8. When employees own the businesses and means of production

Chapter 8:  Third option: Democracy and production incentives in every workplace



Nonprofits employ nearly 56 million full-time equivalent workers… The nonprofit workforce now exceeds the workforce in each of the traditional market sectors in the nations studied, including construction, transport, utilities, communications, and most of the industrial manufacturing industries. The growth in the nonprofit sector is highest in Europe, which now even exceeds the United States. The third sector is the fastest growing employment sector in many parts of the world.
– Jeremy Rifkin, The Third Industrial Revolution



*    *    CaFMaC Fixes [almost] Everything    *    *

CO-OPs (continued)

Section 22.       (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) A co-op’s top executive may be paid as much as eight times more than the lowest-paid employee of that co-op, and that’s all. The outrage of undeserving corporate executives being unfairly paid obscene salaries and benefits in the mega-millions are DEAD, summa cum ABOLISHED AND ILLEGAL. 2) All other employees will be paid somewhere in between, according to a rational living wage scale. 3) Everybody top to bottom can still get bonuses and, if they earn them, merit raises. 4) Equal pay for equal work without discrimination of any kind is now the law, and there are grave penalties for violation.


The Congressional blather version:                In every co-op the combined amount of salary and fringe benefits paid to the highest-paid executive shall be an amount ranging up to, but never more than, eight times the amount of salary and fringe benefits paid to the lowest-paid employee of that co-op. All other employees’ salaries shall lie on a graduated scale within the range between those lowest and highest salaries. Each co-op employee’s “total annual earnings” thus shall consist of, and no more than, 1) salary and fringe benefits plus 2) Earned Bonuses and Annual Merit Pay Raises, if any, with which co-op employees may elect to reward themselves if their co-op earns excess surplus dollars through effective participation in the free competitive marketplace. No executive manager, supervisor or employee shall receive any other tangible or intangible remuneration.


The Congress hereby mandates equal pay for equal work, at every level from lowest-paid position to CEO/highest-paid, in every co-op and other establishment of any nature whatsoever doing business within the United States, its territories and possessions, without discrimination, deliberate or apparent de facto, with reference to gender, race, religion, ethnicity, sexual or political preference, hair color, pierced ears, nose ring, or any other among the multitudinous properties which distinguish human beings one from another, provided that any co-op may vote to have a dress code if a majority of its employees actually want one. Where a co-op has been found guilty of discrimination, deliberate or apparent de facto, by underpaying a female employee or any other employee, the total amount of underpaid back wages shall be calculated and paid to that employee as a lump sum accumulated by assessing every other employee of that co-op in an amount proportional to each employee’s salary as a percentage of all wages paid within that co-op, and a special election shall be immediately called whereupon every employee of that co-op shall vote on retention, reassignment or dismissal of the employee or employees who perpetrated the discriminatory underpayment or permitted it to occur.


With this measure it is the intent of Congress to abolish, with great contempt, the outrageously insulting and indefensibly immoral practice of paying top executives hundreds or even thousands of times more than the line employees whose real labor produces an enterprise’s real wealth, in many cases while paying their bottom-rank employees a minimum wage insufficient for living subsistence, and the equally contemptible underpayment of women and other employees who are performing work in every way equal to the work of higher-paid employees, to the benefit of the common good of the nation and of equal treatment and opportunity for all U.S. citizens.


There’s a connection between the retirement insecurity experienced by millions of Americans and the gigantic nest eggs enjoyed by CEOs. Executives are often personally rewarded for slashing worker retirement benefits. Here’s how it works: the executive scraps his employees’ traditional pension plan in favor of a much less generous and riskier 401(k) plan – or no benefits at all. This cost cut boosts company profits and stock prices, which in turn boosts the value of the executive’s stock-based pay. At the drug wholesaling giant McKesson, for example, John Hammergren froze the employee pension fund shortly after becoming CEO, closing it to new employees. But that didn’t stop the company from launching a lavish executive pension plan. Over the years, Hammergren has accumulated $145 million in his McKesson retirement assets – enough to generate a monthly check of $819,243 when he retires.
–Sarah Anderson (in The Washington Spectator)


Section 23.       (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) All co-op executives, managers and supervisors will be chosen by vote of the employees who will be working under them. 2) Every candidate for these positions must first qualify by taking and passing an environmental intelligence test to see if they have any.


The Congressional blather version:                 In every co-op the persons selected to carry out the co-op’s executive, managerial and supervisory functions, whether promoted or reassigned from within or hired from without, shall be chosen by vote of all those co-op employee/owners who are affected by the particular selection, with every employee voter casting one (1) equal vote. As a prerequisite for selection as chief executive, manager or supervisor within a co-op, every candidate for these positions shall be required to first take, and pass, a Common Intelligence Test (CIT) demonstrating comprehensive understanding of the linkage of anthropogenic carbon consumption to global heating, and the consequences for human civilization unless such carbon consumption is reduced with wartime urgency. No person failing this test shall serve in any position of co-op leadership from supervisor on up.


