Worker cooperatives as a tool to fight unemployment – experiences from 1990’s economic downturn in Finland Jarmo Hannine

1. Worker cooperatives as a tool to fight unemployment – experiences from 1990’s economic downturn in FinlandJarmo Hanninen, Coop Finland NORDIC COOPERATIVE NETWORK CONFERENCE OPEN SEMINAR: THE NORDIC CO-OPERATIVE MODEL Reykjavík, Iceland – March 21, 2014

2. Thin tradition of worker-cooperatives • Duringearly 1900’s therewerecoops in stevedoreservices and constructing • After WW II worker-coopsvanished • During 1980’s idea of cooperationwasbrought in to discussion in the context of greenthinking and localcommunities • Therewerecouple of coopsestablished in totallydifferentbranches: e.g. environmentarchitecture and logisticsservice

3. Dramaticeconomicdownturn • Early 1990’s the trade with Soviet Union collapsed • Finnishcurrencywasdevaluated • This led to problems in businessesthathadforeigncurrencybasedloans • The outcomewasmassiveunemployment

4. New situation in employment and market • Fromsteady, full-timeemployment to long lastingunemployment • Therewere no structures to workpart-timeorevenonlyoccasionally • The demand in the marketwase.g. smallerconstructionservices; notattractive to biggerbusinesses, and smallentrepreneurshadeconomicproblems

5. Enterprise ownedbyunemployedpeople? • Business established with almost no capital • Not-for-profit, target to employpeople • For thesereasonscooperativewas the choice • Notself-employment, butmutualemployment • Luckily, ourlegislation on unemploymentfeesmakesitpossible for co-owner (lessthan 15% share) stillget the feeifhe/she is unemployed

6. Rapidspread of the idea • Firstintroducedduring a course for unemployedaudience • Local association for unemployedpeopleactivelystarted to study the possibility to establish a cooperative • Startwassuccesfull and the idea spreadallover Finland through the network of theseassociations

7. No coordination, just someeducation and advice • Therewas no coordination in the phenomenon • Education and advisoryserviceswereproducedby the Co-operative Institute (Univ. Helsinki) • KSL Civic Association for Adult Learning arrangedcourses, partlyfundedbyemploymentoffices • Pellervo Confederation of FinnishCooperativeshad national projectprovidingadvice and materials • Itwas a movingtrain: from 1993 to 2000 overonethousandcooperativesweresuddenlyestablished

9. To learnfrom the experiences • Some of the coopsestablishedduring 1990’s arestillworking and someevensucccesfully • The rapidspreadwasbased on the grass-root action of the association of unemployedpeople • Therewaslack of developmentresources and structures, which led to failures and continuityproblems: originalmembersretiredorwereemployedelsewhere

10. Key elements to supportworker-cooperation • Developmentstructure and resources, alsoresearch and funding • Cooperation is notmainstream, itsspecialityshouldbetaken into consideration • Deeperbranchknowledge in the developmentwork:arecoops at theirbest in every business? • Reasonableunemploymentfeecriteria • Grass-roots!