Trade unions and cooperatives began to emerge in the U.S. in the 1840s, when some of the USW’s predecessor unions, such as the Iron Molders, had begun to organize. In his book History of Work Cooperation in America (1980), John Curl notes that Iron Molders went on strike in Cincinnati in 1847, and although the strike was unsuccessful, went on to organize a cooperative foundry that year. An Iron Molders cooperative foundry in Pittsburgh soon followed. Curl writes that “Many of the worker cooperatives started in the late 1840s and early ’50s lasted only a few years. Besides scarcely having the resources to get off the ground, they met with cutthroat capitalist competition. Businessmen’s associations did everything they could to wreck them.”
William Sylvis, who became President of the Iron Molders Union in 1863 and the National Labor Union in 1868, led the development of cooperatives in both organizations before his untimely death in 1869. According to Curl, the “Iron Molders Union set up eleven cooperative foundries in 1868.”
As the National Labor Union began to wither in the 1870s, the Knights of Labor began to flourish. The Knights of Labor, founded in 1869, aimed to join unions and cooperatives to build a “Cooperative Commonwealth”. At its peak in 1886, the Knights of Labor had roughly 700,000 members, many of them in unions that were predecessors to the USW, and included nearly 200 cooperatives. The Haymarket Square violence on May 4, 1886, however, triggered a significant backlash against the Knights of Labor and cooperatives.
Although most trade unions became part of the American Federation of Labor (AFL) by the turn of the century, the AFL opposed production cooperatives, believing them to be a threat by undercutting negotiated wage rates. Without the support of unions, few production cooperatives remained in the early part of the 20th century. With the formation of the Committee for Industrial Organizing in 1935, soon to become the Congress of Industrial Organization (CIO), the focus turned to organizing “unskilled” workers, production for WWII, and the post-war expansion of American manufacturing.
In the late 1970s, however, the U.S. steel industry started to crumble. After thousands of United Steelworkers of America (USWA) members at the Campbell Works of Youngstown Sheet & Tube were laid off in 1977, USWA Local 1462 member Gerald Dickey led an effort to have workers buy the steel mill with the help of community investment and government loans. Although this effort was ultimately unsuccessful due to changes in steelmaking technology, a lack of investment and financing, and the global challenges facing the industry at the time, the campaign over the next two years to save the Youngstown steel mills spread the idea of worker ownership across the union. The International leadership of the USWA did not support a buyout initially, stating that (a) not enough money could be raised to purchase the mill, and (b) it would be unlikely to obtain enough federal grants or loans to modernize the mill. Another concern could have been that saving these jobs could lead to putting other steel mills out of business, costing more jobs than would be saved. After eighteen months, President Lloyd McBride did eventually endorse the buyout plan as more steel mills closed.
Between 1979 and 1983, when Lynn Williams became International President of the USWA, the union membership had dropped from 1.4 million members to just 600,000. In an attempt to stem the job losses and keep factories running, Williams led an effort to swap contract concessions for ownership through ESOPs and Board seats. By 1993, roughly 70,000 USWA members participated in an ESOP plan, including members at Bethlehem Steel, LTV Steel, Algoma Steel, Wheeling-Pitt Steel, Republic Engineered Steel, Kaiser Aluminum, Northwestern Steel & Wire, and Dow Chemical.
Although most of these ESOPs did not provide majority ownership, they succeeded in getting those companies through difficult times, kept factories open, and kept people on the job. The USWA established the Worker Ownership Institute non-profit in 1994 together with its ESOP employers to promote worker ownership. The problem was, however, that ownership was limited to the just the value of the share – USWA members in most of these ESOPs still punched the same time clock, still reported to the same boss, still did the same job – they had no means to exercise their ownership. As a result, once the economy turned around, the shares were sold back and “ownership” was relinquished.
Two of these ESOPs that were 100% worker owned (or nearly 100% worker owned) and were managed democratically – Market Forge in Everett, MA and Maryland Brush in Baltimore, MD continued to operate as worker-owned companies for the next 20 years.
This is why we believe ownership must mean more than just the value of a share.
Lynn Williams retired in 1994, but remained engaged in worker ownership, including involvement in the Western Labour / Worker Co-op Council in Canada, founded in 2006, and was the keynote speaker at the Eastern Conference on Workplace Democracy in North Carolina in 2007, supporting the formation of the new Union Co-ops Council. The Union Co-ops Council, now part of the U.S. Federation of Worker Cooperatives, is a network of activists that aims to build bridges between worker cooperatives and unions.
In October 2009, USW International President Leo Gerard announced a partnership with Mondragon International to advance Union Co-ops in the United States. Discussions between USW and Mondragon had begun in September 2008 with a chance meeting in Mondragon, but continued over the following year as the U.S. endured its financial crisis and Great Recession.
“Sustainable Jobs, Sustainable Communities: The Union Co-op Model” was developed by Rob Witherell (USW), Michael Peck (Mondragon USA), and Chris Cooper (Ohio Employee Ownership Center), and released in March 2012. This model was intended as a roadmap to integrate the union collective bargaining structure with worker-owned cooperative structures, as well as offer ideas on how to develop and grow “union co-ops”.
In 2014 a new non-profit, 1worker1vote, was formed to advocate for union co-ops generally as well as a vehicle for the USW and Mondragon partnership specifically.
Most recently, in 2024, the USW Co-ops Council launched, including members at Co-op Cincy, Sustainergy, WorX Printing, and Action OSH, for member co-ops to better communicate among themselves and to better advocate for union co-ops.