Section 24.        (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) Executives, managers and supervisors will have their performance annually evaluated by the employees working under them.


The Congressional blather version:                Affected employee/owners shall likewise evaluate annually the performance of the executives, managers and supervisors so selected.


SUMMARY of Sections 23-24

Plain English for the Voting Citizen: 1) Congress intends for all these new co-ops to fairly share responsibility for and commitment to the common good of the local communities they serve, and to the nation as a whole.


The Congressional blather version:  With these two measures it is the intent of Congress to promote employee commitment to a co-op’s success by building a culture of shared solidarity and shared responsibility among workers, supervisors, managers and executives alike, and a co-op’s overall commitment to the civic good of its community and citizens, to the benefit of the common good of the nation and of equal treatment and opportunity for all U.S. citizens.


Section 25.        (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) Each newly hired co-op employee must pass a six-month probation before receiving an ownership share in the co-op.


The Congressional blather version:                Each new employee hired into an existing co-op shall, upon successful completion of a six-month probationary period, be assigned one share of the co-op’s monetary value at the time of hiring, the monetary value of that share being calculated by dividing the co-op’s total value on the hiring date by the total number of employees employed by the co-op on that hiring date.


Section 26.        (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) A co-op employee who leaves employment after one year will be paid the dollar worth of his/her share in the co-op.


The Congressional blather version:                Any co-op employee who has been employed for at least one year, and who voluntarily leaves co-op employment or who is involuntarily discharged, shall upon departure be paid an amount calculated by dividing the co-op’s current total value by the total number of employees currently employed.


SUMMARY of Sections 25-26

Plain English for the Voting Citizen: 1) Congress intends to promote the incentive of true employee ownership of their jobs, as well as financial cushion for people between jobs, for the good of the nation as a whole.


The Congressional blather version:  With these two measures it is the intent of Congress to promote bona fide ownership and perception of ownership among all co-op employees, and to reinforce its reality with a financial cushion paid to workers in transition, to the benefit of the common good of the nation and of equal treatment and opportunity for all U.S. citizens.


Section 27.        (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) Co-ops will be free to succeed or fail as they will, and NO GOVERNMENT BAILOUTS.  2) To protect the public interest, failed co-ops will be immediately examined for fraud or misconduct and their assets will be auctioned to other co-ops.


The Congressional blather version:                Under no circumstances shall the federal government intervene with public tax dollars to save a failing co-op or any other business entity whatsoever. Every failed business shall be immediately examined for evidence of fraud, other illegal activity and/or greed-based mismanagement, and such findings shall be subject to appropriate legal remedies. Any co-op which may fail in its business activities to the level of bankruptcy shall be auctioned among other co-ops, in its entirety or by assets according to bidders’ preference, provided that the acquisition thereof shall not raise the market share of any purchaser to more than five percent (5%) of its market segment(s).


With this measure it is the intent of Congress to ensure reasonable concern for the valid public interest of citizen-consumers served by a failed co-op, to the benefit of the common good of the nation and of equal treatment and opportunity for all U.S. citizens.


Section 28.        (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) From now on all restaurants and food sellers across the USA will pay all their employees a Living Wage plus federally mandated fringe benefits, independent of tips. 2) They may not prevent tips from being given to their employees, as customers may freely elect to do. 3) If they feel they have to raise their prices to afford paying their employees fairly, that’s called true and honest competition.


The Congressional blather version:                Every restaurant and prepared-food-selling establishment of every nature in the United States, howsoever constituted or described, is hereby made expressly subject to the Living Wage, fringe benefit and adequate compensation provisions of this Act. Congress expressly directs that employer reliance on tips and gratuities, traditionally rationalized as a device for avoiding payment of adequate living wage compensation to food service employees, is hereafter prohibited by law. Unsolicited tips voluntarily proffered by diners served by an employee are expressly permitted by this legislation.


Section 29.       (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) A hospital co-op will count as its employees everybody who was working in the hospital when it became a co-op – except any physicians who choose to opt out – and the wage provisions of Section 22 of this Act will apply. 2) The new employee-owners will charge a fair use fee to doctors who opted out but still use the hospital. 3) Each hospital co-op will have one and only one price list for every service, drug and device delivered or provided in that hospital, and this one price list will be used to compute the bill for every person who uses the hospital;  having up to a dozen different hospital price lists for different categories of patients is unethical and now illegal. 4) Hospital price lists may charge up to 35% markup over cost, but in the spirit of true competition any hospital co-op may elect to set its prices lower than 35%. 5) Patients who inappropriately use an expensive emergency room for non-emergency services they reasonably could have gotten from a private doctor may be billed and sued by the hospital to recoup the avoidable costs it incurred at that patient’s demand. 6) No hospital is allowed to turn away or sue a patient brought in by ambulance personnel who say the patient needs that hospital’s emergency care.


