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> I'm actually under the impression that everyone would get paid the same, as everyone would have an equal share of the company and profits.

Real-world worker's cooperatives have equal voting shares for employees, but not necessarily equal pay (though generally not as unequal pay as is common in traditional corporations.)

They feature democratic control, and its quite possible for a consensus to exist that some labor is more valuable to the coop than other labor.

Sorry to be so confrontational about your intentions, however I just see way to often good businesspeople (like Elon Musk) talk about how they are changing the world, while using this to underpay their workers. Now as a theoretical worker at your company, I think I couldn't care less about what other people make, the question for me is would my pay be competitive with my other options. If however your company is based on the idea that normally I would be paid 100k and the janitor 20k, but in yours both of us will earn 60k, well I hope you can understand why I would be less than enthusiastic about this proposition.

The point of the cooperative model is to find people who do not necessarily prioritize profit over all else. Teachers for example tend to value the social good of their work over pay. Worker coops would offer people like that a way to actually produce goods rather than just educate people.

But the worker coop model is not for people who want the most profit. However we cannot simultaneously have a world where no one is exploited but the most capable maximize their profit. In order to have more income equality the elite would have to accept less pay. We see major inequality because those who could have taken as much profit as possible. That kind of thinking would need to end if we are to end worker exploitation.

However there are non-pay related benefits to working for a coop and we would find people who appreciate those benefits more than money. Certainly this is not for everyone.

But what if the coop makes millions and every worker gets $500k per year? That would be an awesome place to work.

A co-op is basically the default corporation. As in, everyone shares the profits and liabilities equally.

This means that if you're making 1 million a year in profit, and you have 10 employees, everyone gets 100,000.

But it also means that if you have to pay 1 million a year as interest service payments on your bank loan, and your profit is 2 million, you still only make 100,000 per person. To address your point, the salary is set by every current employee based upon the financial condition and strategy of the company in real time. If sales are down for a quarter, salaries will go down. If the company is saving for a big investment, salaries will be lower. It all depends on how the owner-employees decide to allocate the funds. As such, you wouldn't so much be an "employee" looking for a competitive market salary, as the 25th co-founder signing up for whatever the current compensation/investment package the present owner-employees have decided upon within the financial strategy of the company.

Basically, expenses and costs are shared equally across the company. As in, every single worker is a co-founder.

This is an ideal model and I'm surprised it hasn't taken off more in tech. We are rapidly approaching the point where talent and capital are the two fundamental bottlenecks to innovation, profits and progress. Offering Engineer #1 one percent compared to the co-founder's 30% seems absurd in this climate. The engineer will just go and co-found his own company, and charge for consulting services.

The co-op is the natural end state of a capitalist society where the only means of progress is through hard innovation, research and optimization. This is the only solution when there is no more easy sweat-shop exploitable work which prints money.

Personally, this future can't happen fast enough. Most talented people I know are fed up with the tyrannical power structure of startups and corporations in general.

You can also set it up like a small democracy as the company gets larger. Have the coop (that is all the people in it) evaluate different jobs and adjust salaries accordingly (or perhaps pay people based off of the jobs they could fill rather than the ones they are filling). Have steering committees make decisions about where to place manufacturing and design studios, etc. Keep it all very internally (and externally?) transparent.

> I honestly don't mind if the staff packing shipping boxes gets paid the same as I do designing new robots

You may not mind, but this sort of salary system would undoubtedly make it very difficult to attract people to more senior, in-demand positions. If the going rate for a highly experienced robotics engineer is 300k, and you can only offer 100k because you can't afford to pay everyone 300k, it will be nearly impossible to fill the position.

Certainly this model makes some things more difficult. That is kind of unavoidable when you do things totally differently. There will be pros and cons any time you choose one approach over another. However, this problem isn't insurmountable. The members of the collective could all agree to pay certain bonuses to highly productive members, or everyone could agree to give more productive members more time off.

Alternatively, we could only hire people like me. If you want to make the most money, go work for a traditional exploitative company with a lot of extra money. If you want to live with a clean conscience, take less pay. Teachers do this for example. They teach because they care even though the salary is less. A tech coop could offer better pay than teaching with similar non-monetary benefits.

We will never end exploitation as long as everyone focuses solely on maximum profit, but if anyone out there wants something different we will find them. I am not saying this is guaranteed to succeed but that it is worth trying. Elon Musk didn't think SpaceX would succeed but he knew it was worth trying even if he lost all his money. Not trying the coop model means accepting the status quo of exploitation, and I'm not sure I can do that.

Could you explain all this again, or link me to an explanation that goes over all this from start to finish? Because I'm still scratching my head.

You say that a company that pays me what the market says I'm worth, is "exploitative." Your coop won't exploit me, and results in me earning less.

So why are they the exploiters again, and not you?

