Co-op values of openness, equality and equity raise questions about how to approach a fundamental part of work: pay. So how do different worker co-ops live their values on this?
Dalibo, a French tech co-op rooted in the free culture movement, has had a transparent pay system in place since its founding in 2005 – seven years before becoming a co-operative.
In a blog post on its website, Dalibo’s co-founders talk about the “double advantage” of pay transparency, which facilitates a climate of trust in the context of remote working, and simplifies salary management, at a time when the business had no managers or HR department.
In Dalibo’s early days, the team was small and consisted exclusively of tech workers who shared administrative duties. The team developed an internal git repository with free access to all workers’ pay slips.
As the business grew, Dalibo decided to incorporate as a scop (co-operative company) in order to ensure transparency, autonomy, and the involvement of workers in decision making, including around pay.
For managing co-director and HR director Virginie Jourdan, Dalibo’s transition to a co-op was an obvious choice, since the co-op values go hand in hand with the open source values of transparency and sharing. But, she says, the process of setting up the co-op and developing a formal pay scale was not an easy process.
One of the key challenges, says Laura Ricci, communications manager and co-owner at Dalibo, has been the need to balance the co-op’s financial health with what the worker members want; high expectations can lead to frustration.
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Since the co-op’s incorporation, worker members have been involved in setting Dalibo’s pay scales for all staff – around half of the workers are members, with the rest opting to do their jobs without the added responsibility of participating in the co-op’s governance.
The system seems to be paying off, with Dalibo’s lowest salary around 50% higher than France’s minimum wage, and interns paid above the legal requirement. There are clear pathways for all workers to become managers or directors, says Jourdan, with pay rising to reflect the responsibility. These decisions around the rates of pay have all been made collectively by members, using evolving governance structures.
“Dalibo is a permanent construction site, we are constantly adapting to the needs of the enterprise and its growth,” she adds.
Another organisation on a journey of evolution regarding its pay structure is the Mondragon Corporation, a federation of worker co-ops based in the Basque region of Spain.
When Mondragon was founded in 1956, an argument was put forward that all work deserves the same level of dignity and respect, and therefore the same pay. But Mondragon’s founders also wanted to incentivise workers and decided the co-op would not work if everyone was paid the same. It was agreed that instead, all workers would be paid a salary that enabled a decent standard of living, and that the ratio between the co-op’s lowest and highest paid workers would not exceed 1:3. This was increased in the 1970s to 1:4.5 along with the introduction of Mondragon’s private welfare system, and again in 1988 in response to tax reforms to 1:6.
The maximum ratio between Mondragon’s lowest and highest paid workers has remained at 1:6 since then. For comparison, research from the High Pay Centre estimated in 2023 that the lowest paid worker to median CEO across the FTSE 350 is around 1:165.
Mondragon is made up of autonomous co-ops, and the decisions on the pay ratio were made at General Assemblies of these co-ops.
Ander Etxeberria-Otadu, head of Mondragon’s outreach programme, says the pay scale strikes a balance between avoiding brain drain, and maintaining a sense of fairness.
“Most of the workers of our co-operative are not managers and they are not going to accept that a manager is going to have 20 times his or her salary”, he adds.
One way Mondragon remains a competitive recruiter is its ability to provide greater security, and job satisfaction to its workers, says Etxeberria-Otadu. “If one of our managers has a bad year, and the company is not going so good, this manager is not fired, they are moved to another department, to another co-operative. … So it is a steady job working with us.
“Then we also have something special working in a co-operative, and it is the feeling that I’m not working in a conventional company, in a big multinational, for the owner or the proprietor. No, I’m not working for that person. I’m working for me, for my colleagues and for the region, because we are creating a better society.”
For some co-ops, the most direct expression of solidarity when it comes to pay is simply to pay everyone the same. The UK’s Suma Wholefoods, Europe’s biggest equal pay co-op, has paid all workers the same hourly rate since it was founded in 1977 – and, says worker member Emilie Secker, “I sincerely doubt we’d ever stop.”
The co-op’s equal pay policy was one of the things that attracted her to Suma, knowing that all work is being valued the same.
“It supports multi-skilling,” says Secker, who has carried out around 10 different roles at the co-op. “If we have a week where loads of people are off sick in the warehouse, or our packing operation is really under pressure, they can put out a call and say, can you just come down and help for a bit … So it really supports us all mucking in together.”
But completely equal pay still presents challenges, she admits. “There’s certain roles we have that we pay extremely well for. There’s certain roles we pay below the market rate for. So in terms of attracting people, there’s risks around it. You know, why take on a more responsible role when all you get is a load of hassle and no additional reward?”
Andrew Hunter-Rossall, another Suma member, says one way the co-op has dealt with this is by training people up internally for a job that would typically be paid more.
Secker adds that, even though her role on the board comes with added responsibilities without higher pay, this can help ensure people in the role are doing it for the right reasons. “You have to want to do it, you have to be up for it.”
Hunter-Rossall explains that when surveyed, Suma workers report equal pay and co-operative ownership are the two things they value most about working for the co-op.
“There’s no feeling of inferiority, and so you feel like your voice is as important as everyone else. It certainly felt like that when I was working in the warehouse and in sales, there’s an equal opportunity to get your voice heard and have a say on major decisions.”
Secker says that Suma’s equal pay “really challenges the norm, even within the co-op sector, let alone external to that. And certainly when I tell anyone outside Suma about it, they just cannot get their heads around it.”
Hunter-Rossall agrees that equal pay is a radical position, but one that won’t be leaving Suma any time soon. “When you look at the pay ratios in some companies, they’re quite shocking. I think the campaign for lower pay ratios will grow and grow.
“Actually going all the way to equality is quite a radical thing. And you know, we’ve had that since we started in the ’70s, so it’s easy for us to keep it going – there’d be a riot if we suggested changing it!”
