We Need New Laws

Over the weekend, I wrote my Assembly Representative, Mark Pocan. The last time that the Democrats held the majority, Rep. Pocan co-chaired the powerful Joint Committee on Finance. Of course, today, his party is in the minority of a very partisan Assembly whose Speaker is planning a run for the US Senate.

In any even, this was my letter:

Rep Pocan,

I would like to meet with you to discuss the possibility of drafting bi-partisan bill to assist workers in Wisconsin to create their own jobs. Specifically, I would like to see Wisconsin follow a successful model in Spain.

My basic proposal would be to allow workers who become unemployed to elect to receive their entire unemployment insurance benefit in one lump sum provided that at least 80% of it is invested into a worker owned enterprise under Chapter 185 of the Wisconsin State Statutes (Cooperatives).

This could have a dramatic effect on the state’s unemployed and even provide an added incentive for owners to sell to their workers (as the IRS Section 1042 provides a means for owners to avoid capital gains tax if they sell to their workers). It is clearly a bipartisan proposal as it would create jobs with an entrepreneurial spirit. Rather than forcing workers already stressed about their ability to make ends meet to jump through a lot of hoops, this law would allow them to either join an existing worker coop or join with other unemployed workers and create their own cooperative.

2012 is the International Year of the Cooperative and this could become model legislation in the United States. The cooperative movement offers real change and hope to the nation’s working men and women. As a 23 year member of Union Cab of Madison, I have seen first hand how our cooperative has humanized our industry in Madison and literally allow people to drive themselves out of poverty.


I might add that this also has a benefit in that worker cooperatives don’t leave. They won’t move to another state. That means, of course, the the State gets to keep all of that start-up capital circulating in Wisconsin. These are real jobs that will be here for a very long time (I read somewhere that the average lifespan of a cooperative is about 60 years compared to under 10 for most businesses). In the Basque region of Spain, roughly 30-40 non-Mondragon worker cooperatives start each year. Mondragon connected coops are sprout at the rate of about 20-30 a year. Imagine what would happen to Wisconsin’s economy if we started creating even 40 worker cooperatives a year? Solving local problems and providing local employment?

We wouldn’t need the “Cleveland Model” or well meaning hand-outs. We can create a Wisconsin model of bootstrapping using the existing unemployment insurance program. As this idea develops, I will continue to write about it. If you live in Wisconsin and think that this is a good idea, write your Assembly Representative or State Senator.

About John McNamara

John spent 26 years with Union Cab of Madison Cooperative and currently helps develop co-ops in the Pacific Northwest. He holds a Ph.D. in Business Administration and Masters in Management: Co-operatives and Credit Unions from Saint Mary's University.
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2 Responses to We Need New Laws

  1. tom says:

    There’s also the Italian model law, which could be preferably by your nutty Republican legislature: the state will pay 2 years of unemployment into investment for cooperatives, but the worker may not receive any state unemployment benefits for 3 years, even if the enterprise fails. Alberto Zevi from Legacoop told us about it last week in Quebec.

  2. Thanks for the info, Tom! What we need to do, is take a lesson from ALEC. We need to create a model law for this and then present it in all 50 statehouses. For some, this might also require them to create a law defining worker cooperatives.

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