On a recent rainy Brooklyn morning, the New York City Council member Antonio Reynoso met with stakeholders for a strategic meeting on how to make worker cooperatives a larger part of the New York economy. The meeting room brimmed with enthusiasm as members of the NYC Network of Worker Cooperatives and Boris Santos of Reynoso’s office laid out the strategy for future cooperative development in New York City – the country’s first city to allocate a portion of its budget to cooperative development.
Cooperatives are collectively managed enterprises; an organizational model where proceeds from the business are distributed directly to the employees, who are also the owners. While, primarily member based, cooperatives can still have employees who can undergo the process of becoming a member. There are multiple types of cooperatives (consumer owned, producer owned, worker owned, purchasing and hybrid cooperatives), and each one is managed differently. Generally, cooperatives are democratically governed by an elected board and use a system of one-member/one-vote, not one-vote-per-share. This helps them to serve common interests and ensure that people, not capital, control the organization. Profits among their member-owners are shared on the basis of their contribution to the organization, not on how many shares they hold.
New York City supports the cooperative initiative with the idea of developing a strong local economy that works for all New Yorkers. Center for Community Change conducted a report that captured grim data on ever growing income inequality, wealth concentration and, stagnant wages in the U.S. Among the middle class, debt-income ratio reached its highest level in 24 years, as of 2007, three quarters of all wealth are held by top 10% and, since 2009, 93% of real income growth has been captured by the top 1% of earners. Globally, the Oxfam report tells us that 85 individuals own as much as half the world. Cooperatives are organizational structures that allow for more equitable and therefore, more humane profit sharing.
While traditional capitalism can fetishize its CEOs, the great variety of work that allows the work of a CEO is grossly devalued. As Miya Tokumitsu, lecturer in art history at the University of Melbourne, noted using Steve Jobs as an example, “Think of the great variety of work that allowed Jobs to spend even one day as CEO: food harvested from fields, then transported across great distances. His company’s goods assembled, packaged, shipped. Apple advertisements scripted, cast, filmed. Lawsuits processed. Office wastebaskets emptied and ink cartridges filled. Job creation goes both ways.” There are many examples of successful companies (Ocean Spray, Organic Valley, REI, Cooperative Home Care Associates and so forth) that are either organized as coops or have developed other structures for nonhierarchical management (e.g. The Morning Star). The global cooperative movement counts 800 million members in 85 countries, in every industrial sector. This speaks to the importance of cultivating leadership and entrepreneurial spirit among employees both of which, as numbers testify, abound.
Jennifer Welles, cooperative developer at the Northern Manhattan Improvement Corporation, states that every time an open house is organized to recruit new cooperative members, they get an overwhelming response from community members. Similarly, other coop developing organizations like The Working World or Center for Family Life, both located in NYC, report the same experiences. Federation of Protestant Welfare Agencies (FPWA) and Solidarity Economy Research Project (SERP) surveyed the cooperative sector in NYC and found that: the creation of surviving worker cooperatives has intensified since 2008; 99% of worker owners are women and; its total contribution to the NYC economy is $83 million in payroll and $125 million in total output. These coops are mostly in the service sector, followed by food and accommodation and, data, publishing, and media.
The cooperative movement demonstrates that while low wage work is on the raise, coops can secure stable employment in high turnover industries. Cooperatives are providing flexibility, benefits and opportunities for advancement and, improved services through consistent and well-trained workforce.
A case study done by the Aspen Institute on the Cooperative Home Care Associates (CHCA) from the Bronx, reveals that a coop in this industry will need a greater starting capital than a regular corporation. Big chains in the home care market become profitable fast by paying their workers very little and not giving out any benefits. Thus, almost 50% of these workers have to rely on public benefits, including food stamps, Medicaid and other types of assistance. In other words, many low wage work, in order to keep the corporations profitable and CEOs taken care of, is paid for by the taxpayer.
In addition to staggering economic inequality, another pervasive malady we’re facing, in the U.S. and abroad, is the rising level of unhappiness. George Monbiot, writer and investigative journalist, eloquently wonders, “What greater indictment of a system could there be than an epidemic of mental illness? Yet, plagues of anxiety, stress, depression, social phobia, eating disorders, self-harm and loneliness now strike people down all over the world.“ Could the desperate working world possibly reach its peak levels of productivity? Another important trait of cooperatives is that they’re not just about job creation but also about giving people hope and dignity through regaining control over their workplaces and consequently, over their lives. It’s the sense of personal value and confidence that is naturally nurtured within a cooperative. Every member becomes an entrepreneur, risk-taker and visionary. In recent years, Pope Francis, as many other spiritual authorities, argued that setting up money as the ultimate good inevitably deforms our spiritual and human nature. Cooperatives promise a balance of social and spiritual values with those of commerce.
It is certainly not suggested here that cooperatives are a panacea to cure our entire socio-economic system. However, at this critical time, when human rights standards are in steep decline and we’re facing an environmental disaster, cooperatives are a viable basis to reorient our economy. Cooperative movement is the largest grassroots movement in the world, humbly and steadily changing the face of economic inequality and dehumanization at workplace. Cooperatives are scalable enterprises and, though originally thought of as tools for upward mobility, there’s no reason startups shouldn’t be organized as coops.
About the author: Katarina Spasic, social justice activist, founder of Bikes&Humans Cooperative and member of the Leadership Council with the NYC Network of Worker Cooperatives.