The Congressional blather version:                Wherever a newly formed co-op consists of a hospital(s), the persons designated as co-op employee-owners at the time of the co-op’s founding shall automatically include all persons regularly employed in the various functions and services of the hospital(s). Physicians who practice their trade in the hospital(s), but are not employees of the hospital(s), shall be presented an option to also become employee-owners of the hospital co-op, and those who decline shall not be eligible to become employee-owners of that hospital(s) for a period of not less than five (5) years. Employee-owners of a hospital co-op shall collectively decide the level of fee to be charged for the privilege of using of the hospital(s) facilities by physicians who are not employee-owners of the hospital co-op.


A hospital co-op shall use one, and only one, price list for its inpatient, outpatient and emergency patient services, pharmaceuticals and miscellanea, and the listed prices shall not exceed actual cost plus thirty five percent (35%). A hospital co-op may elect to compete with other hospital coops by charging less than the maximum thirty five percent (35%) markup. When it is determined that a patient requesting hospital emergency services could have obtained the same services from a primary care physician or other non-emergency provider, a hospital co-op may charge the full emergency-level price to recoup the cost of services provided at the patient’s request and may sue as necessary to ensure payment of emergency room bills thus inappropriately generated, but no hospital co-op may refuse to accept, or sue, a patient delivered by emergency medical service personnel who attest that the patient requires the hospital’s emergency care.


Section 30.       (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) Coo-ops that sell insurance will ensure that the entire public has fair and equal access to their insurance, will not cherry-pick clients, and will spread true actuarial cost evenly across all their insureds. 2) No co-op selling insurance is allowed to deal in any other type of financial business whatsoever.


The Congressional blather version:                Wherever a co-op deals in insurance of any nature, that co-op shall honor the first principles on which the concept of insurance is founded, guaranteeing 1) that all entities of the class being insured shall have equal access to the insurance, 2) that the insurer shall not exclude certain higher-than-average-risk entities within that class through the practice known as “cherry picking,” and 3) that true total risk of the entire class of insureds as a whole shall be actuarially shared equally among all members of the insured class. While focusing on service to clients, co-ops and all other entities which deal in insurance shall be prohibited from dealing in any manner whatsoever in financial speculation, investment, financing, or any of the business functions of banking.


Section 31.        (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) Professional sports teams must either become co-ops or go out of business. 2) Individuals who own sports teams may either become co-op members or sell out at whatever price they can negotiate with the co-op, then we’ll see how much they really love sports. 3) Sports co-ops may not charge admission to their games unless they also hold an equal number of games free of charge on unfenced vacant lots with plenty of room for folks to sit and watch. 4) Organizations acting as trade associations for sports teams are hereby abolished and declared illegal.


The Congressional blather version:               Professional sports teams of every nature are hereby presented the option, to be decided within three (3) months after enactment of this Act, of 1) being abolished, or 2) becoming co-ops under all terms and conditions for co-ops as specified in this act. Individual owners of professional sports teams are hereby presented the option to become members/owners of co-ops which are thus established, or to opt out for remuneration at a level of compensation decided by the incipient sports co-op. Sports co-ops thus formed are forbidden to charge admission to their events unless they conduct an equal number of free events on unfenced vacant lots fully accessible by the public in each co-op’s home territory. Organizations representing professional sports teams in manner equivalent to a trade association are hereby abolished and forbidden by law.


Section 32.        (of the Capitalist Free Market Corrections Act – CaFMaC)

Plain English for the Voting Citizen: 1) Gar-awn-teed:  Something just awful will be done to any push-the-limits type who tries to restore stock-market-like monetary speculation into the financial dealings of any co-op.


The Congressional blather version:                Any person convicted of inventing or attempting to invent, openly or secretly, a method, means, algorithm, formula, device, or any other way whatsoever to speculate or gamble in the guise of speculation, on the financial dealings or prospective dealings of any co-op, shall be sentenced to serve four (4) years in Poverty School immediately followed by four (4) years in Gambling School. If such convict survive the eight years confinement and be released to free civil society, the convict shall be guaranteed entry-level employment by any employer engaged in operating sewers.


*          ©          *

READERS COMMENT: Your ideas are invited for dealing with the issues addressed in this post. These posts attempt to present new perspectives – THIRD OPTIONS – to move beyond the conservative-liberal divide that is so poisoning our national sense of shared community. New and wiser options are always available to make life in America better for all the people. What are yours?  Be concise, use up to 200 words. Have a swell day.


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