http://www.truth-out.org/opinion/item/15001-making-a-new-economy-getting-cooperative
Making a New Economy: Getting Cooperative
Saturday, 16 March 2013 00:00
By David Morgan, Truthout | Op-Ed
A new economy is coming. While Wall Street banks are on a trend of
corporate mergers and acquisitions, Main Street businesses are
generating community wealth while undergoing a transition of their own.
Traditional companies are becoming worker cooperatives, both to sustain
during tough economic times and because years of success have enabled
these companies to reward their workers. State and local governments are
beginning to get wise to this trend, too, adding legislative influence
to an already vibrant movement.
Take the example of Zingerman's Community of Businesses, an umbrella
company that runs a fleet of food service outfits based in Ann Arbor,
Michigan. Over the course of more than 30 years, Zingerman's has become
a statewide destination for food lovers, and their owners have become
business community luminaries. Nearly 600 employees work in the eight
distinct businesses that comprise the Zingerman's Community, generating
annual revenues of $46 million. Inc. Magazine once rated Zingerman's
among the coolest companies in the States, and the very same leaders
whose vision has been so celebrated are now designing a plan to
transition Zingerman's to an employee-owned worker cooperative. When the
transition is complete, Zingerman's will be among the largest worker
co-ops in the United States.
"It's exciting to see so many of these transitions happening today, and
when a relatively large and remarkably successful company like
Zingerman's moves in this direction, it says something powerful about
the possibilities of the Next Economy," says John Abrams of South
Mountain Company. Abrams is advising Zingerman's on its transition, and
brings more than 25 years of experience to the Zingerman's table. In
1987, Abrams was among those who transitioned his workplace, a
design/build firm in Massachusetts named South Mountain Company, to a
worker-owned cooperative. "Ownership is a very big deal," he explains,
"and when the people who are making the decisions share in both the
rewards and the consequences of those decisions, it's natural that
better decisions result."
Putting decision-making power in the employees' hands can keep a local
economy going in tough times, and create stable jobs that are far less
likely to disappear in times of crisis. The high-profile example of
Chicago's Republic Windows & Doors is one such case of a transition born
out of conflict and economic strife. In late 2008, Bank of America
cancelled the company's line of credit, driving it into bankruptcy, and
the workers were set to be laid off without their due severance pay or
other benefits. Days later, the embattled workers occupied the factory
and took control of what the bank had threatened to take away. Assisted
by many players in the cooperative movement, those same workers who
occupied Republic Windows & Doors have since decided to take permanent
control of the company and turn it into a cooperative called New Era
Windows.
These recent conversions draw from deep roots. Businesses transitioning
today enjoy a broad support network of co-ops drawing from decades of
experience. Pioneering company conversions include the 25-year-old
Collective Copies of western Massachusetts, whose unionized, striking
employees pooled their skills and experience to change over the failing
and exploitative Gnomon Copies, revitalizing, strengthening, and
updating it to a modern, collectively-run print shop.
These historical examples and the current economic climate are
convincing municipalities across the country that transitioning to a
co-op-focused economy is a good idea. Recently, two dozen city officials
met in Reading, Pennsylvania, to discuss boosting the local economy by
creating co-ops, and the mayor of Richmond, California, created a co-op
development position to advise the city government.
The picture isn't as rosy elsewhere in the country, however. "You can't
even form a cooperative in every state in the US," says Melissa Hoover,
president of the US Federation of Worker Cooperatives, because "the
legal form simply does not exist in some states." Indeed, even among
cooperative enterprises, only one percent are worker-owned.
As one of the five states that offer worker cooperatives an official
business identity, Massachusetts leads the way in supporting worker
cooperatives. Legislation is currently on the table that would formalize
and clarify the transition process for companies looking to become
worker-owned. The new laws would require business owners to notify their
workers when they intend to sell the company, making it clear to
employees that they are eligible to purchase or bid on the company. It
would also give the employees the right of first refusal.
Where co-ops don't already have a foothold, advocacy groups are making
strides, including the formative New Orleans Cooperative Development
Project, which describes itself as "a community consortium to facilitate
the startup and development of worker-owned cooperative businesses in
the region." In the midwest, the Cincinnati Union Co-op Initiative,
pairs United Steelworkers - the largest US-based union - with the
Mondragon Cooperative Complex, the largest co-op worker system in the world.
"To survive the boom and bust, bubble-driven economic cycles fueled by
Wall Street, we must look for new ways to create and sustain good jobs
on Main Street," Leo Gerard, president of United Steelworkers, told The
Nation last year. "Worker-ownership can provide the opportunity to
figure out collective alternatives to layoffs, bankruptcies and closings."
The cooperative movement enjoys growing acceptance in the business
community, aided by visionary political leadership that recognizes the
value of community resilience. A crucial part of the co-op movement is
how it integrates with our communities; each new co-op makes the economy
more accountable to the people who live on Main Street, and has the
power to change how we will build a new economy.
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