Workplace Solidarity in the Equitable Economy
Second in a series, “A Sustainable Economy Rises in Los Angeles.”
This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org
This article is from the
July/August 2018 issue.
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Kateri and Jonathan in Lynwood, Calif., wanted to earn a living wage in the coffee house where they work, engage with community and coworkers, and support their working-class Latino neighborhood. They had the experience and skills to be a part of the management of a commercial kitchen, yet in food service, employees often remain shut out of upward mobility. Fortunately, it’s a different situation for them as worker-owners at Collective Avenue Coffee. They are members of a 10-person multi-business collective of worker cooperatives in southeast Los Angeles, a group unified by their affection and loyalty to the neighborhood who find strength and leverage through connection with kindred entrepreneurial spirits. At Collective Avenue, Kat and Jonathan’s expertise is respected, they are engaged in decision-making, and they feel valued by the community they serve. Kat believes their coffee shop “can bring people together”—an admirable mission for a local café.
While still struggling to make a profit, this collective offers a real-world example of an egalitarian business model that prioritizes worker ownership and equity over hierarchy. The Los Angeles area has great inequities in wealth distribution, and salaries stagnate while the costs of living rise. Worker-owned cooperatives offer one remedy to lessen poverty and injustice. From Lynwood to Boyle Heights, from South LA to the Northeast Valley, communities separated by the unique geography and scale of Los Angeles are connected in the struggle for a living wage and improved workplace conditions.
An emerging movement for economic democracy is shaping a network of worker-owned cooperatives. Participants in this movement, this work in progress, are driven not just by economic stratification, but also by pressures from unfair workplace practices, the gig economy, and gentrification forces. Multiple organizations with varied memberships and concerns are aligned in the work to build a collaborative alternative to the crushing economic imbalances of our times. Worker-owned cooperatives offer a stark alternative: shared ownership, shared investment, and shared responsibilities; dignified and equitable conditions; and family-supporting wages.
Why Co-ops?
Worker ownership exists in countries around the globe and in cities across the United States, with history in Mondragón, Spain, in the Emilio Romagna region of Italy, and in the recovered factories of Argentina. In the United States, its roots date to the late 19th century, and stretch further back into age-old collaborative mutual aid structures. Cooperative organizations and businesses operate with established principles that lead to shared decision-making, investment, and returns. These formal principles include: voluntary and open membership; democratic control; member economic participation; autonomy and independence; education, training, and information sharing; cooperation among cooperatives; and concern for community. In practice, the day-to-day tasks for Kat and Jonathan include running their shop, catering events, attending meetings of their cooperative group to design and build out their next mutual enterprise, creating community events such as free youth-oriented Friday evening performances, and participating in the regional gatherings of cooperative supporters.
Second in a series:
An Equitable Economy Rises in Los Angeles
This is the second article in a series that tells the story of local and regional efforts to build a robust and participatory alternative to the current economy. Southern Californians struggle with stagnant wages, and lack of ownership, opportunity, and voice. Labor is extracted at too high a cost to our mutual well-being, and earnings fail to support healthy, dignified lives. We explore alternatives that provide a pathway to regaining the power of production and restoring democracy in the workplace, marketplace, and community. Some of these options are age-old, and some are so new that they are not yet fully formed, but all meet at the confluence of a better tomorrow.
In response to the needs of our communities, individuals, and working families, an alternative equitable economy is emerging, orchestrated by a growing army of change-makers who are building viable options for a Los Angeles that is ready to construct and cultivate equity. These contributors are versed in worker ownership, micro finance, community wealth building, shared equity models, and principles of economic democracy. Alternatives to predatory lenders, low wages, housing instability, and economic insecurity do exist—options for working-class people that invite authentic, knowledgeable, and empowered participation in the economy.
