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The emerging cooperative counter-economy in the U.S.

photo of Michel Bauwens

Michel Bauwens
19th August 2011


Mira Luna writes in Shareable:

“While mainstream America is hoping for federal economic reform, some social justice organizations have a radically different idea, and are organizing low-income communities to build a new economy from the grassroots up. Tired of asking for change from the top down, they are taking their economy into their own hands. Social justice organizations, having a strong membership base rooted in community, are ideal spaces to cultivate alternative economic projects, as relationships of trust and solidarity have been nurtured over time through education and a history of taking action for justice. Here are some exciting examples of grassroots alternative economy projects for social justice.

Folks at the bottom of the economic pyramid are not only finding ways to individually climb the path to realizing the American Dream. They are building ladders for others and organizing to flatten the pyramid, sharing a collective dream in which no one is left out and everyone is happier because of it. It is also becoming increasingly obvious that for most poor folks, the only way up is together. What would the economy look like turned upside down? As these experiments demonstrate, it might look a lot greener, more cooperative, participatory and fair.”

Amongst the examples she cites are the following models:

“A more communal twist to entrepreneurial development is popping up across the country: worker cooperative incubation programs for low-income folks. Third Coast Workers for Cooperation, a new nonprofit in Austin, is helping start-ups through a through a mentoring and 16 week training program, the Cooperative Business Institute and Co-op for Community Development program. In their first year, it helped incubate a women’s catering cooperative called Yo Mamas, a food cart coop in Houston, and the Workers Defense Project, a construction coop. Operating on a shoestring budget, TCWC uses volunteer but experienced worker-owners and professionals with technical skills to give these new coops a much needed boost.

Green Worker Cooperatives is another social justice organization “dedicated to incubating worker-owned and environmentally friendly cooperatives in the South Bronx.” Their website states, “Our approach is a response to high unemployment and decades of environmental racism. We don’t have the luxury to wait for new alternatives. That’s why we’re creating them.” Green Worker Cooperatives offers an aggressive 80 hour coop boot camp, which includes a combination of training, coaching, and technical support like legal incorporation, graphic design, and website development. IDEPSCA, an immigrant and worker rights organization in the Los Angeles area also incubates green worker cooperatives such as Magic Cleaners, a green home cleaning service, and Native Green, a sustainable landscaping service focused on native plants.

Inspired by the Mondragon Cooperative Corporation of Spain, the Arizmendi Association of Cooperatives in the San Francisco Bay Area focuses specifically on one type of replicable restaurant. Their successful chain-like model is responsible for 125 jobs and $12 million in annual sales. Each Arizmendi Coop is autonomous, but receives training and substantial start-up funding from previous restaurants. In return, once the restaurant turns a profit, it returns some of the proceeds to the Association to seed more worker cooperatives. The restaurants share recipes, accounting, legal and other services, similar to corporate chains. True to their social justice mission, Arizmendi hired 4 out of 15 new worker-owners for their new Mission location from PODER’s membership and other Latinos from the neighborhood.

WAGES, a nonprofit that started with the mission of “promoting the social and economic wellbeing of low-income women” organizes low-income women of color to collectively own green cleaning businesses in the San Francisco bay area. Over 100 cleaners earn “50-100% more in hourly wages than before” with benefits and business equity, according to Deborah Warren and Steve Dubb in the study Growing a Green Economy for All [PDF]. As former director Hilary Abell clarified in a recent GEO article, WAGES operates on a chain model with a year-long startup phase and three years of significant nurturing. While managed intensively by WAGES in the beginning (governance, finance, administration, recruitment, training and business management) chains become more autonomous over time, allowing workers to focus on providing good service and supporting their families. They remain connected and share professional services after spinning off, and seed new coops from the profits of the collective.

With support from the City of Cleveland, University of Maryland, the Cleveland Foundation and $5.8 million dollars in grants and loans, Evergreen Cooperatives created three large worker coops focused on solar energy, industrial green laundry, and urban farming. Evergreen intentionally hires from economically disadvantaged neighborhoods, in particular people coming off welfare, recently out of jail, or having other barriers to employment. The wages are good for the laundry industry and worker-owners are expected to build equity in their businesses, which could yield $65,000 over eight years of investment. One of Evergreen’s coops, Green City Grower Cooperatives, has acquired 10 acres of urban farmland, a packing building, offices, green energy, and the “largest urban food-producing greenhouse in the country” in an area that could be called a health food desert. Crucial to the success of their cooperative start-ups is a revolving loan fund, the Evergreen Cooperative Development Fund, supported by 10% of their cooperatives’ annual pretax profits, reports Warren and Dubb. Being part of a larger, successful association also helps secure business loans, which can be difficult for coops.n

Other cities with skyrocketing employment such as Richmond, California are showing interest in emulating Evergreen and Mondragon. The Mayor of Richmond recently went to Spain for a study tour of Mondragon and hired a Coop Developer for her office. Worker coops are increasingly seen by legislators as being a serious avenue for long-term, local job creation.

Since worker coops are owned and managed by workers, there’s no worker exploitation, excessive executive pay, or outsized investor payouts. Therefore, worker coops can provide more stable, living wage jobs with benefits and equity than conventionally-modeled businesses, according to the Canadian Ministry of Industry and Commerce. Coops can adjust salaries in lean years, typically have flexible and favorable long-term financing, and are less likely to lay off or close up shop for the sake of profits. They are also more likely to take care of the local environment and their patrons because they need community support to survive.

However, as PODER’s members quickly realized, without initial support from nonprofits, government or foundations, starting a worker coop can be an overwhelming, almost impossible challenge. The long-term benefits of these social justice missions are clear. Local governments and community foundations need to step up to the plate and support these social justice organizations’ new and innovative job creation model.”

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