Worker Cooperatives Reduce “Hard-Core” Unemployment

Buenos Aires – During the social and economic collapse of 2002-2003, the Argentine state encouraged the formation of workers' cooperatives, which helped mitigate the worst effects of the crisis, reduced hard-core unemployment, and now as independent, democratic, worker-controlled organisations are providing services to the public and private sectors.

“Business enterprises are only interested in profits,” Cristián Miño, a cooperative movement activist, told IPS. “In contrast, in a cooperative there is comradeship: we are all owners together, and if one of us gets into difficulties, the cooperative is there to help out.”

In 2003, Miño was an unemployed 25-year-old living in Florencio Varela, a densely populated working-class district on the outskirts of Buenos Aires that was selected for a government pilot plan to “seed” cooperatives, that went on to become a success.

Under the pilot programme, the centre-left government of the late President Néstor Kirchner (2003-2007) created 50 cooperatives, each with 16 members, to build housing in Florencio Varela as one of several experiments to combat joblessness. At the peak of the crisis, the unemployment rate was over 24 percent, and more than 54 percent of the population was living in poverty.

“A lot of the people involved knew nothing about construction work,” Miño said. Today, 33-year-old Miño is the head of the Florencio Varela Federation of Worker Cooperatives (FECOOTRAUN), which has 600 members belonging to 16 cooperatives.

Nearly all of the cooperatives work in the construction industry, although some grow plants in nurseries, carry out afforestation projects, or are involved in producing inputs for the building industry, like pre-moulded fences, furniture, ironwork, windows and doors.

In 2006, FECOOTRAUN had 1,500 members. But working together is not easy, Miño said. “It's difficult to organise. Not all the cooperatives are still active and successful; there is normally a certain attrition rate,” he said.

However, the Florencio Varela cooperatives are currently contracted to build infrastructure for different levels of the government (local, provincial, and national) and for private companies that have been awarded government contracts for public works.

In the San Jorge barrio in Florencio Varela, the federation built an 880-unit housing estate and enlarged the school premises for a private company that had won the contract.

Among members of the cooperatives, “no one earns less than 2,000 pesos (500 dollars) a month,” Miño said. That is nearly twice the pay level for new workers recruited by state-sponsored cooperatives.

The pilot project in Florencio Varela shows that the cooperative movement, even when it is promoted by the state instead of by workers on their own, can be a tool to rescue people from poverty and joblessness.

In 2009, the ministry of social development launched the “Argentina Trabaja” (Argentina Works) programme with the goal of creating 100,000 jobs for highly vulnerable people who are unemployed, lack training and have no other income.

The ministry signed agreements with local governments nationwide to promote cooperatives, provide training for those who join them, and carry out infrastructure works.

The cooperatives, with 60 members each, build drains and water mains, community centres and community soup kitchens, refurbish schools and health centres, mend roads, and provide access facilities for the disabled, among other projects.

To participate in the programme, would-be beneficiaries must have no income except the universal child benefit, amounting to 220 pesos (55 dollars) a month for each child under 18 who attends school. The allowance is granted by the state to the poorest families.

The new recruits receive work clothes, and are paid 1,200 pesos (300 dollars) a month. They have to register with the social security services to ensure entitlement to health care and, eventually, a pension.

A mid-2010 study by the ministry of social development found that half of the cooperative members participating in the plan are women. Overall, participants belong to the segment of the population suffering from so-called “hard-core” or long-term unemployment.

The study reported that 79 percent of participants had not completed the 13 years of primary and secondary education that are compulsory in Argentina, and 77.6 percent had no trade or profession when they entered the programme.

In the last few months, training has been incorporated for programme applicants; it is provided by trade unions, other cooperatives or municipalities themselves.

Fabián Repetto, the head of the social protection programme at the Centre for the Implementation of Public Policies Promoting Equity and Growth (CIPPEC) – a private, non-profit organisation working for justice and democracy in Argentina – talked to IPS about how well this experiment has worked.

“CIPPEC was asked by the local governments in Morón and Esteban Echeverría (districts in Greater Buenos Aires) to improve the administration and financial accountability of their programmes,” he said.

In Morón, the goal was to monitor transparency and financial reporting, and in Esteban Echeverría it was to improve selection procedures for the programme's intended beneficiaries, he said.

But Repetto said that the programme lacks an operational manual with shared criteria across the board, and that its results are very uneven, depending greatly on the efficiency of individual municipalities.

In Repetto's view, the programmes focus too much on public works and neglect other areas. “There is enormous demand in the field of care for the elderly, and with good training that could be a window of opportunity, especially for women,” he said.

The income-generation initiatives that mushroomed in Argentina in response to the severe 2002-2003 crisis have come together in the National Confederation of Worker Cooperatives (CNCT).

Among the various models that sprang up, in addition to the state-promoted cooperatives, are worker-run factories that were salvaged by the employees after the owners declared bankruptcy – and, in many instances, actually fled.

José Sancha, the head of CNCT, told IPS that the cooperative federation is working with the ministry of social development to offer training courses for workers new to the cooperative movement who are entering the Argentina Works programme.

He also highlighted that many of the 3,000 cooperative groups that were created under state protection between 2003 and 2006 “are established now, and are part of the cooperative movement.”

In Sancha's view, it is a good thing for the state to channel orders for goods and services towards cooperatives capable of building public works, but he said much more needs to be done to strengthen the cooperatives.