Resilient Worker-Owned Coops Provide Good Jobs for the Long Term

Posted on by Fund for Democratic Committes

Next Wednesday, January 26th, F4DC is hosting the second movie in its Film Series on people building grassroots economies anchored in communities. We’ll be showing SHIFT CHANGE, a film about worker-owned cooperatives, at 6 pm at the Carousel Theatre. Click here for more info about the screening.

If you’ve looked around our website a bit, you know that we’re excited about cooperative business as a key to rebuilding the economy. Here I want to say a bit about why worker-owned cooperatives, in particular, can make a difference. On the outside, they seem to function much like conventional businesses: they sell goods and services at a price that allows them to cover their costs (rent, labor, raw materials, etc.), and then some. Like any business, they have to make a profit; otherwise they have to shut down.

It’s this question of profit—its place in the grand scheme of things—that distinguishes worker owned coops from other kinds of businesses. Because the workers themselves own the business, they don’t make business decisions simply on the basis of maximizing profit, like most conventional businesses do (and all corporations are required to do by their very charters). A worker coop’s decision-making is based on the long-term need to sustain the business in a way that keeps providing the worker-owners with good jobs. So, for example, a worker coop isn’t going to up and move to a new location where lower wages prevail.

This isn’t to say that sometimes worker coops don’t have to make tough decisions, even cutting hours, wage rates, or jobs during tight times. This has happened at lots of worker coops around the globe during the current recession. But because the workers themselves are democratically making the decisions, it’s done with an eye to the long-term well-being of the workers as a group, rather than short-term profit-taking.

It turns out that this kind of long-term thinking and democratic governance leads to worker owned businesses having better track records for economic resilience, surviving downturns in greater proportions and making faster comebacks. This has been thoroughly documented in a study (pdf) that analyzed data from 50,000 employee-owned enterprises in 17 countries.

Contrast the inherent “long-termism” of worker-owned cooperatives to the “short-termism” of corporations focused on maximizing profit for shareholders who have no connection to the day-to-day operation of a business or the community in which it exists. Down the road from us, in Rocky Mount, the closure of the Merita Interstate Brands Bakery put 286 people out of work. That’s a lot of jobs in a town the size of Rocky Mount. If you followed the news last November, this closure was part of a national strategy by Hostess, the parent company, to liquidate all its bakery holdings, throwing more than 18,000 workers out of their jobs. Initially, the company tried to blame the liquidation on striking workers, but it later came to light that the company had long planned the closures, well before any strikes took place. Furthermore, Hostess had been owned and managed by a sequence of private equity firms that had no expertise or interest in operating an ongoing bakery business. They were essentially loading the company up with debt in order to pay outrageous compensation to top executives. Oh yeah, and they raided the workers’ pension fund while they were at it.

Could the Rocky Mount bakers – the people who actually do the work of the bakery—operate their own bakery? I don’t see why not: collectively, they know how to work in and operate a bakery, and people will always need bread. Sure, some work would have to be done to develop a viable business model and some money would have to be raised, but that’s what’s involved for anyone who takes over the business. It wouldn’t be the first time workers came together to revive a failed business: former workers at Republic Windows have formed a new worker-owned business called New Era Windows. They have raised money from a broad base of community supporters and unions so they can buy the now-closed factory and its contracts.

I am still weighing whether the strategy of converting failing corporate enterprises to worker-owned businesses can succeed at scale. Some people say that such businesses tend to have been mismanaged for so long that they make for very weak beginnings that are hard to overcome. Other people say that the existence of a group of skilled workers who already know how to work together makes for a good basis for a successful enterprise. It’s probably a case-by-case kind of thing.

In any case: come on out to see SHIFT CHANGE next week, and get inspired about the potential of worker-owned coops! Whether launched from scratch or as a conversion, worker-owned businesses need to be a big part of rebuilding our local economy!

Creating a “Do It Ourselves” Economy

Posted on by Alexandria Jones

Fixing The Future

Last month, F4DC hosted a film screening of “Fixing the Future,” where movie-goers had an opportunity to travel along with David Brancaccio across the country and back again, as he talked to people who are imagining and actively building their local economies through projects like time banking, local currency and cooperative businesses.

After the film, local panelists spoke briefly about just a few of the grassroots economy efforts going on in North Carolina. We heard from the Greensboro Chapter of Slow Money, a network of people in the Triad lending and borrowing money to grow small food and agricultural businesses; Bountiful Backyards, a Durham-based worker-owned cooperative that creates edible landscapes; and Greenleaf Coffee Cooperative, a student-run coffee shop at Guilford College.

There was a dynamic energy in the room afterward as folks chatted about plans and ideas they may have mulled over for months or even years. Several people spontaneously agreed to gather to talk about how time banking might work in Greensboro. And plenty of people talked about local projects already in the works, such as the Renaissance Co-op Committee (RCC), a community led effort to develop a cooperative grocery store in Northeast Greensboro. Hope and determination came together as this community of people were reminded in just a couple of hours that WE can build the new economy ourselves.

Lets build a new economy!

The conversations didn’t stop that night. In the weeks that have followed the film screening, I’ve overheard several people talking about rebuilding our town’s economy from the ground up, and had some of these conversations myself! In fact, my husband and I just took advantage of a time bank inspired exchange this weekend. We had a morning of hands-on learning from someone in our neighborhood who’s an experienced contractor. He’s agreed to help us with a home construction project that required a fairly high skill level. We’ve offered up a few possibilities for a trade and look forward to seeing which of the options he’ll choose for his exchange.

These creative and real ideas that are taking root in places across the country because they fill a need we have to feel a sense of community. It feels good to be able to offer our skills and benefit from those of a new friend. Most importantly, we are participating in a cooperative, do-for-ourselves approach to changing our local economies.

Movie-goers at the “Fixing the Future” screening made a clear request to learn more about cooperatives. In response, we’ve decided to host another screening next month. On January 16th, we’ll show “Shift Change,” a documentary film that tells the stories of employee owned businesses that compete successfully in today’s economy while providing secure, dignified jobs in democratic workplaces.

From the birthplace of the modern cooperative movement in Mondragon, Spain to cleaning cooperatives in the Bay Area, to North Carolina’s own Bountiful Backyards and Opportunity Threads, worker-owned cooperatives are creating scalable and replicable businesses that are changing people’s relationship to their work and local and regional economies in dramatic ways. Watch the trailer and save the date of January 16th!