NYC Allocates $1.2 Million to Sponsor Worker Cooperatives

TRNN discusses with Project Equity co-founder Hilary Abell and organizer Kali Akuno about whether worker cooperatives are the answer to getting New Yorkers out of poverty

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Story Transcript

JESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore.

Supporters of worker cooperatives in New York City are celebrating a major victory. The city’s council will allocate $1.2 billion towards worker-owned cooperative businesses this year. It’s the largest contribution a municipal government is ever made in that sector, and advocates are hoping this will start a trend nationwide.

Now joining us to get into this topic are our two guests.

We have Hilary Abell. She is the cofounder of Project Equity, a nonprofit that builds economic resiliency in low-income communities by increasing worker ownership. She recently authored a white paper called Worker Cooperatives: Pathways to Scale.

And also joining us, from Jackson, Mississippi, is our guest Kali Akuno. He is an organizer with the Malcolm X Grassroots Movement.

Thank you both for joining us.

KALI AKUNO, ORGANIZER, MALCOLM X GRASSROOTS MOVEMENT: Thank you.

HILARY ABELL, COFOUNDER, PROJECT EQUITY: Thank you, Jessica.

DESVARIEUX: So, Hilary, I’m going to start off with you. The city plans to launch 28 new cooperatives and help grow 20 existing cooperatives. This could mean the creation of 234 new jobs. Break down for us with a specific example of how these New York City cooperatives actually work.

ABELL: Well, Jessica, a cooperative is a business that’s owned and controlled by its members. And this movement and this allocation of funds from the city is about worker-owned cooperatives. So these would be businesses where the people who work in them actually own them and have democratic control over the businesses.

One example in New York City is actually the largest worker cooperative in the country. It’s called Cooperative Home Care Associates in the Bronx. And it’s been around for some 25 or 30 years. It has 2,300 employees, and the vast majority of them are actually worker-owners. They’re Latina and African American women living in the Bronx in Manhattan. And they have created a company that is leader in its industry. Their pay and their benefits are slightly above market. You know, it’s a difficult industry, because it’s a very low-wage industry, but Cooperative Home Care Associates has not only created a company where–when you walk in the door you feel the dignity in the workplace, and when you talk with the employees and talk with the management, you feel that sense of ownership from everybody because they have a voice, they have a say in how things go in the company. And the company has also influenced the industry around it to create quality jobs in order to create quality care in the home care industry, and they’ve spawned a nonprofit organization that does advocacy and consulting to increase the quality of jobs in other home care companies as well. So that’s kind of an example of what’s possible when you have a really effective worker-owned business that can not only empower its worker members but also improve the industry for everybody.

DESVARIEUX: So, Kali, down there in Jackson, Mississippi, they’re all about the empowerment as well. That’s really a city that has rallied around this idea of a cooperative movement. What are the major steps that need to be taken in order to ensure that what we see here in New York City is actually happening in other cities?

AKUNO: The main thing a social movement has to speak to is the social demand of folks who are for quality jobs. That is what we’ve seen and experienced here in Mississippi. That was really the driving demand, and it continues to be the driving demand. But that social movement really has to speak towards the democratic needs of the workers, their need for quality protections within [incompr.] the workplace and the marketplace. And in order to have kind of the response that we see that New York City is having with the city council, that social movement has to either kind of create pressure on the powers that be in city or municipal government or county government, or find some critical avenues and ways to partner with some open-minded politicians and administrators who understand the value of having democratic workspaces and what they lend toward both creativity, job security, and be open to that. I think those are the two kind of paths that communities outside of New York or outside of Jackson that are looking to start similar initiatives, that is where I would advise them to start, based on our experience here in Jackson.

DESVARIEUX: Okay. Like, let’s take the case of New York City, the $1.2 million. I mean, some people are going to look at that and say, you can’t even get one business off the ground, let alone 28 new cooperatives that they’re proposing, with his $1.2 million. It’s really just a drop. But how can you guarantee–I mean, I want to get your perspective on this. Do you think this is really the answer, the cooperative movement, to solving this cycle of poverty that we’re seeing that’s been taking place in America? I’m going to start off with you, Hilary.

ABELL: Yeah. Well, I think that cooperatives are definitively a part of the answer. They’re not for everybody. They’re not a silver bullet, if you will. And so I think we should support the growth of the cooperative movement in a way that’s fair and not expect them to work miracles for the entire economy right away.

But that said, they’re an incredibly important model for democratizing the economy, for creating better jobs, sustainable businesses. And in areas where worker cooperatives, our makeup is a substantial part of the local economy, like in the Basque region of Spain and in northern Italy and in France, there is evidence that unemployment, for example, is lower in the Basque region, unemployment is significantly lower, you know, probably about a third of what it is in the rest of Spain, even through the Great Recession.

