Why do we talk so much about pies? Slice of the pie, bigger pie, make our own pies, pie chart, etc. Why do we talk about pies and not talk about fish when it comes to sharing?
Pies are not natural. They are simple, easy to divide, relatively uniform whether in a circle or a box, and they make good charts and graphs. Some of the discussion about the economy and economic justice is about pies and dividing things equally. Some folks propose that the current social division of goods and services or even income and wealth, should be redone so everyone gets the same or a fair amount. This redistribution discussion quickly brings up the challenge of some people who don’t want to give up something so that other people can get something that often the folks who have to give up something think they don’t deserve. It is called a zero-sum-game where getting something means someone else losing the same amount. Those who do fairly well with the status quo are afraid of those who are disadvantaged taking something away from them. Pies get us in trouble.
Economic participation is more like fish than pies. It is complex and hard to divide fairly—who gets the head, who gets the fins, who gets the filets and who consistently gets only the fish guts?
We are much better off talking about folks catching their own fish for themselves rather than trying to divide something so complex. But, that brings me to the “great fish lie”. You have all heard it: “Give a person a fish, they eat for a day, teach a person to fish, they eat for a lifetime.” It’s vicious lie. I used to tell it myself, until I thought long and hard about it and did some research. It became clear to me that just knowing how to fish was insufficient. Knowing how to fish will not feed you at all. You have to also have access to a water hole – lake, ocean, river or stream — someplace where fish can be found – and even then, you needed access to some fishing stuff. We can hardly catch fish with our bare hands. We need a pole and line, hook, bait, sinker, float, or some such maybe even less, but still some tools and equipment suited to the fish we want to catch. The idea that knowing how to fish would feed you rang hollow and useless when we live in a world where knowing stuff is relatively easy, but gaining access to the things we need to be productive can be quite difficult. It is another way of blaming people for being poor and hungry because they won’t learn about fishing.
Aaron Dawson and Joe Marraffino of the Democracy at Work Networkspoke to members of emerging Occupy Wall Street cooperatives last weekend about the nuts and bolts of worker cooperative finance, governance and law.The emerging cooperatives are groups that rose to meet the needs of the movement and operated democratically out of principle.Now looking to the next phase of development, the groups were looking for some practical tips.The groups included the Occupy Kitchen, as well as Screen printing and Printing groups, and are supported by the Worker Co-operative Working Group. Other conversationsbetween the Occupy and worker cooperative communities have happened in Oakland, and a statement of support made by the U.S. Federation of Worker Cooperatives.
Following the presentation was a panel of worker-owners to talk about their experiences, including
Indyreader: Do you want to talk about your cooperative?
Ben: Sure, so my cooperative is called Quilted. We're five people. One on the East Coast in Boston and four on the West Coast in Berkeley. We do web development for social justice organizations, small businesses, and other worker cooperatives. We started in 2007 and before that we had been a sort of loose collection of freelancers for about three years, since 2005. And in 2007, we sort of decided to take the plunge and actually remove all the barriers that are … the sort of paperwork barriers around subcontracting to each other that being independent contractors has. So, we were like, let's just incorporate. That way we can work together more easily and collaborate as a default, rather than as an exception.
Joshua: We are a worker-owned and operated collective of dog walkers and pet care professionals in: Washington D.C., Baltimore, and New York City.
Indyreader: For you and your business, what is the importance of worker-owned and operated businesses?
Joshua: I mean I could probably say that there's this broader political vision and whatnot. But even if I didn't have faith in that,I would say... that just on an ethical level -I don't think I would be able to look myself in the mirror, [while] extracting value from other people's labor.I think that the only way to engage in entrepreneurial sorts of endeavors, assuming that someone doesn't want to be a wage slave somewhere as an employee, the only way to do that entrepreneurial sort of thing, is on equal footing with other people in collaboration, a spirit of mutuality, and cooperation.
As the Women of Color Policy Network discussed in our First to Fall, Last to Climb Policy Brief, African-Americans and Latinos are more likely to currently be represented in low-wage and service jobs. The face of worker-owned co-operatives in America is shifting to reflect more women, communities of color and multilingual populations. These innovative business structures provide an innovative path to wealth accumulation. They also often recognize the need for childcare and health benefits of their workers-- essential components of occupational support for families and many women workers. Greater emergence of co-operatives also creates a need for banking arrangements that can accommodate and support businesses with many owners. Many co-operatives turn to credit unions for their banking needs. As American cities strive to overcome the residual impacts of the recession, worker-owned co-operatives present an attractive alternative to conventional top-down models of job growth and business development.