Actually if a normal company is to make a profit off of you, you will get paid less than what you are worth to them. There are some market forces at play that determine typical worker's pay, but they aren't really tied to what you are worth and are instead the smallest fraction of your worth the company can get away with based on what other companies offer. Because of the nature of profit seeking companies, this fraction is always dropping in a healthy market. WalMart workers, for example, are not paid what they are "worth" or the company would make zero profit on their labor. It is a frustrating misconception that workers in a capitalist market get paid what they are worth.

In a coop, many people will get paid more than they would otherwise, as no one gets paid starvation wages unlike most companies in the US.

Highly productive workers may get paid less in a coop than in a typically arranged company however because typical companies exploit the workers at the very bottom in order to reserve more money for those at the top. It is possible for highly technical workers to get paid more in a coop though. Apple's latest profits were something like $750k per worker per quarter (this includes apple store employees), though clearly they are exceptional. If a coop does very well, they could easily provide more money to all workers than the typical pay of a highly successful company.

A coop that makes a lot of money can also contract out some work to coops that make less money, thereby taking advantage of cheaper labor without relying on exploitation of workers. A coop that ships boxes will earn less per worker than a coop that designs robots, but such a system is generally more fair to workers.

So some people may get paid less than normal but most would get paid more. Traditional companies can afford to pay more to those at the top by exploiting those at the bottom. This does not happen in a coop.

I don't think it's a misconception that workers get paid what they are worth. In a capitalist system, something is only "worth" as much as someone is willing to pay for it. Few people question this notion when we're talking about the price of gold or stock market shares, but it's true of labor as well.

From what I understand, Marx's definition of exploitation involves companies paying some workers less than what the fruits of their labor are worth. For example, McDonalds might pay an employee $9 an hour while getting $12 an hour in revenue from that employee's work. But, it sounds to me like your coop would be guilty of the same thing.

To take an extreme example, suppose your coop includes a janitor and a heart surgeon. Both used to work as independent contractors and bill for their time to whoever needed work done, and now your coop sends the bills and takes in the money. Before joining your coop, the janitor was making $8.50 an hour and the surgeon, $500 an hour. The coop now pulls in $508.50 an hour and gets to decide how to distribute it. I gather from your comments that you find income inequality and starvation wages to be undesirable things. Therefore, you equalize things somewhat and give the janitor $20 an hour and the surgeon $488.50.

Now, haven't you committed the same sin as the exploitative companies, namely paying an individual less than the fruits of their labor have produced?

Well in basically all cases the worker can't be paid exactly as much as they produce because some of that money must be used to pay for other business costs.

However in a market with excess labor, workers can get paid a very small fraction of the value they produce, keeping large sums of profit for those at the top. In a coop the workers simply won't allow this, and more reasonable pay rates can be determined.

According to another commenter, many coops operate with some kind of market rate pay scale and place limits on the ratio of highest pay to lowest pay. This prevents one CEO from gobbling up half of the money used to pay workers and leaves more money to pay those at the bottom.

So you are correct that in all cases workers are paid less than the value of what they produce, but in a worker-run coop the ratio of pay to value can be much higher than in a typical business.

As far as workers getting paid what they are "worth", I think you are missing something. Yes, workers are only worth what someone is willing to pay for them. However I don't think workers get paid the maximum a company is willing to pay, especially in a market with excess labor. A company may be "willing" to pay programmers $180k per year before their business model fails, but due to a good supply of desperate people they may only need to pay people $80k per year. So in that situation the workers are getting paid much less than they are worth.

Would you agree that workers typically do not get paid the maximum the company would be willing to pay but instead get paid the minimum the market will bear?

I agree with you entirely. Honestly I have to think that people with this logic don't truly believe it, the cognitive dissonance would be too high. Rather they are trying to exploit naive workers who have an idealistic understanding of the world. Meanwhile you and I will continue to be paid fairly by so called "exploitative" companies.

I hope you will read my comment adjacent to yours, rather than simply assure yourself that what you already believe is correct. You can theorize that I simply don't understand, but I offer an explanation for why this is the case in my other comment.

Simply put, most workers would get paid more than they typically would, but the workers at the very top may get paid less. This would be true in any scheme that seeks to balance out the pay of those at the top, since there would no longer be huge sums of money from the exploitation of those at the bottom.

If you don't believe exploitation exists, I urge you to look into the state of capitalism in the 1850's when Karl Marx was forming his opinions and compare that to the state of WalMart workers today. Exploitation is a default component of capitalism and is not simply some imagined issue made up by those who wish for a more egalitarian society.

And apparently other commenters have mentioned that coops can have the same kind of pay structures as normal companies. For example someone noted that one company limits the pay to the CEO to 75x the lowest worker's pay, and he currently sits at just 60x. This is closer to pay differences we saw in the US in the 1960's.

But certainly when you pay the people at the bottom a fair wage, there may be less cash to throw around at the top. This is not a design flaw.

Organizing as a cooperative does not necessary mean that everybody is paid the same. For example John Lewis a large UK high street retailer is organized as a cooperative and limits the highest earner salary to x75 the lowest salary (the current chairman is at x60), and bonuses are distributed in an equitable manner.