And here in the United States–and in my own experience, I worked with an organization called WAGES based in Oakland and working with cooperatives around the Bay Area, and we created five green cleaning companies that have actually increased the immigrant women’s incomes by about 158 percent, the women who are the worker-owners of those cooperatives, and their family incomes by 70 percent or more. They also got health insurance through the company. So we actually have data that shows that cooperative businesses, even though they’re labor-intensive to develop–and I appreciate the question you’re raising about how much it costs to do this work–they’re really worth the investment. And so I think as we celebrate the New York City victory we should also all support the work that they do there with a lot of curiosity and a learning attitude, so we can really learn about what we can do when we get multiple sectors together to work on this, what it costs to do the work, and how we can create something bigger and more effective when we work together.

DESVARIEUX: Kali, I want to turn to you because Hilary mentioned something about wages, and in the Bay Area, they were able to see an increase in wages. But there are some people that say this could be a distraction from the wage movement and increasing the minimum wage. What would be your response to those folks?

AKUNO: Absolutely not. I mean, there are arguments that have been made. Mostly I would say that they’re straw arguments. What cooperatives can do and have done in different times in the past when there are critical kind of adjustments that need to be made for a recession or a depression, because they’re democratically owned and controlled, they have the ability to adjust and to ask their members, to ask their owners, we need the company to survive, so can we survive by lowering our wages? Can we survive by adjusting our profit margins? They have the ability and a democratic–a right to do that. And so that is one thing they have. Sometimes what people look at as kind of lowering their wages, but they’re not taking in account when looking at that example the democracy that’s being practiced actually by the workers and their own control over their economic destiny. That’s the key part, I think, we have to look at. But, you know, unlike here in Jackson, for instance, and, I think, really throughout much of the South, you find the actual reverse, that people’s actual practicing of control of their own means of production, if you will, by creating their own markets, creating their own working conditions, creating their working hours, it boosts up wages and working conditions tremendously. If you look at all the experience that the cooperatives within the Federation of Southern Cooperatives have in their long history, you actually find the reverse, that both wages and earnings go up for those who are in or participate in cooperatives, rather than go down.

And I think the critical thing that we are trying to do here in Jackson is to really educate folks over how cooperatives are still part and parcel of the working-class movement, if you will, and how we’re looking to support the ongoing struggles and are involved in some of the ongoing struggles around temp workers and day labor workers and trying to end their exploitation here in Jackson, Mississippi, and also supporting the organizers and the workers who are involved in the Nissan plant over in Canton, Mississippi, ’cause those things are intimately linked. And there are a number of different ways in which we not only want to ensure that those workers receive their union rights and civil and human rights, but we also want to make sure that Nissan is responsible directly to the local economy in a much more broader and dynamic way and create perhaps, you know, a supply chain that could help support cooperatives by creating local spinoff businesses that support the cooperatives doing some industrial production for them. So [they’re the two ways to look?] at dealing with it. It would improve workers’ lives in our area, you know, in a tremendous fashion that don’t contradict each other but actually support each other in improving the working conditions of and the living wage of workers in our city and our region.

DESVARIEUX: I’m glad you mentioned the participation of Americans and cooperatives, because if you think about it, nationwide there are only 5,000 worker-owners nationwide. So, Hilary, there seems to be this disconnect, because we have an interest, this surging interest in cooperatives, but then you have numbers like this, where fewer than 5,000 worker-owners exist nationwide. What are the real barriers to worker co-op development getting off the ground and running?

ABELL: The way I look at it, Jessica, is that to create a really robust cooperative economy and to increase the presence of worker ownership in the economy, we need to work both on the supply and the demand side. And things like this incredible political victory in New York City came from people, a lot of people working together on the demand side, if you will. And efforts around getting procurement commitments for cooperatives from large institutions or anchor institutions also would go on the demand side. And those are things that anybody can participate in. So we do have tons of interest in the cooperative model from people who may not ever end up being worker-owners themselves, but they can help build this model by working on the demand side.

I do see, though, an imbalance, actually. We don’t have as much strength on the supply side, if you will. And you’re right: it’s only about 300 or 350 worker co-ops in the country right now, and 55 percent of them have been formed since 2000. So we already have a wave that’s started of new cooperatives forming. But what’s needed most right now in the short and medium term is capacity to develop these worker-owned businesses. And that’s both among the workers who are starting the businesses and among co-op development organizations like the nonprofits in New York City that were working together to get that initiative through. So there’s need for technical assistance, but it actually goes well beyond that, and in my ten years of experience in co-op development, it’s usually, like, a five-year program, especially if you’re working with low- to moderate-income workers and the nonprofit is supporting those workers and launching and growing to maturity a successful business. You need at least five years to do that, and you don’t want to shortchange it. You need to invest enough. So we also need more capital in this ecosystem, both from the loan side, but more importantly from the equity side and from the grant side, because we need equity-type funding for these businesses, but we also need grant and charitable funding to support the incredible contributions that worker co-op development can make to social justice and to building economic stability for some of our most disadvantaged workers.

DESVARIEUX: Alright. Hilary Abell and Kali Akuno, thank you both for joining us.

AKUNO: Thank you.

ABELL: Thank you.

DESVARIEUX: And thank you for joining us on The Real News Network.

End

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