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1worker1vote is building a national network of hybrid, shared ownership, regional and municipal ecosystems starting with unionized worker-owned cooperative businesses to overcome structural inequalities of opportunity, mobility, and income. Building pathways out of poverty leading to pathways toward prosperity.

The Liberatory Potential of Union Co-ops | Nonprofit Quarterly

By Carmen Huertas-Noble, Missy Risser-Lovings and Christopher Adams Reposted with permission from the Nonprofit Quarterly

In this time of COVID-19 and an economic crisis that disproportionately impacts BIPOC communities, many are realizing we need an economy that is inclusive and rooted in solidarity to achieve transformative economic justice. An economy based on solidarity must include alternatives to capitalist firms, such as worker cooperatives and unionized worker cooperatives (“union co-ops”).1

Union co-ops can address many of the harms that workers face today. Union co-ops offer an alternative to our capitalist firms/system, which at their core are designed to exploit labor and create a power dynamic that leaves too many workers, especially BIPOC workers, subject to pervasive workplace abuses—including poverty wages, wage theft, and unsafe working conditions.

Union co-ops shift economic and political power to workers and the communities in which they live by providing a pathway for worker-owners to not only share in the profits but also participate democratically in workplace governance. Ownership alone, however, is not enough. The way we own must also be different. We cannot simply replicate the status quo; we must redesign the systems that organize the production, distribution, and reproduction2 of our needs and our wants and how they are achieved.

To acquire a fair share of the economic benefits of what they produce and to address the various crises too many communities face, such as food insecurity, poor health, and poverty, working people must control the aggregate political power of the corporations that form the core of our political economy. Because the power to control a corporation is based on owning governing shares of stock, working people must control those governing shares. Worker cooperatives and union co-ops offer this opportunity.3

The way we value labor must also be different. We must view labor as more than just an expense, but instead as creators of our wealth. Even as the economy opens back up, we still see many businesses continue to exploit their workers, despite those workers being primarily those who were/are deemed essential during this pandemic and were/are a lifeline to all. These businesses claim there is a labor shortage now because some of those who qualify for unemployment (which doesn’t include all workers)4 have chosen not to go back to certain jobs because of low pay.5

To be clear, this is not because unemployment is too high. It’s because these businesses have been paying poverty wages that have been normalized for too long; poverty wages that require the government to supplement through various programs, including the Supplemental Nutrition Assistance Program (SNAP) and Medicaid. The irony is that these very same businesses complaining about workers receiving government assistance have received direct government assistance themselves from the so-called “Paycheck Protection Program”6 loans that were/are substantial and forgivable.

It is not by accident that capitalist workplaces exploit BIPOC and other marginalized communities. In fact, the system was created and is maintained through violence and oppression, all in the name of accumulating and hoarding wealth and power for the few at the expense of many.

Capitalism is all about extraction and othering. African Americans went from being considered capital assets whose bodies and labor were stolen by white supremacist enslavers to exploited workers whose labor, despite building this country’s wealth, is considered an expense to be minimized. We need to reckon with this history and how it has shaped our economy in order to repair and move toward a solidarity economy that helps BIPOC communities to not just survive but thrive.

Why Unionize Worker Cooperatives

While a far cry from the peak union density of 35 percent in the 1950s,7 in 2020, union membership among workers was 10.8 percent; full-time union members had median weekly earnings of $1,144 in 2020, compared to $958 for non-union members.8 And notably, despite unions’ racist history, unionization is most common among Black workers.9

We need an economy that centers humanity and equity. Union co-ops can help workers create stable, well-paid jobs and, critically, correct and prevent some of the oppressive economic conditions many BIPOC and other marginalized communities too often face.

Union co-ops can help workers achieve equitable pay structures, profit-sharing, democratic workplace governance, and local circulation of profits. The goal is to not only build personal wealth but also community wealth.

Cooperatives also prioritize concern for community and worker solidarity. For example, at the peak of the pandemic in 2020, a worker cooperative in North Carolina shifted production to create personal protective equipment (PPE) for medical workers, including the worker-owners of the largest US worker cooperative, Cooperative Home Care Associates (CHCA).10 CHCA, located in the Bronx, is also unionized. Founded in 1985, CHCA has roughly 1,100 members, most of whom are BIPOC, and annual revenues of over $60 million.

Structurally, union co-ops provide protection for workers’ interests as workers, separate from their interests as owners. Because worker cooperatives exist amidst global neoliberalism, worker-managers face pressure to prioritize profit at the expense of a higher quality work environment. Bargaining sessions can help ensure worker-owners’ needs as workers are centered and shop-floor problems addressed.

