Solving Income Inequality

An increasing number of workers and business owners are looking to the town of Mondragon in the Basque region of Spain as a model to tackle the problem of wealth and income inequality. The town is home to the world’s largest worker cooperative network, and these coops have found a way to keep unemployment and income inequality in check. It is a system of about 100 cooperatives in which the owners and workers set their own salaries in an annual vote, and managers can only earn six times more than the lowest paid worker. Everyone also receives a proportionate share of their company’s yearly profits. 
“The objective of the cooperative is not to produce rich people, but to produce rich societies,” says Igor Herrarte, who works making solar panels. “We don’t have a lot of rich people, but on the other hand, we also don’t have any poor people.” Employee ownership attacks inequality at its roots by giving individuals the opportunity to acquire wealth and assets. The profit-sharing allows workers to build up enough savings to buy a good home, and to retire with security. It’s a concept that is attracting growing interest from businesses in the US, UK and Western Europe.