The four members of Liberty Ship Café will launch their cooperative business in January and fulfill a self-pledge for autonomy. When sisters Gloria and Rosa Menjivar came to the Bay Area six years ago, supporting family back in their native El Salvador was top priority. Since then, their focus has shifted to raising family here and working to empower their East Bay community in volunteering at the Richmond Latina Center. For Rosa, shared ownership of the Liberty Ship Café is key: "This is not just about making money," says Rosa. "This cooperative is the chance to be empowered in our life choices and to give good food to our community." Still, as single mothers whose English is at base-level, this journey is a struggle; for them, the success of this business in which they set the rules is essential.
Co-op members have been preparing for business start-up for over a year by engaging in small business and food service trainings and cooperative education sessions. Members meet weekly to develop their business plan and test recipes.
The members of Liberty Ship Café are giving their all to developing the business that will best serve the needs of their community, but raising enough money by selling in a low-income food desert area is a challenging process. Unless the project receives outside funding, it is unlikely that the café will be able to purchase the truck in the near future. Your donation will go directly towards the down payment on the mobile food truck that will allow the members to serve their community and have sufficient income to support themselves and their families with dignity. Any amount helps!
Liberty Ship Café is part of a worker co-op incubator project that CCCD is developing in Richmond. The city has an unemployment rate more than 17 percent; the incubator will develop worker cooperatives to create employment, job security, and improved livelihoods.
NCBA has developed the official US website for the International Year of Cooperatives. Visit www.usa2012.coop for news and resources specifically for celebrating in the US, including a toolkit to support your local activities.
"In the age of unemployment, downsizing, and outsourcing, where can a poor soul find a job? Well, maybe it’s time we create our own. Self-employment is an option and can seem freeing, but it’s hard to do everything yourself and find time for a non-work life. The worker coop is an alternative to the isolation of self-employment and the exploitation of traditional jobs.
"Coop-made-in-USA is a pamphlet that covers the cooperative movement in the United States with examples of co-op realties and explanation of organizations and governance methods used in various co-ops.
Worker' Cooperatives as an organizational alternative: Challenges, achievements and promise in organizational governance and ownership
Iñaki Santa Cruz. Economics and Business Studies. Autonomous University of Barcelona. (Spain)
Elías Nazareno. History. Universidade Federal de Goiás. (Brazil)
George Cheney. Communication Studies, Kent State University (United States)
Within the context of the present crisis, there is great interest in experimentation with alternative organizational forms which can both respond to the challenges of today's economy and restore equilibrium through a renewed call to social values. In particular, worker ownership and governance are gaining attention in a variety of forms and regions. Worker-owned-and-governed cooperatives typically pursue both economic viability and strong forms of participation; further, they are closely tied to community economic and social development.
Seeing these multiple objectives as intertwined, compatible, and in fact necessary is central to the call for the 2012 United Nations' International Year of the Cooperative, which seeks to highlight the contribution of cooperatives to social and economic development through generating employment, reducing poverty, and fostering social integration.
Perhaps the most famous contemporary case of worker cooperative organization which achieves the multiple goals described above is the Mondragon Cooperative Group (MCG), one of the largest, long-lived, and successful examples of workers' owned organizations in the entire world. Mondragon has a remarkable record of financial success and the provision of sound and stable labour conditions. Founded in 1956, the Basque cooperatives now employ almost 100,000 members, are represented in more than a dozen countries, and are the focus of ongoing scrutiny, praise, and critique. While the well-known wage differential has grown somewhat over the years within the system, it remains quite narrow by almost any comparison, even when a number of top-level salaries that are pegged to the market are taken into account. Amidst the current economic downturn which has resulted in over 20% unemployment in Spain and approximately 13% in the Basque Country, the Mondragon co-ops have relied on their historic principles of democracy, equality, solidarity, and participation as fundamental parts of their management strategy. While 24% of Spanish companies have closed down during this severe recession, the MCG only had to close down one of the 120 cooperatives which form the group, and relocate the 35 workers into other companies. In fact, there is significant evidence of increased democratization in the FAGOR Group, the original industrial cooperatives and the heart of the system. For all these reasons, now is an important moment for attention to the distinctive characteristics of these cooperatives as well as their lessons for other socially inspired management, organizational, and market models. The MCG represents but one case; however, given its rich history, diverse characteristics, encounters with globalization, and experimentation in new forms of participation now underway, it provides an extremely important point of reference in any comprehensive examination of worker cooperatives today.
