provide them with adequate jobs… but we're saying that the system isn't at fault. It's them.” (18:13)
• Wolff criticizes the trend of blaming victims rather than addressing systemic failures.

California Drought and Planning (22:34)

• Wolff counters arguments blaming environmentalists for California’s drought, highlighting instead the dangers of leaving natural resource management to private enterprises focused on profit.
  • Quote: “It is a man made catastrophe… an economic system catastrophe. The lesson to be learned here is you cannot allow private profit to be the decision determinant…” (25:23)
• Argues for rational, democratic planning to handle limited resources and provide full employment.

Medical-Industrial Complex Atrocities (26:34)

• Recounts a historical case where U.S. health institutions and government experimented on Guatemalans, stressing the dangers of an unaccountable alliance in the healthcare sector.

2. Interview: The Worker Co-Op Experience with Yochai Gal (27:44 – 55:41)

Beginnings and Structure of Tech Collectives (27:56)

• Yochai Gal describes founding both San Francisco and Boston branches of the Tech Collective IT worker co-ops.
  • Started in San Francisco (opened 2007), expanded to Boston in 2011. Both are financially independent but closely linked.

What Does Tech Collective Do? (30:28)

• Provides hardware/computer repair (like Geek Squad, but with better ratings and lower prices), data recovery, and IT/business support to small businesses.

Viability and Success of Worker Co-Ops (32:03)

• San Francisco branch: debt-free, high wages ($30+/hr for business support), excellent benefits, highest-rated IT company in the Bay Area on Yelp.
  • Quote: “They pay themselves very well. They get 100% paid by the company… They are overwhelmingly successful.” (32:35)
• Boston branch: newer, still paying off startup loan, but pays decent wages and is highly rated.
• Wage differences based on job roles; “we don’t have equal wages for everybody” but aim for fairness and competitiveness. (33:51)
  • Boston target: $20/hr now, aiming for $30/hr within three years.

Why Co-Ops Succeed—Beyond Money (37:25)

• Real-world examples like Arizmendi Bakery and Cheese Board (Bay Area food co-ops): high wages, excellent benefits, perks like shared vacation cabins.
• Emotional/psychological well-being, a sense of agency, and support are major advantages.
  • Quote: “The benefits are not just financial… they’re related to how you feel as a human…” (38:54)
• Reduced anxiety about calling in sick, genuine investment in business success, and sharing creative ideas.

Worker Motivation & Concerns About “Free Riders” (42:02)

• Wolff raises a common American skepticism: how do co-ops handle “free-riders” or lazy co-workers?
  • Gal: This is not unique to co-ops—“it’s not like that doesn’t happen in regular businesses.” (43:08)
  • Co-ops have democratic processes: regular reviews, support plans, and clear (but humane) processes for discipline or firing if necessary.
  • Quote: “People aren’t born ready to work at co-ops. They’re shaped by the American capitalist industry… so a lot of us have to learn.” (47:08)
• No co-op member has ever been fired after passing the membership trial period in the Boston branch.

Democratic Decision-Making in Practice (48:34)

• Monthly membership meetings with open agendas and facilitated discussion.
  • “We have what's called modified consensus… If there's a disagreement, we vote…” (49:18)
• Major decisions (e.g. wage increases, salary structure changes) are discussed and voted on after designated research/proposal.
  • Quote: “It's not that hard to run a business… If you have one or two people responsible for getting that information and… training everyone else… you can make good democratic decisions without having any background in business or finance…” (50:25)

Financing Co-Ops (51:07)

• More difficult for co-ops to incorporate or access mainstream funding; often rely on special co-op funds and must personally guarantee loans.
  • Boston branch received a $70,000 line of credit from the Cooperative Fund of New England.
  • Other resources: North Country Cooperative Fund, US Federation of Worker Cooperatives, and even the Small Business Administration now (recent change).
  • Quote: “It's the same issue as it would be for anyone who isn't a worker co-op. It's difficult to get finance… but there are a few organizations… willing to work with us.” (52:47)

Culture Change and Learning Democracy (47:08/53:54)

• Participating in a worker co-op is “an experience you relish, you enjoy and you advocate for others.”
  • Gal credits it with personal and professional growth, community, and resilience.

Notable Quotes & Memorable Moments

• “[Worker co-ops] aren’t just about money… They’re related to how you feel as a human, that you feel as an individual.” – Yochai Gal (38:54)
• “Our political system is tilted in favor of those who have the most money and the least organizational difficulty…” – Richard Wolff (11:38)
• “It's not that hard to run a business… If you have one or two people responsible for getting that information and basically training everyone else… you can make good democratic decisions…” – Yochai Gal (50:25)
• “People aren’t born ready to work at co-ops. They’re shaped by the American capitalist industry… so a lot of us have to learn.” – Yochai Gal (47:08)
• “Recovery really applies to the top 5%, the American people and the biggest corporations, and pretty much has bypassed everybody else.” – Richard Wolff (03:26)
• “We are portraying these people now not as the victims of a system that fails… but we're saying that the system isn't at fault. It's them.” – Richard Wolff (18:13)
• “It is a man-made catastrophe… an economic system catastrophe.” – Richard Wolff on California's drought (25:23)

Timestamps for Key Segments

• 00:02 – Opening; economic updates; job growth & inequality
• 05:15 – Domestic workers’ rights in Massachusetts
• 07:29 – Money in US politics; Ted Cruz Super PACs
• 16:59 – SNAP/food stamp restrictions and social stigma
• 22:34 – California drought & capitalism’s planning failures
• 26:34 – Medical-industrial complex atrocity: 1940s-50s US medical experiments in Guatemala
• 27:44 – Start of interview: Yochai Gal introduction
• 30:28 – What the Tech Collectives do; their services
• 32:03 – Financial viability, wages, and business growth
• 37:25 – Worker co-op success stories in the Bay Area
• 42:02 – Handling “free riders” and workplace discipline
• 48:34 – Democratic decision-making processes
• 51:07 – Financing and startup challenges for co-ops
• 53:54 – Closing thoughts: co-ops as rewarding, viable alternatives

Conclusion

This episode combines a frank critique of America's economic and political inequalities with constructive, practical insights into the worker-owned cooperative model. Through both research and the lived experience of guest Yochai Gal, the show asserts that worker co-ops not only provide real economic security and democracy but also foster workplace satisfaction, creativity, and empowerment. Practical challenges exist—especially around financing and cultural adaptation—but they are being addressed, and success stories like Tech Collective and Arizmendi Bakery offer inspiration and evidence for a more democratic economy.