Co-ops Enable Low-Income Women to Work as Owners and Decision Makers

Co-ops not only give low-income and immigrant women a way to enter an often unwelcoming – and in some cases, hostile – economy, but also give them a way to exert some control over their work lives and simultaneously support themselves and their families. They have consequently been some of the early adopters in the not-yet-critical-mass movement of worker-owned cooperative businesses that has begun to catch fire in towns and cities throughout the United States.

Melissa Hoover, executive director of the Democracy at Work Institute, estimates that there are presently between 300 and 400 worker-owned businesses operating domestically. The fledgling cooperative movement is diverse. There are co-op bakeries, catering companies, tortilla-makers and cafes; bike repair shops; taxi companies; dog-walking and cat-sitting services; and upholsterers. There are also worker-owned farms, elder- and child-care agencies, tutoring programs, and factory and construction businesses.

What’s more, they run the gamut in terms of size. Some have just three to five members while the largest, Cooperative Home Care Associates in the Bronx, has 2,100. And while most involve both men and women, a growing number of all-women co-ops have been established as a way for low-income and immigrant females to earn a living.

According to Amy Johnson, co-executive director of the US Federation of Worker Cooperatives, the majority of established women’s co-ops came together at the behest of an agency that then serves as mentor and facilitator. “Women frequently come to a social service organization needing jobs and child care and learn about co-ops from someone there,” she said. “Sometimes they’ve seen another co-op in town, but that’s unusual. People rarely know much about the co-op model.”

The initial step, she adds, involves education – explaining what a cooperative is and how it can benefit a group of workers. Later, the potential worker-owners will need to learn the many skills necessary to run a business, from marketing to bookkeeping, from democratic management to the nuts and bolts of the industry they’re entering.

“The impediments to co-op development and growth are similar to those facing any other business,” Melissa Hoover told Truthout. One glaring issue is the lack of capital. “Typically, credit unions don’t make business loans and the larger banking industry sees low-income immigrant women as unbankable, especially if they have little-to-no collateral to put up.” Still, she adds, capital is not the biggest barrier to co-op development – ideology is. “Both the business support system and entrepreneurial support system are geared to the single entrepreneur. If there was a shift toward shared entrepreneurship strategies, we would see a huge growth in self-started co-ops.”

Hoover dubs these ventures “inclusive capitalism” and emphasizes the democratic underpinnings of shared ownership that distinguish worker-owned cooperatives from other for-profit businesses. It’s a huge difference, she adds, and, while some co-ops employ a hierarchical structure – with supervisors overseeing day-to-day operations – every worker-owner is nonetheless expected to participate in decision-making. “It’s what gives cooperative governance teeth and stakes,” she said.

Of course, cooperators sometimes find this confounding since it flies in the face of standard operating procedure.

On the other hand, these features can be exactly what draw a worker into a cooperative enterprise.

Mercedes Rodriguez joined Golden Steps, one of six worker-owned cooperatives affiliated with the Center for Family Life/SCO Family of Services in Brooklyn, New York, two years ago. An Ecuadoran immigrant, Rodriguez came to the United States in 2004 and immediately found work as a home attendant for several elderly and disabled adults. The pay was $7.50 per hour when she started and $9 when she left four years later.

“I stopped working in 2008 when my daughter was born,” she said. “I joined Golden Steps in 2013. I had friends in another Center for Family Life [CFL] co-op and they recommended Golden Steps since I had experience in home care. I’m now a companion to an elderly person who pays for the service out-of-pocket. I remind her to take her medicine, take walks with her, prepare food, pick up prescriptions and do light cleaning. I work six hours a day, several days a week.”

This suits her, she says, because the pay at Golden Steps, $16 an hour, is nearly double her previous salary. This allows Rodriguez to spend more time with her child. “I have a flexible schedule. Before, the secretary of the agency would call me and tell me when I had to work. Now I can choose my clients and decide when I will work each week,” she said. In addition, the co-op’s collective decision-making makes Rodriguez feel a sense of ownership. “We meet once a month and vote on everything. Everyone has an equal vote and everyone makes the same amount per hour.”

Trainees learn to take each others pulses in the Cooperative Home Care Associates training program. (Photo: Jordanna Rosen)

That said, Rodriguez admits that new members of the four-year-old all-women’s cooperative are sometimes flummoxed by the group’s culture. “People don’t immediately understand the difference between a cooperative and an agency and think that there will be a job available to them immediately. We need to explain that there is a probationary period. We also stress that they’ll need to be involved in every decision,” she said.

Vanessa Bransburg, director of cooperative development at CFL, notes that in addition to the higher salary offered by the co-op, there are secondary benefits to becoming a worker-owner. “People’s confidence builds,” she said. “Members have to speak to the press and at conferences and meetings. They develop leadership skills which then transfer into other aspects of their lives.” Bransburg gives a raft of examples: Several women, she reports, members of the nine-year-old Si Se Puede/We Can Do It housecleaning cooperative, became vocal members of the parent-teacher association at their children’s school, utilizing skills gained through membership in the CFL-generated cooperative; others demanded that their landlord provide the heat, hot water and other services they were paying for.

Children also benefit, she adds. Not only do they learn about co-ops, but they also get to see their mothers, aunts, cousins and grandmothers as leaders and innovators.

