To Jumpstart Job Market, Turn Workers into Owners
Dan Clore
http://groups.yahoo.com/group/smygo
http://tinyurl.com/yzc8kml
To jumpstart US job market, turn workers into owners
Many Americans build wealth through their home. Why not through work?
By Melissa Hoover and Beadsie Woo
January 11, 2010 at 11:30 am EST
San Francisco and Baltimore �
Seldom do the United Steelworkers, the United Nations, and film director
Michael Moore express the same idea at the same time. But all have, in
their own way, promoted the benefits of cooperative businesses in recent
months.
The Steelworkers Union, North America�s largest industrial union, has
signed an agreement with a 100,000-member European co-op to help workers
here gain an ownership stake in their workplace.
Just last month, the UN declared 2012 the International Year of
Cooperatives. It�s urging governments worldwide to collaborate with the
co-op movement to reduce poverty and create more productive societies.
And Michael Moore sent a valentine to the co-op movement in his latest
film, �Capitalism: A Love Story.� As a form of economic democracy, he
said in an interview, co-ops are �the patriotic thing to do.�
In hard times like these, the co-op model makes sense. After all, public
confidence in corporations, banks, and the larger financial system is at
low ebb, while unemployment is at its highest level in 25 years.
Homeownership, historically a reliable way to build equity, has been
rocked by foreclosures. People are looking for other ways to do business
and save money.
Turning workers into investors isn�t new. We�re all familiar with
dot-com employees whose vested stock options turned them into overnight
millionaires. And Employee Stock Ownership Plans have long allowed
workers to invest in their companies. But worker-owned co-ops are unique
because employees own 100 percent of the business, so they have a voice
in how it�s run.
Many people think of co-ops as the hippie-dippy grocery store that sells
organic goods. In fact, a 2009 study by the University of Wisconsin
Center for Cooperatives found more than 29,000 cooperatives in the US,
which make $500 billion in annual revenue, support 83,000 people, and
pay $25 billion in wages and benefits. They include national firms such
as credit unions, and local businesses such as the Alvarado Street
Bakery in Petaluma, Calif., or the Evergreen Cooperative Laundry in
Cleveland.
Cleaning ladies in the San Francisco area and home-care workers in New
York have banded to pool resources as worker-owners of profitable
enterprises. White-collar workers are getting involved, too: One of the
most successful cooperatives is Isthmus Engineering, a Wisconsin firm
where engineers bought the company from its owner.
For low-wage workers, owning a business cooperatively can play a
particularly important role in helping them climb out of poverty and
build savings. Cooperative Home Care Associates in New York�s South
Bronx, for instance, lets its 1,600 members save money toward a $1,000
stake in the co-op, entitling them to annual dividends. The business
offers them affordable health insurance, retirement plans, and other
benefits.
In America, most families build wealth by buying homes, investing in
businesses, or putting money into employer-sponsored retirement
accounts. The federal government subsidizes this wealth-building to the
tune of $367 billion a year. But most low-income families don�t have the
money to buy a house or start a business. And they don�t have jobs that
come with 401(k) plans. Many of those who stretched to buy a house this
decade have lost their homes or their equity.
It was mass unemployment and widespread poverty in Spain�s Basque region
that spurred the creation of the Mondragon co-op in the 1950s. Today
it�s the region�s economic engine, with more than 100,000 workers. At
Mondragon, workers make the investment and the decisions. They share the
profits and the risk. The Steelworkers say the co-op structure empowers
workers and makes business more accountable. It envisions converting an
existing site or starting new ventures, a natural extension of the
union�s role in giving workers a voice with owners. Except this time,
the workers would also be the owners.
There is plenty America can do to help cooperative businesses flourish.
The Small Business Administration could make clear that it guarantees
loans to worker co-ops. Congress could set aside money for an urban
co-op development initiative as it does now for rural cooperatives.
State and local governments could provide tax breaks and loans to co-ops
that create new jobs. They could also fund an employee-ownership bank to
support these ventures. Charitable groups, too, could help develop and
expand the co-op model as a strategic approach to creating jobs and
building assets for working families.
A model based on human values rather than the unbridled pursuit of
profit might be just what we need to create jobs, rebuild wealth, and
support our communities. Keep your eye on co-ops.
Melissa Hoover is executive director of the US Federation of Worker
Cooperatives. Lillian �Beadsie� Woo is a senior associate at the Annie
E. Casey Foundation in Baltimore.
--
Dan Clore
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