Co-ops in the Time of Corona

A Special Message to My Readers:

I don’t get a lot of comments on this site these days. That is likely my fault in my attempt to keep the bots at bay. However, I really want you to comment. I want to hear about what your co-ops and your community is doing to support each other right now. Perhaps we can make this a record of this historic time (perhaps GEO will coordinate the stories in an anthology). Please register and comment (or upgrade your status and post).

I Return to Your Blog Post. . . .

As the Corona Pandemic continues to build steam, worker co-ops are at a crossroad.

Like other small business owners, worker-owned businesses don’t neccessarily have a deep supply of money to weather this storm. While worker co-ops can prioritize the health and well being of the membership (share hours, across-the-board pay-cuts, etc.), ta bottom exists. At some point the the fixed costs have to be paid (the rent, the mortgage, utilities, taxes). As governments require people to shelter in place, no plan is presented to protect any small business let alone our worker co-ops.

We need to save each other. We need to fight for all of us.

At some point, the government will have to intervene and provide support, but how do our co-ops survive until the politicians of this age finally recognize that the neo-liberal model of trickle-down economics simply doesn’t work in a global economic and health crisis. Tax cuts are meaningless if there isn’t any income to tax.

In Olympia, the local co-op network, CoSound, has convened a meeting of co-ops in the region to figure this out. It meets later today to begin a process of working together stay strong (or at least viable) during this crisis. Ultimately, co-ops need to manage their fixed costs and hope unemployment insurance can keep the membership together. Combining this with group purchasing (which is how consumer co-ops started out in the 70s) and political action to force elected officials to do more than simply shut down the ability to earn a living. We must demand that the supply side also supports workers ability to survive during the crisis. I expect that local co-op networks across the country will be doing likewise.

What does this mean? I am sure that everyone has a favorite tactic. Seattle is currently providing $800 for families to buy groceries. There are a number of ways to go, but we need to make sure that we support each other and work together to demand that our elected officials recognize that there is no “safe” path forward. They need to make the hard decisions to keep our communities solvent even if that means losing the next election. We also need to reach out to the larger labor movement and work with them to protect all workers. Today, more than at any point in my lifetime, the need for class solidarity means survival.

A nice thing about the time-off is that it provides the means to organize, agitate, and lobby. Even if we can’t rally in front of their offices, we can make sure that they hear us. I don’t have a good rallying cry, but we must argue that our communities remain intact.

Assuming that our movement survives, we need to plan for the next crisis. The US Federation of Worker Co-ops has done a good job getting in front of the wave and helping us to navigate resources. We need more. We need a Solidarity Fund. This could follow Mondragon’s model: 10% of surplus before disbursement form every worker co-op to be held by the Federation. It could be distributed on either an at-need basis or in a national crisis through grants or low-interest non-extractive lending with the aim of covering fixed costs through the crisis.

This is a crucial moment for our movement. We could easily lose the majority of our co-ops but we can also fight hard to make sure that we keep as many as possible. It is ultimately up to us.

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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1 Response to Co-ops in the Time of Corona

  1. J. Tom Webb says:

    Good post re COVID-19. I tried to comment on the site but it wanted me to log in with a password and alas I do not have one.

    A number of things are clear form this pandemic. It is clear that by far the best way to survive this is by co-operating. If we approach this virus with an “I’m looking out just for me.” approach the death toll will escalate. It is also clear that government action is crucial. Big corporations have no solutions. Their purpose is not to look after people in your country or ours but just to make sure they can survive and if possible make a buck at it.

    Our small credit union has told our workers they will not be paid off, that we will alter the workplace to protect them, we will find ways to let as many as possible work from home and more. We have told our members we will protect them by restructuring loans and upping online service. The board resolution is below. Our banks are singing the same song but hundreds of quarantined and laid off workers are getting a different answer when they call the banks. Our credit union is small (assets of $46 million) but financially very healthy. We are prepared to dip into reserves if necessary.

    For years our people have been told downsize government including health care expenditures and to cut taxes to corporations. We followed like zombies. Now we are praying that people will be caring and co-operative enough to slow the spread of the virus so that our weakened healthcare system is not overwhelmed leaving hundred or thousands to die. I know the system is different in the US but the result is the same. Co-operatives and government are clearly much more useful at meeting human need.

    As a side light I listened to reports from Iran where the Supreme Leader claims the US is responsible for the virus. Another Supreme Leader claims it was the Chinese. I suspect that at heart they are really the same person.

    Warm regards,

    Tom

    Moved that the Board sets out the following policy direction to authorize our management to make decisions and act in response to the COVID-19 pandemic:

    The credit union will protect members as far as possible from the financial impact of isolation or income loss by negotiating loan payment terms and providing members with as much information as possible about government programs to assist those financially impacted.
    The credit union will make every reasonable effort to protect the health of our staff and minimize their risks during the pandemic.
    The credit union will closely monitor its financial health with the understanding the the surplus from our operations will be negatively impacted, and while authorizing the management and staff to take whatever actions are necessary to meet 1 and 2 above, ensure that if at any point expenses for a period or periods are anticipated to exceed revenue, it will require board approval to utilize a reduction of reserves.
    The credit union will explore what actions may be possible to encourage our communities to co-operate to protect people, especially those most vulnerable, to endure this pandemic, and, to nurture caring, sharing and co-operation as people struggle with these difficult times
    The credit union will quickly develop the capacity to hold electronic meetings with voice and video for the board, committees and the membership AGM or other general meetings.

    J Tom Webb
    President, Global Co-operation
    Adjunct Professor
    Sobey School of Business

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