The Legacy Project Continues

I’ve already written about The Legacy Project a while ago, but it is always worth mentioning!

We are living through the greatest generational transfer of wealth that has ever occurred. As the Baby Boomers retire and pass, there wealth will go somewhere. In the case of small business owners, that wealth (and the jobs connected to it) may simply disappear.

It is estimated by Project Equity that there are approximately 2.4 million business owned by people born in the Baby Boom era (1946-1964). That accounts for 24.7 million workers and almost a Trillion dollars of payroll! (Check out there map to see your community)

It is also expected that only 20% of these businesses will transfer to a new generation of ownership. Of course, that doesn’t mean massive unemployment and not all the businesses are salvageable (for a number of reasons). However, it does suggest that we are living in a ripe opportunity for converting businesses to worker-ownership.

Not every business is available for this. They need to be financially viable. There needs to be enough time to make the transition (6 months to 18 months). The workers have to want to take it over.

There are roughly 400-500 worker co-ops operating today and they do make a difference in their industries at the local level. If even 1 percent of those small businesses  owned by baby boomers (24,000) become worker co-ops, our national and local economies would look dramatically different.

I remember getting a survey from a Canadian academic about worker co-ops in the US. The study was abandoned because they could not find enough co-ops to make the study work. That was in the early-to-mid 1990s. Today, worker co-ops are highly visible and have even been mentioned on the campaign trail of a couple presidential candidates. In is conceivable to me that in my lifetime, we might have communities for which worker co-ops comprise a significant portion of the economy (over 30%). The social benefits from such a world would be amazing–an engaged citizenry, meaningful work with real living wage compensation, resilient local economies that don’t have to make deals with the devil to attract jobs.

1 percent.

 

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Olympia Food Co-op

While this blog mainly focuses on worker co-ops, I will be making a few exceptions during National Co-op Month this year. I am following the daily Facebook posts that we put out on NWCDC’s social media and that will include co-ops from other sectors.

However, Olympia Food Co-op also qualifies as a democratic workplace!

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A mural on the Olympia Food Co-op West Side store honoring Leonard Peltier.

As with a number of west coast consumer co-ops, Olympia is managed by a staff collective of about 80 people using consensus decision-making.

80 is a bit big for a collective, in my opinion, especially with three work sites (two stores and an admin office). However, they seem to make it work and have an extensive committee structure that likely helps the operations move along. The long term success of Oly Food Co-op (42 years and counting) demonstrates that command and control hierarchies aren’t the only way of doing things. People don’t need bosses, there is nothing natural about creating power structures.

One of the ways that this shows up in the consumer experience is through the boycott policy. Some co-ops require that a certain % of the membership petition to create a vote for a boycott. This is an onerous process that can mean having to reach hundreds if not thousands of people and there often isn’t an easy way to even find other members. At OFc, all it takes is a letter to staff and then a staff process takes over and considers the boycott request within the context of the co-op’s mission statement and other factors. If they boycott isn’t joined, people will have an explanation, not a bureaucratic response that the threshold of signatures wasn’t met.

Okay, almost through a week! Thanks for tuning in. . . . and as always feel free to comment!

 

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Orca Books Needs Your Help

Orca Books has been operating as a new and used bookstore in downtown Olympia for almost three decades. It is the largest bookstore in the downtown (Olympia actually has three locally owned bookstores within about 5 blocks of each other in the downtown core). Local bookstores are not the graveyards that they used to be just a few years ago. The public is reading physical books again and they are also shopping in bookstores. Sales in brick-and-motor bookstores has increased at a steady 5% clip over the last few years.

The owner, Linda B., seeks to retire and contacted us about converting the store to a cooperative last spring.

After some discussion, the staff recognized that the store would benefit from being a multi-stakeholder co-op: consumers, workers, and local businesses that support want to support the bookstore. The goal is to fund the transition through memberships and donations. With 2,000 memberships (at $100), the co-op will be able to retire commercial debt of the current owner and have the operating capital needed to improve inventory, marketing efforts, and sales.

Linda will continue to work as staff, but will also be able to avoid closing the store.

We made a short video about the project:

 

The store has received support from around the world as former residents of Olympia have heard about the transition.

