EOnation: union ownership of firms

["Jacquelyn Yates" <Yates@mail.salem.kent.edu>]

Following is some text from the paper on approaches to employee ownership at 
the national level, focusing on ownership of enterprises by labor unions.  It's 
mostly about Histadrut, but I'm hoping for hints and help about other possible 
sources.

Ownership of firms by labor unions

        Undoubtedly, the Histadrut (General Labor Council) of Israel as the 
most extensive experience of labor unions' direct ownership of enterprises.
        
        Its holding company Hevrat Ovdim was established in 1923 by Histadrut 
to provide support for a pluralistic cooperative sector in the Mandate of 
Palestine.  Today, Hevrat Ovdim is organized into several large divisions, some 
with hundreds of enterprises within them.  One of its main divisions is 
comprised of agricultural cooperatives, and another of industrial kibbutzes and 
other types of cooperative enterprises, but many larger enterprises are 
administered hierarchically, without or without labor participation [What is 
the current cooperative:administered ratio?  Do all enterprises in Hevrat Odvim 
today have participative management?]  Direct ownership of firms began with the 
purchase of bankrupt and closing privately owned firms - a glass factory and 
forge in Jaffa. (Almogi, 133) Holdings of Hevrat Ovdim include a workers' bank, 
an insurance company, a consumers' cooperative, a medical insurance enterprise 
that provides care as well as insures, a public works construction holding 
company with hundred of construction firms and firms that supply them, a 
housing construction holding company. The labor-owned sector of the economy is 
so large that it is called by its own name, "the labor economy."  In 1970, it 
counted for almost 20% of the entire Israeli economy and a little more than 20% 
of workers in that economy.  

There has always been a great deal of tension within and around Histadrut's 
ownership of firms. The tension has been managed by explaining that Israel, and 
Histadrut within it, are special.  Histadrut (the General Federation of Labor) 
began in 1922 as a labor organization campaigning for Jewish workers in the 
Mandate of Palestine and as such was an organizational home for much of Israeli 
political leadership during the struggle and war for Independence.  The first 
duty of Histadrut has been for the creation and protection of the Jewish state 
of Israel, (Almogi, 132) and only secondarily is it a workers' protection 
organization.

        The ownership of many and varied firms has not always been easy for 
Histadrut.  In addition to fulsome criticism on grounds of ideological impurity 
and betrayal of the working class, Histadrut has had to preside over erosion in 
the numbers and prosperity of the kibbutzes, the cherished economic symbol.of 
Israel, and the only form of labor enterprise owned by the people who work in 
it.  (There were over 1000 agricultural and industrial kibbutzes in 1970.)  
Most of the enterprises under Histadrut's wing are wholly owned by Histadrut or 
one of its holding companies, and the workers have no ownership stake.  Common 
ownership through Histadrut with central control was seen as being closer to 
the ideal of labor control. (Daniel, 34)

        Histadrut has undertaken ownership in a few "mixed" enterprises with 
private investors, but it imposed such strict requirements for ownership (at 
least 50%) and control (right to appoint management and be immune from any 
losses), that it is not surprising to find that "the number of enterprises 
owned jointly by Histadrut and private capital is quite small ... (Daniel, 65)

        Under United States law, labor unions are not permitted to own 
enterprises.  A few union-owned banks survive from a 1920's  movement.  These 
include the Amalgamated Bank in WDC, which was established by the amalgamated 
clothing workers.  The Union Labor Life Insurance Company was established by 
?????  tried in U.S. by Knights of Labor?  Banks - [Ask Steve Clem].

Abraham Daniel mentions that there were labor banks in Germany and Austria

 

--
Jacquelyn Yates, Ph.D.                
Political Science                                   
Kent State University - Salem         
2491 S.R. 45 South     
Salem, OH 44460

yates@mail.salem.kent.edu
FAX  330-332-9256 
Tel. 330-337-4282



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