Workers' Preferences for Co-Operatives Versus Private Buy-Outs

We present some survey results on the preferences of workers for a coop as opposed to a private buy-out if faced with the closure of their workplace. Although there has been quite a lot of theoretical discussion of this issue there is relatively little empirical evidence. Although hedged about by reservations we conclude that the principal factor that determines preferences are the‘job risk’ characteristics of the coop and the privately owned firm. To a very large extent a worker will prefer the coop to a private buy-out if it leads to increased job security and if the coop is considered to be viable. We also find that workers expected that everyone would work harder in the coop and that this, together with increased shop floor control of production, was expected to lead to higher earnings. Significantly, however, these expected differences in the work/earnings trade-off between the coop and the privately owned firm did not lead workers to prefer one to the other.