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Community-Based Cooperatives

by Mark Winston Griffith, Jul 14, 2004
 

Omar Freilla is unusual. A person of color under 30 years old, Friella is attempting to start a worker cooperative in New York at a time when community-based cooperatives have been nostalgically relegated to the dustbin of counter-culture experimentation from years gone by.

Freilla's project, for which he recently received a grant from the Open Society Institute, is called the Green Worker Cooperatives and is dedicated to creating worker owned and environmentally friendly manufacturing businesses in the South Bronx. In a worker cooperative, the employees are the owners and receive an equal share of all profits. With its neighborhood base, Green Worker Cooperatives seeks to create local manufacturing jobs through the reselling of salvaged construction materials. Freilla has recently completed a feasibility study and is working on a business plan while searching for warehouse space.

Community development strategies over the past decade have been largely distinguished by their individual-based approach to fighting poverty. The prominence of programs like the Earned Income Tax Credit (a federal income tax credit for low-income people) and the growing popularity of tools like Individual Development Accounts (programs that help people acquire assets using savings accounts and financial incentives) and school vouchers (programs designed to allow students from poor families to attend schools outside their public school system) reflect a social welfare vision in which low-income people are seen more as isolated, entrepreneurial contenders for the American Dream rather than inter-dependent participants in a community-wide, social improvement effort.

Of course, there is no reason for these visions to remain mutually exclusive. But formal, neighborhood-based, cooperative economic development, which is a powerful way for us as New Yorkers to interrupt our respective rat races and find common ground with our neighbors, is hard to find in New York, even in our day-to-day language. These days, when most of us hear the term "co-op" in New York we have visions of yuppie-owned units of real estate. Rarely do we talk or think of co-op or "cooperative" as a social value or a model for how we seek to live and interact with our neighbors.

Service, Not Profit

Cooperatives are first and foremost businesses that are owned and democratically controlled by either the employees or the customers who use the services of that business, as opposed to outside investors. Cooperatives are created to provide a quality, affordable service or product, rather than reap huge profits. In most cases, surplus revenue is returned to the members in proportion to their use of the cooperative, not proportionate to their "investment" or ownership share, according to the National Cooperative Business Association. All community-based cooperatives are driven by a local need to provide access to certain services or generate certain economic activity, although the location of cooperatives in New York often says as much about the left-leaning agenda of the organizers as it does about the income level of the community.

Other than organizations like Cooperative Home Care Associates, a worker-owned home health care agency that currently employs over 700 Black and Latino people (most of whom are formerly public assistance recipients), there were few models of community-based cooperatives in New York that provided Freilla with inspiration.

New Yorkers are probably most familiar with consumer cooperatives such as community development credit unions which provide low-cost financial services and credit to under-banked New Yorkers. If you are fortunate to live in the right neighborhood, you may have also encountered a food coop, like the Park Slope and Flatbush Avenue Food Co-ops in Brooklyn, or the 4th Avenue Food Co-op in Manhattan. Community Supported Agriculture projects, which are sprinkled sparingly throughout the city, serve as small, more informal associations in which local people come together to buy mostly organic fruits and vegetables from local farmers.

And yes, there are housing cooperatives that actually live up to their names. Housing Development Fund Corporations - or limited-equity coops - offer low-income tenants the ability to come together and execute control over their living conditions.

Challenges

According to Freilla, the Green Worker Cooperatives is an organic outgrowth of the economic conditions in the South Bronx. "Everybody wants a job where they can receive some dignity and exert more responsibility", says Freilla. Not only will local people be assured a living wage at the Green Worker Cooperatives, but training will be "front loaded" so that the skill based attained at Green Worker Cooperative is transferable.

Just the same, it will be important for Freilla to be aware of the challenges he will undoubtedly encounter. Ironically, the biggest hurdle that urban American Coop organizers face is the one feature that makes coops such effective alternatives. Any cooperative operating in New York has to contend with the fact that the sharing of profits, decision making and corporate responsibility is almost antithetical to the way we are used to shopping, consuming and working.

For example, I sometimes hear complaints from members of the Park Slope Food Coop - the longest running food coop in New York City and the largest wholly member-owned and operated food coop in the country - about the work hours that each member is required to contribute. And yet, the strict enforcement of these voluntary work hours is arguably the single most important reason why the Park Slope Food Coop has thrived since 1973. The collective investment of time is the sweat equity that enables the members to enjoy reduced prices on quality, otherwise high-priced, food items and even enjoy perks like free, while-you-shop, daycare.

Many members, no matter how strong their politics, find participation in cooperative institutions akin to walking up a crowded "down" staircase. When I was chairman of the board of the now defunct Central Brooklyn Federal Credit Union, most of my fellow 5000 members were fiercely proud of this Black-run institution, almost nationalistically so. But despite the cultural force that the credit union represented, members often couldn't resist thinking of it as a glorified bank (it didn't help that we were located in a former bank branch and adopted all the visual trappings of a bank). Consequently members often acted like traditional, non-shareholding, bank customers. They didn't realize that when they didn't pay their credit union loan, for instance, they were actually stiffing their neighbors and depriving themselves of financial dividends in the long run. In cooperatives, perhaps more so than any other kind of business, what goes around, comes around.

Democracy and non-hierarchical, collective decision-making can also prove challenging for many corporate-trained principals of cooperative ventures. Different kinds of cooperatives observe widely divergent forms of membership-led government, but universally speaking, when your mind is trained on providing a service it is tempting to make unilateral decisions and rationalize it as efficient business practice.

Freilla has already had to confront the ways in which cooperatives don't fit neatly into our popular imagination. A worker cooperative is neither an advocacy nor traditional service-oriented not-for-profit and while approaching foundations for grants during his start-up phase Freilla discovered that his project confounds program officers using standard funding guidelines. The fact that the Green Worker Cooperative includes training programs and represents a little-understood industry -- sustainable waste management and resale -- makes it that much more difficult to categorize.

One day in the future, when different political and economic conditions hold sway, maybe neighborhood-based cooperatives will be closer to the rule than the exception. Until that day comes, you might want to consider joining or even starting a coop, even if it's a small, informal venture between you and your friends. It may not only offer a more humane way to shop or work, but perhaps a better way to live.

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