Updated: Jan 30
A massive shift is happening in the workplace fueled by generational differences in attitudes to life accompanied by a complete redesign of the workplace/office and of how and why we work.
Millennials, and others - myself included (52 years old), are pretty dedicated to having “work/life balance”. We don’t intend to hit our death bed having lived for work and regretting it.
But with that also comes a deep desire to do work we are passionate about. Some of the older generation, dare I say "Baby Boomers" without meaning all of them, are shaking their heads in disbelief as they watch the exodus from boring, work-mainly-for-money, profit-driven jobs and companies. They wonder how we don’t understand that we have to work because that’s the responsible thing to do. They are missing the point. The point is we value quality of life over quantity of money and if necessary we are willing to live more simply to have it.
Of course, there’s another force behind this move: climate change. Baby boomers may have been responsible to their bank accounts, but the effects of unbridled consumerism are bringing us to the brink of disaster. We care about that too.
So what are people looking for in their work these days? What will motivate us to bring our skills and talents to the job at hand?
First, we want our work to have a larger purpose and meaning than paying the bills and doing what’s expected. We seek companies that care about people and the planet and that add to the well-being of both. We want to be a part of sustainable, conscious businesses.
Second many of us want a stake in the company we are building and creating. Money isn’t enough. We want ownership. Enter the WORKER COOPERATIVE combined with sustainable, conscious business practices.
WHAT IS A WORKER COOPERATIVE?
Most simply put a worker cooperative is a company that is owned and managed by its workers who are usually shareholders. There are no outside shareholders. The cooperative itself can be managed in several ways. Either the worker/owners all make decisions together, the worker/owners elect managers from amongst themselves, or a hybrid of these two can be created.
It sounds great in theory but are worker cooperatives practical? If so how do we start a worker cooperative, how do we determine pay scales and how do we make decisions?
The following case study telling the amazing story of Tui Balms, a workers' co-operative at the end of a narrow windy road in Golden Bay, New Zealand, population only 5,000 offers us insight and answers to these common questions.
TUI BALMS: A WORKER COOPERATIVE CASE STUDY
At the top of the south island in New Zealand is Tui Community - the home of “Tui Balms”. The residents of Tui Community have been producing a range of massage balms and other ecological, organic products using almost all locally produced ingredients since 1984.
Tui Balms products are sold in local and regional stores, online through Healthpost and are franchised in the UK. But Tui Balms is more than just a successful business, it’s also a sustainable business, a charitable trust and a worker run cooperative.
As recounted by Robina McCurdy, founding member of the community and the permaculture design tutor in our ten week sustainable living course, Tui Balms started in 1984 in the early days of the community. At the time it was called Sun Hillow Bee Balm. Initially everyone worked voluntarily making only one product: bee balm.
They worked in the late evening after cooking hours in the large communal kitchen. Pack out happened in a sheep shearing shed, and the “office” was just a room in the community house. The balm was distributed only in Golden Bay and nearby Nelson.
Over time more products were developed and added to the range by community members who experimented with the properties of various essentials oils that could be added to the bee balm. One in particular, Djaa, created a range of new products the formulas for which Tui Balms purchased upon her departure from Tui. It was a community effort though as the whole community helped with continued product testing and reported back on how it affected different people: potency, sensitive skin, in the sun etc.
By the 1990’s it was realized that Tui Balms was going to be a significant business and a new special building was added on the flat lands in 2000. In 2018, workers decided it would advantageous if they could officially claim the healing properties of the products, so the space was doubled and upgraded to meet codes. Tui Balm products are now pharmaceutical grade meaning simply that they can now claim that the products have healing properties. It does not mean that they contain chemical additives or have side effects both of which are often associated with the word “pharmaceutical”.
WHAT IS THE COOPERATIVE WORK MODEL AT TUI BALMS (TB)?
Tui Balms operates with minimal management hierarchies and a flat wage structure that values participation in the business, rather than creating premiums for personal skills. Decision-making within the co-operative is generally by consensus on all important matters. Consequently, every staff member’s contribution to the business is seen as equally important.
Twelve to fourteen people from Tui Community are employed providing much needed paid work in this remote area. The residents of Tui and Golden Bay in general tend to be highly skilled people who enjoy doing a variety of work and have compelling hobbies and passtimes. In terms of work/life balance, TB is a dream. No one works more than 30 hours and most work less.
Tui residents prefer to spend time growing their own food, exploring interests and running other educational components such as the Tracks and Tides programme rather than putting all their time and attention to one main job for 40+ hours a week.