People interact with an economy not through the rise and fall of stock market prices or interest rates set by the Federal Reserve, but through their everyday financial transactions and obligations—making paychecks last, keeping a small business resilient through tough times, and striving to hold onto secure housing in a competitively market-driven city. The economy that many Angelenos know personally and deeply is manifested in the struggle to meet food, rent, transit and healthcare needs. The pressing question of how to change these all-too-common dire scenarios may be answered in part by the actions of advocates for a democratic economy, who are working to build hope and regain kinship in workplaces, housing choices, and financial opportunities.
Co-ops offer workers wage equity, benefits, training, and improved working conditions, and studies find they have higher productivity rates than conventional businesses. Co-op workers bring increased conscientiousness, energy, and creativity to their jobs, because everyone has a voice in the business and an authentic stake in its success. Because worker-owned cooperatives are connected to their communities, they have respect for the local environment, which can be seen in procurement practices and business processes that do not harm the air, water, soil, or health of their neighbors. They source products locally from partners and allies, thereby investing both financially and socially in the neighborhood. In the cooperative community, workers that have been left out of other opportunities can find employment, undocumented individuals can be owners, the formerly incarcerated can find jobs with dignity, and young people with limited experience but ideals can innovate and create their identity in the economy.
A worker-owned cooperative must have the solid foundation of a practical and viable business plan. They also need technical assistance in business details, cooperative management methods, legal structures, and access to capital. Cooperative organizations face challenges such as undercapitalization and the complexities of structuring collective decision-making. If there is a recipe for worker-owned cooperative success, it has these critical ingredients: daily collaboration, patience, and listening and participating in democratic dialogue to build a feasible entrepreneurial model. They also need a support system that helps get them off the ground and provides ongoing business advice and training. This is particularly vital in places like Los Angeles where worker-owned cooperative projects are young and fragile.
A Cooperative Support System
The Southern California region has a worker-ownership network that is held together not by a single entity but by a polycentric system. A vibrant support network of cooperative developers, supporters in the labor movement, worker- and community-based organizations, time banks, and legal and financial advisors all contribute. As John Duda of the Democracy Collaborative, an alternative economics research and development institute, stated: “A networked eco-system—decentralized and resilient—can harness energy and interest at different levels and in different sectors.“ The LA network uses connections to peers in social justice and economic development to create a space where people can grow and learn from one another. It is grounded in personal relationships, relies on volunteers, and is anchored by established nonprofits.
Understanding what will make this system grow and thrive is the work of the LA Co-op Lab and their partners in the region. The LA Co-op Lab has initiated efforts to examine the network, analyze its strengths and weaknesses, debate the merits of policy advocacy, and build upon new financing streams. To do that, they work with organizations such as the Working World, a progressive lender that makes low-interest, long-term loans to fund cooperatives that are based in and serve low-income neighborhoods, and provides supportive technical assistance and coaching. That financial foothold is crucial, because traditional lending is based largely on credit history and collateral, criteria that working-class individuals often cannot meet.
The LA Co-op Lab has met with small teams of workers, mostly people of color from historically disinvested neighborhoods, to train them in new ways of working together and thinking about their place in the market and in community. The Lab sees education as pivotal in their role, while supporting the larger network’s coordinating, leadership-building, and advocacy efforts. Ashley Ortiz, a staff member of the Bay Area Arizmendi Association of Cooperatives and collaborator with LACL, tells us that participating in the development and support arm of cooperatives is a blend of both demanding and empowering moments. Every day can be different and energizing, with Ortiz juggling advising in a variety of industry sectors, such as food service, landscaping, and construction.
Developers balance teaching and skill-sharing, guiding the establishment of democratic decision-making processes as well as the standard business practices of marketing, management, legal affairs, and accounting. They also face challenges in finding financing for marginalized borrowers and creating a broader political project that supports worker-owner autonomy. Another supporting organization in Southern California is the Solidarity Research Center. It is at work on a mapping project that will aid regional efforts to assess the conditions, weaknesses, and potential for worker-owned cooperatives. Two Los Angeles community college courses focused on creating worker-owned cooperatives are in the works for the fall term, in an effort to strengthen the local network.
