This article is adapted from an article published in the Financial Times, January, 1999 under the heading “Employee Ownership Makes You Live Longer”
With the debate heating up about rising inequality and whether employee ownership/co-operatives might contribute to ‘social outcomes,’ the following little article reports on a study which provided a resounding “yes.”
Are co-operatives good for your health?
At least one UK researcher believes they are! Dr David Erdal developed the thesis that people flourish in more egalitarian communities, such as those with widespread employee ownership and large numbers of worker co-operatives. To test his hypothesis, Dr Erdal examined three towns in an area of northern Italy near Bologna: 26% of the workforce in one town were employed in co-operatives, in another the figure was 13%, and in the third town there were no co-operative workers at all. The three municipalities were prosperous, with successful businesses and low unemployment. They were all within 80 kilometres of each other and in the same valley, so their physical and cultural environments were similar. They were also about the same size, with populations ranging from 40,000 to 80,000.
The following factors were measured:
- Crime: victimisation, policing, confidence, feelings of security, domestic violence.
- Education: level attained, age leaving school, truancy, post-school training, perceived importance of education.
- Health: physical health, emotional health, mortality.
- Social Environment: perceived gap between rich and poor, helpfulness of authorities, supportiveness of social networks.
- Social Participation: membership of clubs, voting rates, blood donation.
The results were in line with the prediction: the greater the proportion of people employed in worker co-operatives, the better the outcome across all five measures. The town with the most co-operatives rated significantly higher than the town with no co-operatives. The town with the intermediate level of co-operatives was in between.
Dr Erdal's conclusion was that an economy with a moderate to high level of employee ownership produces significant beneficial effects in the wider community: better health and education, less crime, greater social participation and an improved social environment.
The result was subsequently corroborated by employee-owned UK retail business John Lewis, whose employee-owners lived longer than their peers at businesses where employees had no stake. “The organisation had to revise its actuarial tables”, says Ignaczak in an article on Shareable.
The question of cause and effect – do positive social indicators cause co-ops, or do co-ops cause positive social indicators – is still perhaps open to question. But it at least shows that when looking for a job or deciding where to live, employee ownership is a useful heuristic to follow!
Duncan Wallace
New Economy Journal Managing Editor
Duncan is a PhD student at Monash Law School, where he researches the history and philosophy of corporate legal personality. He has graduate qualifications in economics and law, and his BA was in metaphysics. He has worked as a co-operative enterprise consultant and for the Business Council of Co-operatives and Mutuals, and has tutored in Trusts Law and Aboriginal Cultural Studies.
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