"The Insight Center works to improve job quality through a variety of ways including providing legal, organizational, resource-development, and other types of assistance to local communities to form community assets, such as a worker-owned cooperative - a business owned and democratically controlled by its workers. Worker-owned cooperatives are an important strategy to improve job quality, help transitional workers and limited-English-proficient speakers to enter the workforce, and help build community assets. We have provided legal, organizational, and business planning services to many cooperatives, including WAGES and EcoBay Landscaping LLC, both based in Oakland.
A grassroots group of community residents, most of whom spoke only limited English, were the founders of the emerging worker cooperative. We worked with the core members in Spanish to develop a vision, a business plan, a marketing plan, and an organizational structure for the cooperative. They became incorporated as a limited liability corporation, one of the most flexible business structures and the most appropriate for a recent immigrant cooperative. An instrumental part of our role in this work was to establish ongoing partnerships between the cooperative's core members and local Spanish-speaking technical resource providers, including a business lawyer, the Rhode Island Small Business Development Center, and the ICA Group - a Massachusetts-based organization that supports worker cooperatives and employee-owned businesses.
By May 2006 The Labor Co-op LLC secured loans from the City of Providence, the State of Rhode Island, and the LEAF fund. It also arranged for a local benefactor to serve as a loan guarantor. Finally, with all legal, licensing, structural, and finance questions settled, the cooperative opened for business during the first week of June 2006, providing temporary staffing services. The cooperative immediately signed two contracts with companies contacted during the creation of the marketing plan. By August 2006 they began to add provisional members and to sign additional contracts with companies wanting staffing services. As of September 2006, the Labor Co-op had 19 provisional members in addition to the eight founding members. Most were working full-time as part of the cooperative."
Some 130 million Americans, for example, now participate in the ownership of co-op businesses and credit unions. More than 13 million Americans have become worker-owners of more than 11,000 employee-owned companies, six million more than belong to private-sector unions.
And worker-owned companies make a difference. In Cleveland, for instance, an integrated group of worker-owned companies, supported in part by the purchasing power of large hospitals and universities, has taken the lead in local solar-panel installation, “green” institutional laundry services and a commercial hydroponic greenhouse capable of producing more than three million heads of lettuce a year.
Mandela Foods Cooperative grocery store is a catalyst for change that seeks to transform a neglected neighborhood into a dynamic, healthy and prosperous community for the benefit of residents, employees, commuters and local farmers. Currently operating a 2,200 sq. ft. grocery store and nutrition education center at Mandela Gateway, the cooperative seeks a General Manager to work with our team to take Mandela Foods to new heights. The right candidate will thrive on challenge and seek to grow with the organization as it expands.
The General Manager will be accountable for all aspects of store operations to increase and expand its net operations using cooperative business practices. GM responsibilities include retail hiring, training, coordinating marketing events and outreach for the store; merchandising, operations, staff development and management, customer service, store maintenance, safety, systems, profit & loss, inventory.
The U.N. has declared 2012 the International Year of Cooperatives. This only adds to the imperative for exploring the many ways that worker-managed factories and enterprises can be seen as an alternative to traditional capitalist firms and companies. Cooperatives as worker-managed enterprises, for a number of institutional and societal reasons, represent alternative productive vehicles attempting to override the impact of deindustrialization, globalization, and the neoliberal ideological offensive. The social economy and solidarity relationships, represented by worker-managed enterprises, need to be examined as focal points for working-class and middle-class capacities to sustain the possibilities of a productive worker-centered culture. This has become ever more urgent given the shrinkage of labor union density, especially the decline of private-sector organized workers. Worker-managed factories and enterprises are called for particularly at this moment with the declining industrial base of the American working class. Perhaps upward of 25% of the American industrial heartland lies idle with the potential for unemployed workers to create cooperatives and other self-managed enterprises to fill that vacuum. But they need not be limited to laborers. The large bulk of the American working class find themselves in the services, in commerce, and among contingent workers, subcontracted workers, and immigrant workers. All of these groups deserve the benefits and entitlements that capital-labor reorganization would provide them.
Advisory group member John McReynolds opened the discussion that centered on how a cooperative business could help redevelop the economic foundation of Lompoc, which has an unemployment rate greater than 16 percent, reportedly the highest in the county.
