How Worker Co-Ops Are Creating Economic Stability In Uncertain Times

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As the reality of the Donald Trump presidency quickly unfolds, many cities are stepping up to position themselves as bastions of decency and rationality. Denver, New York, San Francisco, and Chicago, among others, have declared themselves sanctuaries, committed to protecting their immigrant populations. Places like Portland, Oregon, are superseding climate-change denial and adopting solar power and carbon-reduction policies. Los Angeles is trying to boost mobility for low-income residents through an innovative electric car-sharing scheme.

One thing that remains very much up in the air is how economic equity can be sustained or supported under Trump. With federal budget slashes looming, cities are bracing for revenue streams—for housing, for food assistance, for infrastructure—to dry up.

But a handful of city governments are developing policies to directly support the development of worker-owned cooperatives—an economic model designed to keep economic equity within communities by putting the control of businesses in the hands of the employees themselves, many of whom face barriers to employment or other disadvantages. Worker cooperatives are not new (Paul Soglin, the mayor of Madison, Wisconsin, was part of a worker-owned cab company in the 1970s), but the idea that city governments would allocate resources specifically toward their development is, and it’s something that policymakers and researchers alike believe could act as a vital source of economic resistance and self-sufficiency in the years to come.

Worker co-ops take a variety of forms, but the underlying idea is that the people who own the business are the same people who work there. The worker-owners organize their own schedules and salaries, sidestepping many of the managerial quandaries of traditional businesses, and setting up employees with an arrangement designed to work best for them. Many worker-owned cooperatives are found in the service industry, and they're known to boost both wages and retention rates: The New York-based Cooperative Home Care Associates offers salaries above the industry standard, and as opposed to the industry standard turnover rate of 40%, sees workers leave at a rate of only 15%. The advantages to worker-owned cooperatives are clear, but in the U.S., especially compared with Europe, they've been slow to catch on.

Michelle Camou, a former professor of labor history and movements at the College of Wooster in Ohio, founded the Imagined Economy Project in 2014 to study innovative community and governmental approaches to promoting income equity and work-life balance, and protecting workers against labor-market conditions and environmental factors like unsafe chemicals in the workplace. In a report last year, Camou detailed initiatives in 10 cities across the U.S. to bolster worker cooperatives. It’s still an uncommon model—there are only around 400 co-ops in the country, employing around 7,000 people—but Camou says to Co.Exist in an interview that interest spiked following the 2008 recession, and got another boost after the recent election.

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