What are the most common problems? I ask. “Working together can include drama,” Bransburg said with a laugh. “It’s sometimes difficult to step back and swallow what the majority have decided. There is also a time commitment, especially during start-up when you have to go to lots of meetings, do the outreach and marketing, and plan everything. It’s exhausting. On top of this, during the planning stages, there won’t be any money coming in for salaries and everyone needs to be patient. It takes a while for a business to get going and the members of the group need to mesh so that trust and good communication develop.”

CFL provides its co-ops with start-up grants, including funds for brochures, child care during meetings, creation of a website and the development of a well-formulated sustainability plan – and staff are then available for consultation as needed.

Elena Fairley of Prospera, a California-based network of six all-women’s cleaning and food-making cooperatives, says that it usually takes between nine and 12 months for a co-op to move from idea to launch. During the initial phase, Prospera requires members to have an alternative source of income to insure that they don’t rush the process. Prospera further expects co-op members to be community-minded and dedicated to creating opportunities for women. (Prospera was formerly called WAGES, Women’s Action to Gain Economic Security.)

The group’s longest-running company, Emma’s Eco-Clean, was formed in 1999, employs 27 workers and has grossed $9 million in sales since its founding. “When we started in the late 1990s, eco-friendly cleaning companies did not exist so we had a niche market,” Fairley said. “It took off and we began to replicate the model throughout northern California.” This was especially important, she says, since a cooperative party-supply store started by WAGES several years earlier had failed because it could not compete with the big box stores that dominated the market.

A new Prospera business, an as-yet-unnamed paleta firm – creating Mexican-style popsicles – is presently in development with La Cocina, a San Francisco kitchen incubator. Like the group’s other efforts, it will employ fewer than 40 people.

And then there is CHCA, Cooperative Home Care Associates, the nation’s largest co-op with 2,100 mostly women members. Founded in 1985, the co-op employs 100 administrators who manage scheduling, billing, training and supervision. The worker-owners are all licensed home health aides (HHAs), so Medicaid picks up the tab for those clients who are eligible.

A free, month-long, five-day-a-week class prepares potential CHCA members for the job. According to CEO Michael Elsas, after the training is satisfactorily completed, there is a three-month probationary period. “You are then asked to come to a meeting. At that meeting you get a prospectus and if you’re interested in buying a share in the co-op, you’ll need to pay $1,000. You put up $50 and we lend you the remaining $950, which you repay at $3.75 a week. Once you commit to join, you are fully vested and have a vote in the co-op.”

Elsas says that approximately 70 percent buy in.

Worker-owners at CHCA earn $10 an hour. “Our benefits package is 40 percent, $4.09 an hour for health care, vacation, a 401K, sick pay, ongoing training and other benefits,” he said. “We collect about [$18.50] an hour from Medicaid, so we operate with a very tight margin. This is why we depend on grants and outside funding.” Elsas then begins to grin widely, as he reports that the Robin Hood Foundation has, for 25 years, awarded CHCA an annual grant of $1 million. “Ninety cents of every dollar we take in goes to the worker,” Elsas points out. “We’re a business and it’s management’s job to ensure the viability of the company. Even though everything we do is about the worker, we still run like any other business.”

Or do they?

Daphne Berry, a professor of management at the University of Hartford, studied 600 workers employed by three types of home-care agencies: the CHCA co-op, a nonprofit and a for-profit. Her goal was to ascertain if there were differences in how the HHAs felt about their jobs. “Even though their salaries were still low, the empowerment the workers got in the co-op, plus the ongoing training, made a big difference,” she said. “The co-op had much lower turnover. I found that the nonprofit and for-profit were statistically similar in terms of job satisfaction, commitment to the work and benefit to the employees. At the co-op, the workers were still living in poverty, obviously a big problem, but their work situation was definitely better.”

So why aren’t more co-ops being created? I ask. “Our culture is me and mine,” Berry said. “Co-ops involve sharing the running of a company as well as the profit. In addition, there are not enough support mechanisms. Giving a loan to a group of 10, instead of to one or two, seems odd, dangerous. Secondly, there needs to be a psychological shift away from doing something that benefits just you, to doing something that benefits a whole group. Even the faddish classes in social innovation that are part of the curriculum in many business schools focus on one or two generally privileged entrepreneurs who want to do good for the world, rather than promoting the co-op model.”

Nonetheless, Berry is heartened by city-supported efforts to set up employee-owned businesses. She names Cleveland, where several cooperative businesses – including a laundry; a 3.2-acre farm that will grow greens, herbs and other crops; and a solar panel shop – have been established, as a model. Local hospitals, schools and universities have agreed to utilize these businesses, Berry says, guaranteeing that they will not only survive, but thrive. A similar relationship is unfolding in Springfield, Massachusetts, where upholstering and farm co-ops are being set up. Lastly, in 2014, the New York City Council allocated $1.2 million to enable 11 community-based organizations to launch new cooperatives, a process that is underway.

Needless to say, the United States has a long way to go before worker-owned cooperative businesses make a dent in the economy. But it is slowly happening. “People are talking more about economic empowerment, not just for themselves, but for their families and communities,” said Johnson of the US Federation of Worker Cooperatives. “There is also an uptick in interest among millennials, a desire to work differently.” Women have been especially receptive to that message.