Prosperity for the Long Term: Cincinnati Union Coop Initiative

Reposted with permission from Democratic Promise.

By John Clay

Cincinnati is an incubator of locally-rooted, democratically-run businesses. This spring I visited with some of the people who are making it happen. Ellen Vera and Phil Amadon, both of Cincinnati Union Cooperative Initiative, or CUCI, joined me for lunch and conversation at a local Cincinnati cafe. Ellen also is an organizer for United Food and Commercial Workers (UFCW) Local 75.

CUCI is dedicated to building employee-owned cooperative businesses whose employee-owners are also protected by a union collective bargaining agreement or, in other words, are unionized workers. The model, called “union cooperatives” is inspired both by the highly successful Mondragon Incorporated cooperatives of Spain and by the considerable success of US labor unions in protecting, against heavy odds, the rights and wages of American workers.

Over enchiladas, salad, and coffee I learned about the union coop businesses, present and future, that CUCI is bringing to Cincinnati. One project, Our Harvest Coop, launched in 2012, is an employee-owned cooperative business which operates two farms as well as a food hub that provides distribution and technical assistance for local growers and sells local produce directly to consumers as well as to grocery stores and restaurants. Our Harvest’s employee-owners are members of UFCW Local 75.

Another project, Sustainergy Cooperative, launched more recently and is an employee-owned cooperative business whose services help make commercial, institutional, and industrial properties greener and more energy-efficient. Sustainergy’s employee-owners are members of the International Brotherhood of Electrical Workers Local 212 and Pipefitters Local 392.

Ellen admitted that it is hard for her union local to focus on organizing union coops, which might have only ten to twenty workers in the early stages, versus organizing corporate businesses which might employ hundreds or even thousands of workers. Phil, long an active leader within the machinists union TCU/IAM Local 6760 and now a board member of CUCI, explained that in an economy where employee-owned coops are a tiny fraction of a mostly big-corporate workforce, labor unions must continue to organize corporate employees.

As a dues-paying member of Minnesota Association of Professional Employees Local 501, I whole-heartedly agree. Labor unions must organize for the present reality—a workforce employed by conventional corporations. And simultaneously labor unions must organize for future necessity—a workforce employed by union coops.

After lunch, Ellen showed me the future location of another CUCI project: Apple Street Market. A modest commercial building among the homes, churches, and small businesses of Northside Cincinnati, Apple Street Market will be a hybrid employee-owned and consumer-owned grocery store. With a feasability study completed and 650 households already signed or pledged to be member-owners, the store is moving toward launch.

We wrapped up with a visit to the original urban farm of Our Harvest Cooperative. The property is part of Bahr Farm, a fixture of the College Hill neighborhood of Cincinnati. Our Harvest leases a portion of the farm from Dale Bahr, while Dale continues to farm some of the land himself.

I met Steve Dienger, Our Harvest assistant farm manager and farmers Eliezer Rodriguez Galarza and Jose Avalos. Jose was tending the nursery where plants get a head start on the growing season. And Steve and Eliezer were running a hand-driven motorized tiller small enough to guide through the hoop houses that shelter young plants from early spring’s final frosts.

Steve, who is Ellen’s brother, talked of coming back to his family’s heritage of farming. His grandmother, he joked, had run from farming the first chance she got and was happier with city life. Now some of the family has come back to farming with a new business model: the union cooperative.

Why are union coops a future necessity? Because union organizing victories in conventional corporations are no longer sustainable.

Conventional corporate owners can create huge profits by taking the total value produced by their employees and paying back just a portion of it in wages, while splitting the rest between executive salaries and shareholder profits. The lower the wages, the greater the share left over for executives and shareholders.

This creates a strong incentive for conventional owners to keep labor unions out: If unions can bargain for better worker wages, then the profit, even if still large and growing due to growing revenue, is not quite as large as it would have been if wages were suppressed.

Indeed, throughout American history labor unions have had only limited success organizing employees to bargain for better wages because in American culture the principled right to ownership and authority over the corporation continually has trumped the principled right of workers to a fair wage. And owners, with the ultimate authority to decide who gets what share of revenue, have always carried a monied influence hard for wage workers to compete with.

Labor unions held significant wealth and political power for a brief period in US history, from the 1930s through the 1950s, but the success rate has been declining for decades. The share of US workers who are union members has been cut by 60 percent since 1970, to about 11 percent of US workers today, according to trade union density statistics from the Organization for Economic Cooperation and Development.

It’s not hard to imagine that declining worker bargaining power resulting from declining unionization is one reason why US median family income has stagnated during the same span of years and today is little more than it was in 1970.

The resources available to labor union organizers can’t come close to the resources of corporate owners arrayed against them. Declining union memberships mean fewer US workers are paying the dues that fund union efforts. And stagnant median wages mean that dues per worker, which are a small share of wages, are stagnant as well.

Meanwhile the resources available to conventional corporations are great and still growing. Since 1970 US corporate revenue has multiplied 16 times over, to $9.9 trillion in 2014, while US corporate profits have multiplied 21 times over, to $1.7 trillion in 2014 after adjusting for inflation. (See US Bureau of Economic Analysis, Section 1, Table 1.14, Line 11.)

And corporate owners do not stand alone like unorganized workers do. Corporate owners share a common role in the economy, are politically active, hold shared principles, and own significant wealth. In other words, they are a powerful political-economic community, both nationally and locally. And it is political-economic communities—not politicians and not individual citizens—who move government policy. (For more on this, see Where’s My Paycheck and My Democracy?)

The challenge for working people becomes greater as the wealth of conventional corporations grows and with it their power to move government policy in their favor. State “right-to-work” laws, which have the effect of defunding labor unions, are a prime example.

As a powerful political economic community, corporate owners move policy through more than just election campaign contributions. They can dominate public discourse through paid advertising and direct ownership of news services. They can reward or punish cities by opening or closing factories. They can make or break private or public careers.

And because conventional corporate governance concentrates wealth and power—one-share one-vote instead of one-person one-vote, so that more wealth buys more votes—pro-corporate policies by definition benefit the few instead of the many.

But the opposite would be true of politically active employee-owned cooperatives. Pro-coop policies by definition would benefit broad ownership and broadly shared wealth and decision-making.

Labor unions no longer hold the power they once held to win and sustain their wins: not in company-by-company workforce organizing and not in federal, state, or local policy. Sustainable gains for America’s working majority depend on the creation of a new base of political and economic power, on businesses cooperatively owned by working people themselves.

It will be a long road to build a large community of cooperatives which are politically active, hold shared principles, and own significant wealth—enough to serve as a counterbalance to conventional corporate power. But it’s the only road to a sustainable future for America’s working families and for all of us.

So the two labor organizing strategies have to go hand-in-hand: Organize conventional big corporations for the near term. And build employee-owned union coops for the long term. Labor unions and their community partners in Cincinnati are doing both right now.

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