Co-operatives create 8,000 new jobs while unemployment hits record in Spain

At a time when more then six million people are unemployed across Spain, co-operatives have managed to not only maintain, but also increase the number of jobs by...

At a time when more then six million people are unemployed across Spain, co-operatives have managed to not only maintain, but also increase the number of jobs by 7.2 percent in the third quarter of 2012.

By contrast, the unemployment rate in Spain has reached 27.2 per cent, the highest since 1976. Although it has recently slowed, the unemployment rate has continued to increase ever since the crisis emerged in 2008. In mid-2007 the rate reached 7.9 percent.

Figures released by the Spanish Ministry for Employment confirm that co-operatives have created 8,000 new jobs in the first half of 2012.

According to the Spanish Confederation of Workers Co-operatives (COCETA), employment figures in worker co-operatives doubled in the first half of 2012, compared to the previous year. More than 250,000 people work in 17,000 co-operatives.

Juan Antonio Pedreño, President of COCETA, said: “This clearly shows that worker co-operatives are an important option when it comes to creating jobs that governments should value in order to help local economies.”

Mr Pedreño also said that social economy enterprises are the best example of job creation: “We continue to argue that this is always the case, but that during crisis co-operatives show they are capable to create new jobs, while other enterprise models are destroying them; and this happens even though co-ops do not enjoy the same access to finance”.

Following on from the growth of co-operatives, the Spanish Ministry of Employment and Social Security has joined efforts with the Spanish Enterprise Confederation of the Social Economy (CEPES) to launch a strategy to boost entrepreneurship and youth employment. Last week, CEPES agreed to play a key role in the implementation of the three-year strategy.

More than half of young people aged under 25 seeking employment cannot find a job and more than 35 per cent of young people currently unemployed have been in this situation for over a year.

Co-operatives are a key element in this strategy; the Ministry is seeking to encourage more young people to start their own social enterprises and co-operatives. With this strategy, unemployment benefits may be used to make a capital contribution to any type of newly created business, included co-operatives. Adopted in February, the strategy has already generated 20,454 jobs for young people across Spain, who are now registered as self-employed.

The strategy acknowledges that co-operatives have shown a greater ability to maintain employment during the years of economic crisis due to their internal flexibility mechanisms.

The best example is the case of Mondragon Corporation, which is employing 83,000 people. The corporation has coped relatively well with the financial and economic crisis. Mutual support and joint action as well as an efficient crisis management through support institutions and business-to-business co-operation were key elements to Mondragon’s successful approach to the crisis.

Mikel Lezamiz, Mondragon’s Co-operative Development Manager, explained why Mondragon's policies have been successful: “We are passing cash within co-ops in order to solve the lack of liquidity. We are also buying together. Inter-co-operation is the most important feature of Mondragon.”

Mondragon has also passed workers from some co-ops to others in order to avoid making staff redundant. Since workers or employees are directly involved in the decision making, it is less likely for them to cut jobs, said Mr Lezamiz. 

According to COCETA, 80 per cent of those that form a co-operative have a permanent job, because they become members of that co-operative.

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