In a message dated 12/19/1998 5:43:43 PM Eastern Standard Time, [EMAIL PROTECTED] writes: << It's certainly the case that worker-managed firms don't lay off their members in downturns (very much). But--at least the last time I talked to Laura Tyson about this--she did say that it really seemed true that worker-managed firms had a very difficult time expanding in response to increased demand. But I don't know nearly as much about this as I should... >> Is that because of the scarcity of labor or because of other inputs such as capital. Worker owned firms might tend to promote scarcity of labor in the sense that a low rate of unemployment means no "reserver army". Also the notion of co-op membership and the fact that most co-operatives understand themselves as being based in a particularly community mitigates against the mobility of labor (something which has social costs of its own). One of the advantage of worker owned/managed firms is that precisely because the tend to not lay off workers, if a large enough sector of the economy they should help smooth out the swings of the business cycle. This should obviate, in part, the need to respond to sharp upswings in demand. -Paul Meyer