Two important communities have contributed significantly to the cooperative economy: organized labor and worker centers. Progressive groups within organized labor are struggling to make the labor movement more inclusive, and to find creative ways to battle the nationwide decline in membership and political assault on workers, a situation that is holding down wages in both the unionized and nonunion sectors. They see co-ops as an important pillar in that fight. In fact, the U.S. labor movement has a long tradition of supporting cooperative businesses dating to the 1800s; the new engagement between co-ops and labor is a return to form. Unions can provide cooperatives with access to pension and healthcare systems, organizing expertise, and solidarity with allies supporting worker rights. The Los Angeles Union Cooperative Initiative (LUCI) is a leading participant in local advocacy efforts to build labor and cooperative partnerships. LUCI provides research, education, and development services, including assistance in converting traditional businesses into worker-owned cooperatives when individual owners are ready to retire or move on. LUCI also speaks out for policies that could bolster cooperatives with municipal and/or regional economic development influence, grants, procurement preferences, reduced fees, and access to commercial spaces.
Worker centers are also proving an important player in the cooperative economy. They represent a significant population in the Los Angeles area by community (the Black Worker Center, Koreatown Immigrant Workers Alliance, Central American Resource Center) and employment sector (the Garment Worker Center). They advocate for workers who are not unionized, come from marginalized communities, and may be undocumented or participants in the informal economy, unprotected by laws such as minimum wage. Due to economic necessity and social affinity, they are increasingly engaged in the construction of the worker-ownership network in Southern California. Worker center leaders are looking for strategic solutions to address poverty and organize their communities of immigrant workers. For example, domestic worker advocates in Los Angeles face obstacles in licensing a large population of trained but undocumented workers in the caregiving profession. A connection to cooperative education, support and economic power may in part address their challenges, and the Pilipino Worker Center’s trainings with the LA Co-op Lab stand as a model of that effort.
The cooperative sector of Los Angeles is striving to catch up with the scale and impact of co-ops in other regions and cities, and it needs the assistance of public policies and subsidies, like those established in New York City and in development in the San Francisco Bay area. In California, both county and state policies could help devote public-sector resources to cooperatives, strengthen conversion methods, preserve affordable commercial spaces, and otherwise incentivize cooperative growth, with input from the progressive investment and philanthropic community. A $2.2 million funding initiative in New York City in 2017 has allowed the region to more than double the number of worker owned cooperatives there.
Looking Forward
The food service, processing, and production industry has the greatest sector concentration of worker-owned cooperatives in the United States. There are approximately 70 co-ops in this sector, or about 22% of U.S. coops nationally (other significant sectors include retail, professional services, administration, manufacturing, and waste management.) Those food service co-ops offer Kateri and Jonathan at Collective Avenue Coffee models to learn from as they seek to take their enterprise to the next level. Furthermore, Los Angeles is fortunate to be the home to a national conference focused on worker ownership in September of this year, which will bring more resources to the nascent but determined system of cooperative advocates. The co-op network in Los Angeles can connect with other networks across the country, contributing to the development of a nationwide system that spurs economic stability and democratic participation.
The cooperative concepts of solidarity, collaboration, and kinship are particularly resonant in the current economic and political climate, when prospects for a better life are derailed by a system that values shareholder returns and executive profit over shared wealth. These networks of worker-owned cooperatives show that well-designed workplaces can provide living wages, generate productivity, and foster mutual respect. Angelenos are hopeful about the prospects for an alternate economy “built on locally rooted and broadly held ownership,” as described in Cities Building Community Wealth, a report published by the Democracy Collaborative. Opportunities for control over production foster self-governance and autonomy, bringing the skills of democracy and the winds of change to the lives of worker-owners. In Southern California, we have a confluence of conditions and relationships that can allow us to create stronger community bonds, stabilize working families, build well-being, and discover new opportunities. To make a significant economic transformation, we face a long, steep journey, but we are bound together on the climb by our hard-earned solidarity.
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