The biggest hurdle facing this project right now is money. So this is also a plea to folks to help fund the conversion. They have a Go Fund Me

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My Home in the PNW

I started this challenge to myself to get me back into the practice of writing down my thoughts on the co-op world. When I writing and editing my thesis, I felt too guilty writing anything except the dissertation. That said, it feels a bit indulgent to talk about the Northwest Cooperative Development Center, but this agency is on the list for today, so bear with me!

nwcdc

NWCDC has its beginnings 40 years ago when people from the regions co-ops (REI, PCC, GHC, and others) felt that the co-op community needed an organization to promote the cooperative model. It started out at the Northwest Cooperative Federation and the area included Alaska, Washington, Oregon, Idaho, and Northern California. While NWCF was a “clearinghouse” and membership organization, in 1986, it created the Puget Sound Development Foundation (PSDF). This organization shares the mission that we still strive to meet: “to foster community economic development primarily through the cooperative model.” At the time, PSDF was based in Seattle, but eventually the organizations merged into the NWCDC in 2000 with Audrey Malan leading the organizational effort and the agency was housed within the Washington Rural Electric Association. In 2013, the Center moved out of the WREA lcoation and into its new offices in the old train depot.

In Spring of 2003, the current era began with the hiring of Diane Gasaway as Executive Director with the mandate to obtain funding and provide development technical assistance to the region. Since then, NWCDC has grown to a staff of 8, partnered with ROC USA and has, at any given time, over 50 development projects. The Center has become something of an expert in homecare co-ops as well as housing co-ops through the ROC-USA model and became an early advocate for working with Small Business Development Centers after passage of the Main Street Employee Ownership Act through the Legacy Project.

The service area expanded to include Hawai’i but has also contracted as other co-op development centers developed in California, Alaska, and Hawai’i (two of my former co-workers work for the Kohala Center.

I basically begged NWCDC to let me in–back in 2013 I sent a letter with my resume. We had been planning to move west for a while (although only a few people in Madison knew that), but it was past time for leaving UCC. Nevertheless, I definitely wanted a landing spot before leaving. The Masters program and some work with Cooperative Care (on behalf of the UW Center for Co-ops) created a calling that I couldn’t resist. Fortunately for me, the Center agreed!

At the same time, my colleague Deborah Craig was hired. We both have extensive work experience in co-ops (mine with Union Cab and Deborah’s with Bellingham Food Co-op and Circle of Life) and we were both Peer Advisors with Democracy at Work Network.

It is really a great team of people that NWCDC has cultivated and collected over the years. People dedicated to the mission of cooperative development and helping people gain control over their economy through democratic collaboration. There isn’t a day that I drag myself to work and each day when I leave the office, I know that I have helped to make the world a better place (even in just this tiny corner of the PNW).

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Capital Homecare-18 months in

On March 3, 2018, the workers of Capital Homecare Cooperative received their Agency license from the State of Washington. In Washington, home care (not to be confused with home healthcare) is heavily regulated. Just to get licensed (which also means insurance coverage) is over $5,000. Caregivers also need a license which can cost hundreds of dollars in training and testing fees (not to mention the license itself). This makes the path towards creating an agency a bit daunting for home care workers who often make near minimum wage.

However, these folks did it!

The paths for CHC was a little bit longer since it began as a “top-down” development model. When I arrived in Olympia in 2014, there was a planning group talking about create a home care co-op, but it didn’t include any caregivers. Part of my job became finding those caregivers and helping them turn the project into a grass roots effort. A lot a great came got involved and did the heavy lifting. Nevertheless, this process of ebbing and flowing with people power took a few cycles until the fall of 2017.

We made a short video for them to tel their story themselves:

 

Home care co-ops are on the rise across the country thanks to organizations such as Cooperative Development Fund and the commitment of regional co-op development groups (such as the one I am associated with), and the desire of people who are in this industry to create a quality of worklife. The folks who choose home care have incredible empathy skills and they deserve to have a workplace that supports and values their humanity.

Capital Homecare continues, as a relatively new organization, to build its infrastructure, but they are making great strides and I consider it an honor to get to work with them on their journey.

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Le Voyeur–The Next Generation

Le Voyeur has been a mainstay of Olympia’s scene since 1997.

“Le Voyeur offers vegan-friendly food, drunk-friendly drinks, and punk-friendly entertainment. It’s also a good spot for some Olympian people-watching, as college kids and townies mix with K Records royalty and traveling crusties. Check the bathroom graffiti for some of the best radical political dialogue in town.”- The Stranger

Tonight, the club moves to its next generation of ownership as a worker cooperative and it seems a fitting way to kick off National Co-op Month.