This principle was adhered to even when TB was approached by corporations in China to produce for them. Such a production level would have meant temptingly huge profits, but working people around the clock. They turned it down flat, because quality of life is held to be more important.
This company is truly remarkable in many ways. Not the least of which is that it goes beyond being a worker-owned cooperative. It is also a charitable cooperative run under Tui Spiritual & Educational Trust. The contributions/profits are dispersed to local charitable institutions and distributed with no tax paid. Meaning all profit is donated. To date, over $400,000 have been put back into the local community. How’s that for meaning and purpose? A company that devotes all its profits to helping fund local community projects!
HOW TO DETERMINE WAGES IN A WORKER COOPERATIVE
Originally working for Tui Balms was part of the overall community energy input system (free hours). It did make labour and motivation to expand difficult so TB started paying $5/hour. Then went to $10/hour. The company has evolved from having lots of labour capital and no money to having money capital, Hence, current pay starts at close to the Living Wage around $20/hour.
The founding manager, Colin, was a very vocal socialist who stood by his principles. He promoted the model of Mondragon in Spain where top paid workers are limited to earning a maximum of 7 times the lowest wage. Upon his death, the structure moved to be even more egalitarian and no one can make more than four times more than anyone else.
New workers spend 2-3 months training at entry wage or until they are voted in as full members at a co-op meeting. Wages are set on the basis of job descriptions which is fairly standard practice in any business. Base rates are paid for labelling, production, marketing, routine office work, stock ordering, data entry, & low level accounting with incrementally higher wages paid for managerial hours, although the manager is usually not only a manager.
The cap of only paying up to four times more to the highest wage earner is not the only difference between this cooperative and mainstream practice. Where the TB system departs even further is with allocating a set number of hours for managerial work which are then distributed amongst a number of different people who also work in other areas which allows workers to feel greater ownership and control of the business. What’s more, all big decisions are made by group consensus of all workers not by managers.
In addition there is a central manager who proposes the business direction, cash flows, policy, and runs meetings. The central manager works more managerial hours which are paid at $6-$7 above the base rate. The wage scale and distribution of managerial work hours helps TB meet its goal of keeping management and workers close. It’s also worth noting that at TB it’s not uncommon to see managers doing cleaning tasks alongside everyone else!
Tui Balms attempts to hire only from Tui Community as part of the mandate of the company is to provide work for community members. It can be challenging to find and retain people with such a small pool to choose from. Hence despite the dynamic workplace and egalitarian approach, there is still a need to incentivise people to stay. A five year scale is used to accord raises where each year of work brings a 2% pay raise. Soon TB will move to a ten year scale to increase motivation for people to stay longer. Although efforts are made to try to get staff from Tui Community only, the near future is bringing expansion and TB will be looking in the wider community to fill the need for more workers. This is actually great news for Golden Bay residents where steady employment can be hard to find.
TOP TIPS FOR STARTING A WORKER COOPERATIVE
The advantages of working at Tui Balms worker cooperative are numerous:
Fewer working hours
Higher than average pay rate
Inclusion in decision-making
Being valued as an equal
Flexible working hours
One might be tempted to think there is never trouble in paradise. However, it’s the mess around the edges of things that can cause problems if not handled correctly. I asked former manager, Keith Orr, what his top three tips for starting a worker owned cooperative would be. His response:
Get a really good written constitution right from the start covering remuneration, operations etc.
Stress a sense of egalitarianism. It’s about working together and not letting some people’s situations get too split from another's.
Be nice to each other
He pointed out that excluding people is so often what creates relationship dramas that can drain the energy from a venture and ultimately even lead to its demise. So upfront agreements, clear communication, and shared responsibility are essential for keeping workers empowered and feeling included.
When I asked Keith what challenges came of the model, he shared that from a managerial perspective often individuals were considered more important than the business which, of course, puts pressure on the managers to be able to keep things going.
During his tenure, he still saw, surprisingly in my opinion, a tendency for workers to continue to see things in the old way with a “That’s not my job.” attitude. So spreading the sense of responsibility is crucial. He feels that TB has somewhat succeeded, but still some begin on a base rate and are happy to just do their job and that’s it.
It’s not a perfect system but then very few if any are. What’s important perhaps is the journey and our willingness to try new things and adapt to the changing needs of people. The worker run cooperative model has and does offer hope of a more conscious, more sustainable way of working.
Please like and comment on this blog. What would your biggest concern be about working in a worker cooperative?