Solutions Movement: How Worker-Owned Co-Ops Can Change the Way We Work

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    As many of us watch or participate in the movement to improve the lives of service workers through raising the minimum wage, another, more radical story is being told on the margins: the story of worker-owned cooperatives, which have the potential to change the way we work.

    Worker-owned co-ops have been around since at least the early 19th century; even in the U.S., an early “community of cooperation” was formed by the British socialist Robert Owen in New Harmony, Indiana, in 1814. Although this early experiment failed, it produced the country’s first free library and the first public schools open to both sexes, demonstrating what workers could do for their communities when given control of their labor.

    Although they’ve been in the news a fair amount more recently, worker co-ops still represent just a tiny sliver of businesses in North America. The total number of worker-run cooperatives in the U.S. is estimated at 300, and they employ around 3,500 people.

    One U.S. city where the co-op movement is expected to grow in the near term is New York. The city council there has set aside $1.2 million in its 2015 budget to help fund existing co-ops and to build at least 20 new ones.

    New York is already home to the country’s largest worker-owned co-op, Co-operative Home Care Associates, which employs some 2,300 workers, of whom 1,100 are worker-owners. These worker-owners buy a share in the co-op for $1,000, which they pay in increments over time. While the workers don’t get rich, they make close to double – $16 an hour – the national average in their field, receive retirement and medical benefits, and all workers are members of the Service Employees International Union Local 1199.

    The CHCA is located in the South Bronx, one of the most economically disadvantaged neighborhoods in New York City. The co-op employs mainly immigrant and minority women, making this business model a possible economic solution for similar communities throughout the country.

    And New York isn’t the only urban area to jump on the co-op bandwagon. Madison, the capital and second largest city of Wisconsin, has allocated $1 million a year for five years starting in 2016 to develop more worker-owned businesses.

    The city’s mayor, Paul Soglin, is enthusiastic about the initiative, saying, “One of the benefits of a program like this is it gives us another opportunity to show that the economics of aggrandizing wealth in the top one percent is stupid.”

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