Testimony by Carmen Huertas-Noble, Director of CUNY School of Law’s Community and Economic Development Clinic, before the New York City Council, Community Development Committee, February 24, 2014
Hearing: Worker Cooperatives – Is this A Model That Can Lift Families Out of Poverty?
Hon. Maria Del Carmen Arroyo, Chair
Hello, my name is Carmen Huertas-Noble. I am an Associate Professor of Law and the founding director of CUNY School of Law’s Community & Economic Development Clinic. The Community and Economic Development (CED) Clinic provides legal support to community-based organizational clients that are creating vibrant neighborhood institutions and organizing for social and economic justice. Our work is grounded in the belief that social justice lawyering is most effective when it is strategically deployed to build the power of low-income and marginalized communities. The work of the Clinic is divided into three project areas: the Worker Cooperative Law Project, the Non-Profit Legal Support Project, and the Tenant Law and Organizing Project. Today, I would like to thank the committee for providing this opportunity to testify in support of worker cooperatives. By way of background, I would like to begin by sharing that before joining CUNY, I played a leading role in providing transactional legal support to worker-owned cooperatives in New York City. Under my directorship, the CED Clinic continues this role by providing legal support to a number of organizations that are at the forefront of creating and/or supporting worker-owned cooperatives, including ROC-NY, Cidadão Global, Green Worker Cooperatives, and the New York City Network of Worker Cooperatives.
Most recently, the CED Clinic has also formed a partnership with Mondragon International, the largest network of cooperatives in the world and a recent recipient of the Financial Times’ “Boldness in Business” award. Through this partnership, The Clinic has started to develop the legal framework for a new hybrid union coop model created by Mondragon International USA, the United Steelworkers and the Ohio Employee Ownership Center. The Clinic is also currently working with Regional Housing Legal Services in Pennsylvania and the Pittsburgh Clean & Green Laundry to create an innovative unionized worker-owned cooperative based on Mondragon principles. Based on my legal experience in representing worker cooperatives for over 10 years as well as my scholarly research and articles on worker ownership, I am here to testify in support of worker cooperatives, not only as an effective job creation strategy but also as a strategy that can provide for transformative economic justice during a time of economic crisis. In fact, given the deepening economic crisis in our country (and globally) now more than ever, is the time to take bold and innovative action and to dispense with business as usual.
Today’s income inequality is at an all time high since 1928, right before the Great Depression. While the one percent of our country is experiencing unprecedented wealth, the other ninety nine percent is experiencing wage stagnation and are working longer hours for less pay. Wage stagnation and the growing number of people working longer hours for less pay has left more and more people unable to provide for themselves and their families. The enormity and ubiquitous nature of today’s income inequality has resulted in a significant increase of Americans, of all walks of life, starting to focus on and experientially understand the structural ills of our current economic system, including how many of our businesses are currently structured.
As the negative societal impacts of how many companies are structured are becoming clearer and clearer, more and more people are experiencing the reality of the U.S. class system and are understanding that economic upward mobility is not as likely, and certainly not a given based on working hard, as they once understood. There is no longer the promise that if you work hard, you will be rewarded and succeed in life. Instead, despite people working even harder than their counterparts from many years ago, they are being paid less and experiencing a number of unacceptable social ills, i.e., an inability to provide for themselves and their children.
Many of these social ills, including unemployment from factory closures/relocations stem from having too many corporations that are owned by absentee owners and that have no loyalty to the communities in which they are located and the people that they employ. These corporations are willing to exploit their current workers, offshore jobs to further exploit workers abroad, and to pollute communities in the name of maximizing profits for a few while simultaneously degrading the lives of many. Some people claim that this is simply the nature of capitalism, but we know better. We need a much more inclusive form capitalism. There are other successful ways to establish and operate businesses that are competitive and profitable, while also actually having a positive impact on the communities they are located in.
One promising way is through creating and supporting more worker cooperatives and union-coops. Worker cooperatives and union-coops offer a big part of the solution to the many problems, and their root causes, that we see today. Worker cooperatives and union-coops are locally owned and locally based. They are more likely to pay their worker-owners equitably, provide better working conditions and are less likely to pollute the very communities in which they are not only located in but live in. Societal benefits from worker cooperatives and union-coops are also more inclusive and sustainable.
Government support of worker cooperatives and union-coops can take many forms. To name a few, the City can help worker cooperatives and union-coops realize their transformative potential by providing funding to incubate worker cooperatives and union-coops, providing funding for technical assistance and providing worker cooperatives and union-coops a preference in the City’s procurement process.