Why Canada needs a law that gives workers the right to govern their workplace

Canada Standard

2 days ago

A major fault line in contemporary society is that while our political lives are governed by democratic principles, our economic lives largely are not.
At the height of the COVID-19 pandemic, for example, Maple Leaf Foods experienced an outbreak in its Brandon, Man. factory. Not only were workers ordered to keep working in unsafe conditions, they were forced to work overtime.
Walmart has long been accused of forbidding its cashiers from sitting down, even during long shifts.
At one of its warehouses in Pennsylvania, Amazon allowed the temperature to reach an unbearable 102 F in 2011. When employees pleaded to open the loading doors to let in fresh air, management refused, claiming this would lead to employee theft. Instead, Amazon parked ambulances outside and waited for employees to collapse from heat stroke. Employees who were sent home because of the heat were given demerits for missing work, and fired if they accumulated too many.
These examples reflect the fact that, in most workplaces, employees have no say in who manages them or how major decisions are made. Entering the workplace typically means leaving the freedoms of democratic society behind and entering a private domain unilaterally controlled by an employer. For most workers who are not in senior management, the main job of every job is to follow orders. Functionally speaking, workers are servants.
In its governance structure, the modern workplace operates as a kind of mini dictatorship. Although workplace discipline isn't enforced with physical violence, supervisors still have the power to discipline or punish those who dissent.
But what if there were an actual legal right to workplace democracy?
My research scrutinized the pros and cons of such novel legislation by drawing on decades of research comparing conventional, top-down firms with democratic worker co-operatives (where workers collectively own the firm and elect the governing board).
In large American firms, the average CEO-to-worker pay ratio is now a jaw-dropping 351 to one. As CEO, Jeff Bezos made roughly 360,000 times more than Amazon's minimum wage workers. This inequality ripples across society with significant consequences.
By contrast, most worker co-ops maintain a pay ratio of three to one and only very rarely exceed 10 to one.
There's also a stark difference in how workers are treated. While conventional firms lay off workers whenever it's profitable to do so, co-ops do everything in their power to save jobs.
Top-down decision-making also breeds degradation and disrespect. A 2016 Oxfam report, for instance, documented how some Tyson Foods employees were prevented from using the bathroom to the point where some urinated themselves and other felt compelled to wear diapers to work.
A Gallup survey from 2021 found that across the American economy as a whole, only 20 per cent of workers strongly agreed with the statement that "my opinions seem to count."
In co-ops, workers are generally treated with more respect and dignity. They typically participate more in decision-making, have higher job satisfaction and have less antagonism with management.
In conventional workplaces, many employees hate or fear their boss. Roughly 17 per cent of the workforce opt for self-employment in order to get away from the tyranny of the boss, even though self-employed workers typically earn about 15 per cent less than their salaried counterparts and receive less than half the benefits.
Worker co-operatives are typically less dominating than conventional firms because workers elect their managers and can create self-managing teams where workers have more autonomy over matters like scheduling and how tasks are carried out. Though co-ops are far from perfect, with workers often feeling that they aren't able to participate in decision-making as much as they would like.
Most workers have no viable alternative to undemocratic work, and so no choice but to suffer its harms. While in theory, workers can quit and rely on welfare or social assistance, in practice, this isn't viable because welfare rates are often too low to live on.
Starting a business or becoming self-employed is another theoretical option, but it's too financially risky to be a serious alternative for most.
Joining a worker co-operative is the most promising alternative, but there were less than 400 worker co-ops in Canada in 2022, representing less than one per cent of employment.
Converting an existing workplace into a co-op faces serious barriers too. Even if the workers desperately want a conversion, if the employer doesn't, they're out of luck; their employer owns the organization and can simply say no.
Canada needs a new law to expand democracy by granting workers the legal right to collectively buy into the firms they work for. The process would resemble how unionization works today.
It would start after a majority of employees sign a declaration stating their intent to form a worker co-operative. After this threshold is reached, a formal process would be triggered: employers would be required to disclose all relevant financial documents with the workers, and workers would receive education on the managerial, technical and legal requirements of co-ops. Co-op development bankers would provide loans and financing options.
Once this is done, workers would hold a final vote. If a simple majority (50 per cent plus one) votes in favour, the employer would be paid the fair market value for the firm and the business would be restructured as a worker co-operative.
Importantly, the law would allow this transition even if the employer is opposed, just as collective bargaining legislation allows workers to unionize without employer approval. It would also ensure owners are fairly compensated; owners shouldn't lose their property, but they should lose the right to unilaterally govern other human beings in perpetuity, especially when those others are willing and ready to govern themselves.
Of course, this law might bring some economic disruption. It's possible that certain owners might oppose democratic ownership so strongly that they would rather shut down the business altogether than work as equals, but such cases would likely be rare.
On the other hand, research shows that worker co-ops are just as productive as conventional firms (if not more so) and they have similar survival rates. This is highly reassuring for the overall well-being of the economy.
Moreover, workers would need to invest significant amounts of their own money in order to buy out the firm, so conversions will occur only after serious consideration.
The bottom line is that while the costs of this legislation would likely be modest, the benefits to workers and society at large would be substantial: reduced inequality and domination, increased job security and respect. Canada should establish a right to buy-in as soon as possible.