Additionally, given unions’ deep experience navigating grievance processes, union co-ops offer workers a more stable environment to address disputes, instead of letting pressures build up internally with no mechanism for release.

Union networks, which extend far beyond the workplace of a single worker cooperative, can help set industry standards and advocate for policy changes. Not only does this benefit the economic viability of the cooperative, but it also connects cooperatives to larger movements for economic justice. Unions also offer worker cooperatives access to group benefits, including health insurance and retirement plans. Union training and education funds can help train cooperative members in conflict resolution, industry-specific skills, and democratic governance and management. Unions can also provide research and legal support.

Unions’ Support of Cooperatives and Worker Ownership

Labor unions have, at some level, incubated and partnered with cooperatives since the 19th century. For example, support for worker cooperatives was a core Knights of Labor strategy.11 Not only did cooperatives provide alternative employment for workers during strikes, but cooperatives represented a rejection of the “wage slavery” of industrial capitalism. However, as unions increasingly accepted the capitalist wage system, cooperatives became disfavored among labor.12

Despite some unions’ historical skepticism about employee ownership given their experience with Employee Stock Ownership Plans (ESOPs), many unions today are exploring the potential of union co-ops as models for economic justice. Union co-ops provide an opportunity for unions to build their base, especially in industries that have been historically difficult to organize, like home-based work, which is largely performed by BIPOC workers, work performed by immigrants without work authorization, or independent contractor work. Union co-ops also can help counter the degraded conditions of workers in today’s globalized economy replete with outsourcing, misclassification, and labor hostility. Union co-ops can also be synergistic with the worker self-management model of some unions.

The Role of Nonprofits in Union Cooperative Development

Nonprofits may play similar and complementary roles to unions in developing union co-ops, or democratically accountable business enterprises more generally. An analytical framework named “stakeholder theory” holds that “businesses exist for the groups who make the business ‘a going concern’—that is, groups that are part of the cooperative scheme that allows a firm to come into being and to be successful over time.”13

A January 2021 report of the US Office of the Surgeon General finds that “stakeholder firms…those that have implemented the principles of stakeholder theory…tend to achieve better business outcomes, including greater innovation and higher profits”14 in comparison to non-stakeholder firms. More important than the pecuniary benefits derived from the stakeholder theory approach to corporate governance is the simple matter of injustice underlying the fact that “virtually every achievement in the modern era has been diminished by stark differences between those who benefit and those who do not [emphasis added]…but a vast amount of human potential remains untapped that could contribute to full and fair inclusion for everyone in America.”15

The report describes ways in which nonprofits may contribute to developing the necessary conditions for union co-ops to form and thrive. For example, a community land trust removes real property from the market by restricting its use for a specific purpose to a specific community—a democratically controlled enterprise, for example. Removing the constant threat of losing the physical location of the enterprise through coercive market forces helps to improve the health of the worker-owners of the community and, therefore, the value of a business as measured under the stakeholder theory. Community development financial institutions (CDFIs) similarly may participate in cooperative economic development by providing financial products, technical assistance services, or by serving as fiscal sponsors to other organizations. Services offered by a CDFI may include technical assistance for developing democratically accountable governance and operating structures.

Nonprofits can provide support with basic bookkeeping, invoicing, and other “back-office” administrative work to organizations that are either starting up or transitioning to cooperative ownership with a clear plan for transitioning those responsibilities to the cooperative. Nonprofit social enterprises and service providers may also play important roles in resolving conflicts among members of a cooperative. Ideally, a cooperative, especially while its members are developing the necessary social capital among themselves for effective operation, should have access to a neutral third party to facilitate discussions among members with either perceived or actual conflicting interests. Given the social nature of the work of many service-oriented nonprofits, conflict resolution may be a key role they can play.

Public entities, nonprofits, and subcontractors who administer and deliver workforce development programs can include democratic processes as part of a training or re-skilling curriculum. Nonprofit anchor institutions, such as universities and hospitals, may use their purchasing power as consumers to favor organizations that already are worker cooperatives or are developing the capacity to operate cooperatively and with democratic accountability.

An even loftier goal, especially for nonprofit anchor institutions, may be to look within and consider what a transition to a union cooperative might look like over five, 10, or even 50 years.16 For example, educational institutions, as generators of knowledge, developers of cognition, and drivers of innovation, employ the methods and habits of hierarchy and subjugation within their own governing structures in a manner not dissimilar to for-profit enterprises.17 Whether or not there are well-identified causal relationships between administrative practices among educational institutions and external economic practices, the absence of meaningful opportunities to practice democracy within an institution surely is more likely to result in an absence of democracy outside the institution than to create the conditions for its emergence.