Right now, in this country, we are living through the greatest generational transfer of wealth that has ever taken place as Baby Boomers retire. For many small businesses (like Le Voyeur), that transfer may never take place. These businesses will simply cease to exist and the equity and jobs will simply disappear in the sands of time. It is estimated that only 20% of existing small businesses will transfer to a new generation of ownership.

Almost more important than the jobs and equity, the community also loses a sense of place. Clubs such as Le Voyeur are more than entertainment venues, they help create the culture of the community. It doesn’t just include entertainment venues either. Just a block away from Le Voyeur is Dumpster Values, another mainstay of the downtown for over 20 years. This gently used and greatly cared for second-use clothing boutique also creates a sense of place that makes Olympia, Olympia.

This conversion project happened incredibly quickly: it took less than 5 months. Part of the fleet conversion involved access to capital, of course, but also a community that has embraced worker ownership. In 2014, the year that I arrived in this capital city, there were two worker co-ops and two worker managed businesses. Today, there are 10 worker-owned co-ops* and 2 worker controlled companies. For a community of just 52,000 people that is one worker-owned and/or controlled business for every 4,300 people (as a humble brag, one of the organizers of Le Voyeur took my summer course at The Evergreen State College).

Other than having a former student involved, I mainly watched this from afar (although my office is right across the street). The value of a co-op ecosystem such as Olympia has created, arises in the experience and mutual support within the community.

I look forward to Le Voyeur’s continued success and the other conversion projects under way in Olympia. It is an exciting time for worker ownership here and throughout the country.

*Not all are legally incorporated as co-ops, but all adhere to the co-op identity and the social definition of cooperation.

Note: I’ll be posting each day during Co-op Month about various projects in conjunction with my agency’s (NWCDC) posts.

 

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National Co-op Month

I don’t know how many, or if anyone, checks here anymore, but I am committing to posting everyday during National Co-op Month (October). I will be adding to the Facebook post for my employer, Northwest Cooperartive Development Center (NWCDC). While the opinions expressed here will be my own, and in no way representative of NWCDC, I hope to add to their efforts talk about co-ops.

So, if you are getting this notification, or see it posted somewhere, come along and celebrate Co-op Month with me. Add to the conversations in the comments and let’s make 2019 a Co-op Month to remember.

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The Legacy Project: Creating the Next Generation of Ownership

A big part of my day job right now is something called “The Legacy Project“. The project has several phases but aims to build the profile of worker ownership at a time when many small business owners seek to retire. Small business owners, often cited as the “backbone” of the nation’s economy, face a dilemma, especially in rural communities. As they reach retirement (thinking 70 and older these days), there may not be an obvious exit strategy. It may be that the kids have flown the coop for a different life or just not interested in the business. A statistical data point is that only 20% of small businesses actually sell to a new owner. The rest simply close and sell off the assets. For some small business owners, this might mean a precarious retirement. For the workers, it means an end to employment. For the community, it can mean reduced economic vitality and loss of a “sense of place.”

As the Baby Boom generation creeps towards old age (the youngest boomers turn 55 this year) with “Gen X” hot on their heals, it amounts to an incredible transition of capital from one generation to another, but a lot of this capital may simply disappear. The Legacy Project promotes another option through worker co-ops. By selling to one’s workers as a co-op, the business owner has buyers who have a real interest in the company. The legacy of the owner can live on in the community and keep the jobs in that community. The Workers aren’t likely to buy the company and shut it down as a competitor might (who may only want the physical assets or customer lists). While a small group of the current staff or a single employee might buy the business, I have found that many workers today don’t find that model very exciting. The idea of being tied down to a business in a way that single proprietorship offers doesn’t appeal to the current generation (and I’m not sure that it ever really appealed to a lot of owners). By forming a worker co-op, the staff has the freedom to continue with their life as it unfolds as opposed to bearing the full responsibility of ownership.

The Legacy Project seeks to increase the awareness of worker co-ops as a means of business succession planning. The hope is for rural communities (but also urban areas) to see the co-op model as a means of securing their current economic vitality and creating a resilient economic foundation for continued strength in their communities.