Speakers E. Kim Coontz, executive director of the California Center for Cooperative Development (CCCD), and Luis Sierra, assistant director, outlined the process of establishing a co-op in Lompoc, and gave updates on the plan created by the Lompoc Cooperative Advisory Group. The CCCD, which is based in Davis, is a nonprofit association that provides education and training on several types of cooperatives. It defines a cooperative as “an organization that is owned and controlled by the people who use its products, supplies and/or services.”
The Lompoc Cooperative Advisory Group is headed by former Lompoc City Councilman Bill Mullins. The seven-member group raised money for its membership in the CCCD by doing fundraisers, and has been working with the agency for almost a year.CCCD membership will include grant-writing services and other guidance.
Colorado attorney Linda Phillips provides an overview of the worker cooperative as a business model, including how these cooperatives are formed and tax advantages.Via the Rocky Mountain Employee Ownership Center.
1) the business is operated at cost by adjusting prices or by returning net margins on a patronage basis to members and patrons;
2) dividends on stock or interest on equity capital are limited;
3) voting rights are limited to members of the cooperative;
4) business is carried on for the mutual benefit of the members; and
5) members are not liable for any debt, obligation, or liability of the cooperative.
In lay terms, a cooperative is an organization formed by a group of people, for their mutual benefit, and with a common purpose, such as group marketing activities, group purchasing, or as the employee–owners of a company. A cooperative is an organization where the members have a say in the governance of the company and is, in some ways, similar to a family-owned business.
A worker cooperative has all of the characteristics mentioned above, but it is formed and operated by the employees of a company for their mutual benefit—essentially jobs. Worker cooperatives are located throughout the United States, from Massachusetts to California and from Minnesota to Texas. The employees democratically control the management and operations of the company, with each employee–owner having an equal vote. These cooperatives may be formed in Colorado under Article 56 of Title 7, because the statutes allow formation of a cooperative for any business purpose. The 2011 Colorado Legislature passed a new cooperative statute called the Uniform Limited Cooperative Association Act (ULCAA), which would also allow formation of a worker cooperative.
In a solidarity economy, our needs are met by exchanging goods, services, resources, and knowledge in ways that advance core values of justice, democracy, cooperation, and ecological sustainability. Portraits of the Solidarity Economy is a film series exploring the stories and motivations of New York City's solidarity economy leaders. You can view a map of solidarity organizations and enterprises in NYC and access additional resources at solidaritynyc.org.
Produced by Caroline Woolard, Cheyenna Weber, and Michael Johnson of SolidarityNYC. Photographed by Alex Mallis. Edited by Iva Radivojevich. Music by Michael Rosen.
Collaborative — Practitioners from various modalities work together toward a client’s optimum health. We will be working with members of the local community to form a Community Advisory Board as well as help shape workshops on health and well-being that reflect the community’s needs.
We invite you to read more about our philosophy and ethics:
JUAN GONZALEZ: I want to ask you—2012 was declared recently by the United Nations to be the year of co-operatives. Can you speak to alternative democratic models that might be brought into play and might have some impact on where the economies of the U.S. and Europe are heading?
RICHARD WOLFF: Yeah. I think that we’re going to see a lot of interest, because of the U.N., but for many other reasons. This is a system that isn’t working, the traditional enterprise that we have in the United States. Shareholders, usually a few that own the bulk of the shares, select a board of directors, 15 to 20 people who make all the decisions. They’ve made those decisions—where to invest, how to invest, what to do with the profits. And here we are with the results: high unemployment, economies in collapse, bailouts needed almost on a regular basis. I think more and more people are beginning to recognize we need fundamental change.
And one of the models of an alternative would be a different way to organize a store, an office, a factory. And instead of a top-down, conventional, shareholder-driven entity, why not bring, as we say—and in your program, in particular, it would be appropriate—why not bring some democracy to the enterprise? Why not try to let the people in each enterprise make these decisions democratically and collectively, both within their enterprise and with the communities that are interdependent with these enterprises? Let’s start from that.
And, you know, think a minute with me. If the workers themselves made the decision, would they move the factory out of the country as quickly as we see capitalist enterprises do? I don’t think so. Would they use dangerous technologies that are toxic? Not likely, because they live with it, and so do their children, right there. The decision isn’t made by a board of directors thousands of miles away. And would they use the profits in a more socially useful way that benefits everybody? Well, they are everybody. That’s what democracy means. And I think we would see a lot less speculation, a lot less of the problems that have gotten us to the impasse now, if we were open enough as a society to look at alternative ways of organizing our business and make our commitment to democracy mean something, not just in the communities where we live, but in the workplaces where we spend most of our adult lives.
