The Young Foundation reveals a new way to reimagine our economy through a trailblazing model of economic and social equality.
News Release Font: The Young Foundation
Yound Foundation research launched on 5th April on the Mondragon Corporation, reveals a large global business owned by its workers delivering economic and social equality by combining success in the marketplace with social benefit.
Mondragon, the world’s largest worker-led cooperatives association with annual revenues of over €12 bilion (equivalent to those of Kellogg’s and Visa), represents a radical alternative system with equity embedded in its core. This is epitomised by salary ratios between the lowest and highest paid workers of 1:9 (compared to 1:129 for FTSE 100 company), the redistribution of wealth and the growth of cooperatives which are supportive institutions including schools, banks and welfare support for members. These findings have highly important implications for the development of an inclusive UK economy, and demonstrates how businesses can be both competitive in the marketplace and generate social value at large scale.
The research launch will also present a joint set of policy proposals with Co-operatives UK on key learnings government and civil society can take this model for the UK and beyond.
Key elements of Mondragon’s ecosystem:
- Equality is embedded in working practices
- Cooperatives work together to achieve their aims through inter-cooperation
- Cooperatives provide supporting infrastructure
- A commitment to and investment in innovation
- Reinvestment of profits and wealth distribution
Implications of this research:
- Businesses can place social benefit at the core of their mission without compromising their success and competitiveness in the market.
- Wealth needs to be distributed by taxation, but more equal pay rations also lead to wealth redistribution.
- Sustainable positive change is possible at scale.
- Ownership by workers act as strong motivator for their loyalty to its business. Thus, worker ownership is a very powerful driver of social innovation.
Glenys Thornton, EO of The Young Foundation said:
It has been a great honour to have worked with Mondragon to launch “Humanity at Work”, examining this business which performs highlt successfully in some of the world’s most competitive markets. But this isn’t just about business success, Mondragon creates true social benefit too. It provide srtong evidence in terms of both policy and practice for building a more inclusive economy. Going forward we will be at the forefront f the influencing and practical implementation of this inspiring model for social change.
Ibon Zugasti, Mondragon International Projects Manager, said:
Mondragon presents an alternative approach to fighting the structural causes of inequality. We are therefore thrilled that our work with the Young Foundatio has resulted in a compelling research report about the radical ways in which we work. It is really important that the findings of this research are used to help guide policy makers and industry towards an inclusive economy that truly works for everyone.
Ed Mayo, Secretary General of Co-operatives UK, the network fr the UK’s thousands of co-operatives said:
Mondragon is more than just a business – it offers inspiration for how we might reimagine our economy. Because it is the workers who own and control Mondragon they have a stake in what it does, a say over its direction and benefit when it does well. And it achieves all this at scale, demonstrating the contribution of worker ownership and fair pay ratios to the running of a large commercial business.