Corporations Create the Problem, Co-Ops Offer the Solution

Cooperatives offer a means by which to change the economic and social landscape and directly tackle issues of wealth inequality, outsourcing of jobs and high unemployment. Our current economic and political systems benefit the wealthy. Change will not come from the top down, but from building over and replacing these systems with organizations that directly advance, and are responsible to, the communities they are a part of. By bringing democracy to our communities – in our workplaces, grocery stores and beyond – we can transform society and the economy.

In honor of the 2012 International Year of Cooperatives, and ahead of October, which is Co-Op Month, here are just five reasons why co-ops rock (based on our “10 Reasons Co-Ops Rock” poster):

1. Cooperatives are democratic businesses and organizations, equally owned and controlled by a group of people. There are worker co-ops, consumer co-ops, producer co-ops, housing co-ops, financial co-ops and more. In a cooperative, one member has one vote.

The greatest thing about co-ops is, perhaps, simply what sets them apart from other businesses: They are democratic institutions, controlled equitably by the people who depend on them. There’s no one right way to do a co-op – they can fit different community and individual needs. Some co-ops, such as Red Rabbit Bakery, are owned and managed by the workers. Others, like the Brattleboro Food Cooperative, are controlled by their consumer members.

Contrast this with typical corporations, which are about earning profits for those at the top, often at the expense of the environment, their workers and consumers. Cooperatives aim to benefit the people who use and rely on them. Each member of a cooperative owns one share in the business, and therefore has one equal say over how it works. In addition, if the co-op is doing well, members – not some absentee stock owners – benefit.

2. Because cooperatives are democratically owned by community members, co-ops keep money (and jobs) in their communities.

In a nutshell: Co-ops don’t outsource or just pick up and leave. They work to benefit and contribute to the communities they reside within. This is because they are owned by people that are part of the community. Other development models seek to promote “economic growth” and “jobs” in communities by offering extensive tax breaks and so forth. Major corporations might swing in to take advantage of these opportunities, but then they swiftly move out when those breaks are no longer available – sapping the community dry and leaving it worse off then before. Businesses owned by outside stock owners don’t care about keeping resources, jobs, and money in those communities. Their end game is pure profit.

The cooperative model, on the other hand, is an ideal way to ensure money and resources stay within the communities that generate those financial gains. Mondragon Corporation, a system which today includes more than 200 worker co-ops and nearly 100,000 worker-owners, lifted an economically depressed region of Spain out of poverty and continues to do so today.

“Our co-ops employ more than 1,500 people,” says Erbin Crowell, executive director at Neighboring Food Co-op Association, a network of roughly 30 food cooperatives in the Northeast. “Our co-ops support the local economy through our purchasing power, buying more than $30 million in local products annually. The beauty of the model, of course, is that it is designed to meet member goals and aspirations, not to maximize profit.”

These are but two examples – of many, many more – of communities benefiting from co-ops.

3. Co-ops aren’t charity; they’re an empowering means for self-help, mutual aid and solidarity.

Cooperatives don’t build systems of dependencies on outside contributors or benefactors. Rather, cooperatives are a means by which people who have little can pool their resources, time and/or labor. They are organizations of mutual aid, where individuals work together to achieve their goals – financial security, workers’ rights, access to healthy food and beyond – by benefiting the whole. This is in contrast to other forms of poverty alleviation, environmental justice, community change, etcetera that focus solely on donations and grants and can cause recipients to become dependent on the funders. Co-ops are about everyone working together to address their issues, build solutions and collectively realize their goals.

Co-op members contribute to their organization through participation and voting. Their actions and voices impact the cooperative’s direction. As Emily Cheney of the North American Students of Cooperation in Chicago says about her work in the housing co-op movement, “Living in a housing cooperative – actively sharing responsibilities with others, collectivizing and minimizing your common costs, and standing in solidarity with others to combat issues of housing inaccessibility and discrimination – is an amazingly effective way for folks to realize their own individual power and the complementary power of the collective.”

4. Cooperatives are more resilient in economic downturns. When other businesses might shut down or lay off workers, co-op members pull together to work out solutions.

Co-op members share the benefits in good times and the burden in hard times. In a typical corporation, money made during the good times is siphoned off to those at the top. For example, Caterpillar posted record profits this year and paid its CEO $17 million, all while trying to force a six-year pay freeze on workers. In co-ops, in contrast, surplus is equitably distributed among the equal member-owners and is invested back into the long-term health of the organization and its community.

In hard times, the burden is also equally spread among the members. For example, Red & Black Cafe in Portland, like many cafes and small businesses, has struggled during the economic downturn. But instead of laying anyone off, as a typical business would probably do, all workers agreed to halt their wages for 30 days. They decided to sacrifice together to save everyone’s livelihood.

5. Cooperatives are viable and just alternatives for meeting our economic and social needs, in contrast to corporations that exploit people and the planet.

Co-ops are based on principles of equity and inclusion – not exploitation and greed. Despite some of the challenges they face (getting start-up money, getting people to understand the co-op model, etcetera), co-ops have a track record of success. Look at Arizmendi Bakery in California or Evergreen Cooperatives in Ohio, dynamic co-op systems that are helping create sustainable jobs and democratic economies.

“Even before the collapse of 2008, people were hurting economically and looking for other models,” says Melissa Hoover, executive director of the US Federation of Worker Cooperatives, explaining the major surge of interest her organization has received from people looking to start co-ops. “Worker cooperatives are no longer a novelty or an interesting experiment – they’re a viable, much-needed tool. And people are using that tool.”

In Argentina, worker-owned cooperatives have proven to be the means by which to reduce “hard-core” unemployment in the wake of that country’s economic collapse in 2002-2003. In our neck of the woods in western Massachusetts, nine worker-owned co-ops make up the Valley Alliance of Worker Co-operatives to provide mutual aid to each other and to launch more co-ops in the region.

“What co-op organizers all have in common is a willingness and desire to do what it takes to meet their needs by volunteering their time, investing capital and tapping the deep, often unrecognized resources of their community,” says Stuart Reid, executive director of the Food Co-op Initiative.

Co-ops provide achievable and practical solutions to many of our most pressing problems. So, maybe it’s time to ask: what could a co-op do for you?