Where a hot dog stand now is the main lunchtime option for city workers in this distressed Bay Area town, soon they'll be able to choose from steel-cut oatmeal, goat cheese empanadas and white bean and kale stew, prepared in a mobile cafe. Its owners will share in the decision-making — and any profits. Richmond Solar has trained needy residents to work as green-energy installers and now aims to transform some into bosses by forming a worker-owned cooperative The city's first bicycle shop has opened with similar dreams: Young men who have volunteered to learn the repair trade soon may be elevated to co-owners. "I'm just gonna ride it out with everyone to get where we need to go," Mercedes Burnell, 19, said ashe prepared to replace a crankshaft and pedals at Richmond SPOKES.
The flurry of democratic enterprise has been guided by Mayor Gayle McLaughlin, a former schoolteacher who visited Mondragon, Spain, and recognized a possible path out of the poverty and unemployment that plague her city. The Basque hill town is dominated by Mondragon Corp., a web of cooperatives that employ 83,000 workers and together represent Spain's seventh-largest business. Co-op clusters based on Mondragon's model have emerged in Cleveland and the Bronx, N.Y., among other cities. Richmond, with a 16% unemployment rate, hopes to follow suit.
Anger over big banks’ announced plan to charge for debit card use combined with the energy behind the Occupy Movement fueled the successful Move Your Money campaign that culminated on November 5th with Bank Transfer Day. The campaign resulted in approximately 700,000 new members depositing $4.5b into credit unions across the country since September. It’s been estimated that this brings the total assets held by US credit unions to surpass $1 trillion. While credit unions may have been a passive participant in the battle between an enraged public and big Wall Street banks, with this new influx of financial capital and a membership base exceeding 91 million they are now in a powerful position to strategically support the new progressive movement for a more sustainable economy.
The opportunity now exists to better articulate the connection between credit unions as cooperative businesses owned by the members and the need for them to invest more heavily in the growing cooperative business sector. Worker-owned businesses are not only an economically viable solution, but also a necessary one for addressing the massive wealth disparity present in our economy. They help build local wealth by retaining more of their profits within a community. Coops also place a high value on social capital by creating stable, living wage jobs and establishing workplaces that value the contributions of all workers. This business model will be gaining much more international attention over the next year, thanks to the UN’s 2012 International Year of Cooperatives campaign that highlights the positive economic contributions of cooperatives.
The Global Launch of the International Year of Cooperatives was mandated by the United Nations General Assembly in its resolution 65/184. The International Year of Cooperatives is intended to raise public awareness of the invaluable contributions of cooperative enterprises to poverty reduction, employment generation and social integration. The Year will also highlight the strengths of the cooperative business model as an alternative means of doing business and furthering socioeconomic development.
While employee-owned companies have generally outperformed their conventional competitors, there have been a number of highly publicized failures of majority employee-owned firms. Hyatt Clark, Rath Packing, Seymour Specialty Wire, and the plywood cooperatives in the Pacific Northwest quickly come to mind.
Employee ownership failed to survive in some Ohio ESOPs as well. Commercial Lovelace, a Columbus-based 51% employee-owned trucking firm went out of business in the aftermath of deregulation. Republic Hose, an industrial hose producer in Youngstown that was 100% owned by management and employees through conventional stock ownership, was sold but shut down by the buyer (the American subsidiary of Sweden's Trelleborg Rubber). North Coast Brass, a 100% ESOP brass and copper rolling mill in Cleveland, shut its doors in 1990 after two years of employee ownership, but was reopened under conventional ownership by a Korean firm. Mansfield Ferrous Castings, a 100% ESOP foundry, was sold during troubled times by the employees but continued to operate as a conventionally organized firm after the purchase. A similar transaction permitted the financially troubled Ironton Iron to continue operating, and the employees even retained some ownership rights.
Thus in three of these five Ohio cases, employee ownership saved jobs that otherwise would have been lost. In addition, in Ironton, hundreds of new jobs were created. In these situations, employee ownership proved to be a transitional phase between conventional owners. But the fact remains that employee ownership as an alternative was ultimately unsuccessful in all of these companies.