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Worker Co-ops and the American Dream, part 6

The Union-Co-op as a Pathway to Restoring the American Dream

As the effects of the Great Recession linger even ten years later, Americans seek new avenues to meet their needs and desires. The labor movement has largely been fighting a rear-guard action leaving the successes of the labor movement to the burgeoning worker co-operative models and social movements that focus on political victories and fall outside of the regulatory burdens of the NLRA. Likewise, modern management has taken notice that to attract quality employees, requires a language that speaks to both the monetary and social values. This has led to “decentralized participative governance structures” (Marshall, 2005), but it has also allowed the language of ownership to be co-opted through the “sharing economy” that engages workers as partners rather than employees, but creates a system that extracts wealth from both the worker and the consumer.

Through either company ownership or union representation, workers can achieve higher pay through wages and benefits, and also through a share of the profits generated. This provides one piece of the puzzle, the part of the American Dream that promises wealth, comfort, economic mobility for oneself and their children. By combining the worker co-operative model, with the movement’s values, ethics and principles, workers develop the other half of the Dream. They can build their sense of social community and class-consciousness. This model not only provides them the ability to meet their material needs, but it makes them better citizens by engaging in a democratic economic model.

Worker ownership, by itself, requires that workers engage their workplace as both owner and employee. Worker cooperatives may end up creating more work for people without the perceived economic reward. Not everyone wants to be a hands-on owner. For many, it is enough to have a job with decent pay in a healthy workplace. Attending meetings after working all day doesn’t necessarily attract people. When organizations reach employment in the hundreds or even thousands, it would be impractical for everyone to engage in meetings. In many of these larger co-ops, some form of representative democracy must take hold.  Even dynamic governance methods such as sociocracy become limited if the circles get too big.

Growing co-ops to scale with the market or the community may create political polarization within the co-operative among the membership. As a co-operative grows, the organization may lose the sense of ownership and this can lead to destructive behavior from both the management and employee perspectives (Kasmir, 1996). However, if worker ownership can only exist at a small level (100 workers or less), it can never really be more than an economic asterisk and the model’s overall effect on building a more just world let alone achieving the American Dream will minimal.

The labor union, in a sense, allows worker co-operatives to reach a size to achieve the economies of scale while providing a means to keep focus on the social needs of the workers and the social aspect of the organization’s mission. By utilizing a partnership with an outside organizing body (but comprising of the members of the co-operative), worker co-operatives create a watchdog organization that can act as a break on the excesses of profit-driven decision making. Without this engagement, the individual member/worker can be lost in the data on productivity, profit, and return on equity. Recently, such a scenario erupted in Evergreen Co-operatives[1] in Cleveland, Ohio which had been praised for its ability to grow to scale with industrial laundries; however, the governance and decision making left workers on the outside of key decisions that saw massive lay-offs and pay cut by 50% without any input from the affected workers (Davis, 2016).

As organizations increase in size, the tendency for isomorphic behavior increases even co-operative based organizations. The struggle to maintain the values and principles becomes more difficult as the community becomes larger. The role of the labor union can create contractual language to assure that these values remain front and center. This creates the synergy of the two, but also requires that both organizational models engage a new paradigm of work. The worker co-operative model needs to get beyond a “do-it-yourself” mentality and recognize that some issues require outside assistance. Likewise, the labor unions must resist the temptation to engage worker co-operatives in the traditional antagonist model that the NLRA has established.

Labor unions, like cooperatives, exist to serve their members. As such, they can also be too materially focused. Beyond the scope of this essay, the historical unwillingness of labor unions in the United States and Canada to avoid issues of social justice and focus on the material needs of their members has, itself, a long history. Worker Cooperatives, while generally about creating good jobs, also have a social justice aspect to them. Thus, the interplay between these two organizations with a combined mission of social justice and economic opportunity provides a promise to engage in a form of dance that keeps the American Dream’s aspects in balance. One might imagine a cooperative whose elected board focuses too much on social justice issues (to the detriment of the business) will be reined in by a labor union concerned about falling wages and benefits. Likewise, an elected board focused too heavily on profits and growth, to the exclusion of social justice within the cooperative, might find the labor union engaged to speak for the members who feel left behind. At other times, the leadership of both organizations may be working in the same direction to channel membership energy in order to achieve either a unique social justice or economic growth goal for the organizations. This dynamic can help break up the isomorphic effects on both organizations through their different expressions of the antenarrative of the American Dream.