Conclusion

Unionized worker cooperatives are not a panacea, but they do provide workplaces that practice real democracy on a daily basis. For this reason, they can serve as models for building a meaningful movement for economic democracy and transformative economic and social justice. In the meantime, they also provide opportunities to address economic inequality and insecurity, especially for people who face barriers to safe, stable jobs, like BIPOC, immigrants, the LGBTQ+ community, and people who were formally incarcerated.18

Nonprofits can be essential community partners in helping grow the union co-op movement by providing needed resources, including educating about the model, bringing stakeholders and funding together, and helping to build the infrastructure for a robust cooperative ecosystem.

Notes

  1. For more background on union co-ops, see Carmen Huertas-Noble, “Worker-Owned and Unionized Worker-Owned Cooperatives: Two Tools to Address Income Inequality,” Clinical Law Review 22, no. 2 (March 8, 2016).
  2. Specifically, social reproduction. David Harvey and Cindi Katz, “Social Reproduction—Part 1,” Anti-Capitalist Chronicles.
  3. Chris Adams, Carmen Huertas-Noble, and Melissa Risser, “Scaling Worker Cooperatives as an Economic Justice Tool for Communities in Crises”in Lawyering through Crisis: Understanding the Professional Role of Lawyers as Leaders and Problem Solvers in Emergencies, eds. Ray Brescia and Eric K. Stern, (NYU Press, 2021), 233.
  4. For example, undocumented workers are generally not covered by unemployment insurance. Additionally, covered employees must meet several criteria to be eligible for insurance, and claims can be easily contested by employers. See: Department of Labor, Before You Apply for Unemployment Benefits, Albany, NY: State of New York, July 8, 2021.
  5. This is a bizarre way of looking at the problem. See Steve Dubb, “GOP Governors Find a New Way to Harm Workers,” NPQ, June 2, 2021.
  6. Lydia DePillis, “This Company Got a $10 Million PPP Loan, Then Closed Its Plant and Moved Manufacturing Jobs to Mexico,” ProPublica, June 30, 2021.
  7. Drew DeSilver, “American Unions Membership Declines as Public Support Fluctuates,” Pew Research Center, February 20, 2014.
  8. Bureau of Labor Statistics, US Department of Labor, “News Release: Union Member-2020,” January 22, 2021.
  9. Shamed Dogan, “Unions Ignore Long History of Excluding Minorities From Jobs,” St. Louis Post-Dispatch, November 13, 2017.
  10. Steve Dubb, “Masks, Mutual Aid, and Our Broken Supply Chains: A North Carolina Story,” NPQ, April 13, 2020.
  11. Kevin Vazquez, “Union-Coops: Updating an Old Idea for Modern Needs,” On Labor, February 15, 2021.
  12. Eric Nirnbach, “Unions and Worker Co-ops, Old Allies, Are Joining Forces Again,” Labor Notes, September 5, 2017.
  13. “The concept of stakeholders in business emerged in the 1960s and 1970s and gained prominence in the 1980s and 1990s following initial publication in 1984 of Strategic Management: A Stakeholder Approach by R. Edward Freeman.” US Department of Health and Human Services, Office of Surgeon General, Community Health and Economic Prosperity Engaging Businesses as Stewards and Stakeholders—A Report of the Surgeon General(Atlanta, GA: US Department of Health and Human Services, Centers for Disease Control and Prevention, Office of the Associate Director for Policy and Strategy, 2021), Chapter 3, “The Meaning, Purpose, and Opportunity of Business in 21st Century America, Key Takeaways” 48. Accessed June 30, 2021.
  14. US Department of Health and Human Services, Community Health & Economic ProsperityWashington, DC: HHS, 2021, 51.
  15. US Department of Health and Human Services, Community Health & Economic Prosperity, Washington, DC: HHS, 2021, Chapter 7, “A Way Forward for Community Health and Economic Prosperity,” 132.
  16. See Chao Guo, “The Road Less Traveled: Establishing the Link Between Nonprofit Governance and Democracy,” NPQ, May 28, 2019.
  17. Duncan Kennedy, “Legal Education and the Reproduction of Hierarchy,” 32 Legal Educ. 591 (1982).
  18. For more, see: Adams, Huertas-Noble, and Risser, “Scaling Worker Cooperatives as an Economic Justice Tool for Communities in Crises,” especially page 234.
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