The American Dream began as an answer to the closed aristocratic societies in Europe. It promised a new method of governance in a new world. Since the advent of Americanism, democracy, in many forms, has swept across the globe. The noble experiment began in 1776 no longer exists in a vacuum. The American Dream continues, however, as a grand myth for the inhabitants of the United States and for many of the world’s population seeking a life that offers the promise of “life, liberty and the pursuit of happiness”.

The grand narrative of the American Dream finds it power in the duality of its existence as both a promise of material wealth through individual effort and social justice through community support. It is both individualistic and socialistic while at any given moment one aspect may be in ascension over the other. At different times in the course of the path of the United States, the Dream has pushed the individual efforts that helped expand the country (Manifest Destiny) to the detriment of those civilizations that got in the way. The Dream has also engendered communal efforts to ensure that all of its citizens had access to the Dream (the Abolition Movement, Women’s Suffrage Movement, and the Civil Rights Movement). As the country progresses into a new era of community minded citizenry, the debate over the dream and the role of wealth continues to play a key role in determining the fate of its people.

References:

Davis, J. (2016). What’s Up With Evergreen?  Retrieved from http://www.geo.coop/blog/whats-evergreen

Kasmir, S. (1996). The Myth of Mondragón: Cooperatives, Politics, and Working-Class Life in a Basque Town. Albany, NY: State University of New York Press.

Marshall, R. (2005). Restoring the American Dream. Work and Occupations, 33(3), 257-261. doi:10.1177/0730888406290094

[1] Evergreen, known also as The Cleveland Model, began as a means of revitalizing the urban core neighborhoods of Cleveland, Ohio. The model partnered City governments with foundational institutions to create an opportunity for workforce development. The model effectively funded the creation of an industrial laundry that would provide service to the Cleveland Hospital and Case Western University. Other co-ops created through this process included an indoor agriculture facility and a solar energy installation company. The co-operatives were linked to a larger organization that controlled by the foundation and other Not-for-Profit organizations

 

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Worker Co-ops and the American Dream, part 5

Keeping the Dream Alive

Despite the data that clearly exposes the shortcomings of the American Dream, it is still a powerful myth that draws thousands of new immigrants to the United States each year. Even those who deny the Dream or expose it do not have immunity to its powers. One could argue that Langston Hughes, given his humble childhood and the success that he garnered, achieved the very American Dream seen to be deferred. Of course, that requires one to see the American Dream as a solitary dream, not a communal one.

Historically, the American Dream’s power exists through championing the individual and their desire to acquire wealth. The 19th century stories of Ragged Dick by Horatio Alger spread the vision that by hard work and a little luck, everyone could grow wealthy. This expression of the American Dream limits any failure in attempting to achieve the dream to the moral failings of the individual rather than a systemic failure or systemic method of accumulating wealth (Porter, 2010). It ignores the reality that wealth accumulates among the wealthy (Pikkety, 2014). The myth of solitary actions of in how we generate wealth has started to change with the Great Recession of 2008 as many started to question the wheeling and dealing that appears to stack the deck against the individual. That sentiment that the game is rigged plays into the Dream. The anger isn’t that capitalism, as a system, concentrates wealth into fewer and fewer hands and extracts wealth from labor and the environment. The anger results from a sense that people with connections cheated to get ahead.

The American Dream exists, then in different states for diverse groups of individuals. It is, in many ways, an antenarrative to the American experience. The antenarrative connects the grand narrative with the living story. For some, this antenarrative expands to create the myth of individual attainment of wealth, for others a life of liberty and pursuit of happiness (in comparison to their home country) and the quest for social justice that liberty and happiness imply. Like the duality of Schrodinger’s Cat, the American Dream can exist as a grand narrative of community-oriented social justice and a grand narrative of individual economic prosperity, both individual and communal. Just as one can only know the fate of Schrodinger’s Cat by opening the box, one can only see the American Dream through the individual story. It is this duality, this multi-modal nature of the Dream that is, at once deferred and achieved depending on the observer that creates the incredible power of the American Dream and keeps the concept of “America” bigger than life.

References:

Pikkety, T. (2014). Capital in the Twenty-first Century: Harvard University Press.

Porter, G. (2010). Work Ethic and Ethical Work: Distortions in the American Dream. Journal of Business Ethics, 96(4), 535-550.

Next: The Union-Coop as a Pathway to the American Dream

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