By Gar Alperovitz and Keane Bhatt
Truthout | Op-Ed
Sept 24, 2013 - The richest 400 Americans now own more wealth than the bottom 180 million taken together. The political system is in deadlock. Social and economic pain continue to grow. Environmental devastation and global warming present growing challenges. Is there any path toward a more democratic, equal and ecologically sustainable society? What can one person do?
In fact, there is a great deal one person working with others can do. Experiments across the country already focus on concrete actions that point toward a larger vision of long-term systemic change - especially the development of alternative economic institutions. Practical problem-solving activities on Main Streets across the country have begun to lay down the elements and principles of what might one day become the direction of a new system - one centered around building egalitarian wealth, nurturing democracy and community life, avoiding climate catastrophe and fostering liberty through greater economic security and free time.
Margaret Mead famously observed: "Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has." Some of the ten steps described below may be too big for one person to take on in isolation, but many are exactly the right size for a small and thoughtful group committed to building a new economy, restoring democracy and displacing corporate power.
As the history of the civil rights movement, women's movement, and gay-liberation movement ought to remind us, it's precisely actions of this sort at the local level that have triggered the seismic shifts of progressive change in American history.
1. Democratize Your Money!
Put your money in a credit union - then participate in its governance.
Credit unions are commonplace financial institutions that typically facilitate loans for everyday purchases like homes and cars. But behind their unexciting veneer lie transformative possibilities. Unlike the large commercial and investment banks responsible for the 2008 financial crisis, credit unions are nonprofit cooperatives that are member-owned and controlled. These democratized, one-person-one-vote banks already involve more than 95 million Americans as participant-owners. They lend to minorities and low- and moderate-income families to a far greater extent than do commercial banks. Taken together, they hold roughly $1 trillion of assets - the equivalent of one of the largest US banks, knocking Goldman Sachs out of the top five.
Credit unions' direction of capital to community-benefiting endeavors has a long lineage. The Bronx's Bethex Federal Credit Union, founded in 1970 by Joy Cousminer and the "welfare mothers" in her adult education class, is a good example: it now serves more than 9,000 members, has $16 million of deposits and continues to empower local residents with a wide range of services and loans for students and businesses.
Hope Credit Union of Jackson, Mississippi, has generated more than $1.7 billion of financing for more than 130,000 individuals in the Delta region. Half of its loans go to minorities and women. More than a third of its members were unbanked before joining. Hope's CEO explicitly states that one of the credit union's purposes is to ensure that "no one is victimized by the predatory lenders that prey on vulnerable, minority, low-income and elderly residents." Alternatives Federal Credit Union, in Ithaca, New York, lends to cooperatives, worker-owned enterprises, small businesses and community groups and offers microloans to self-employed residents.
While many older credit unions have become quite cautious, it is also clear that collective efforts to direct capital in their communities can work. In Washington, for example, activists from the small town of Vashon formed an organizing committee that was able to get three seats on the board of the Puget Sound Cooperative Credit Union (PSCCU) then worked to open a branch for Vashon. PSCCU was "willing to cede substantial control in exchange for new members and deposits," wrote the LA Times. And, according to the activists, the credit union was "already doing the most aggressive energy conservation lending in the state," including home weatherizations - a good fit for their vision for a coal-free Vashon. PSCCU supported the idea of nonprofit groups using their own savings to guarantee microlending on community projects. And in its first year, the Vashon branch enrolled 16 percent of the population, with local deposits totaling almost $20 million.
These examples point to an opportunity for activists to build a nationwide, democratic, localized, nonprofit alternative to corporate finance - and, where possible, begin to deprive it of the wealth that has become a stranglehold over our political system.
If you don't already have your money in a credit union, move it! And if your local credit union isn't living up to its potential as a democratically owned, community-based financial institution, get involved and organize members to take it in a new direction!
2. Seize the Moment: Time For Worker Ownership!
Help build a worker co-op or encourage interested businesses to transition to employee ownership and adopt social and environmental standards as part of their missions.
Worker-owned co-ops bring democracy and democratic ownership into the economy and into community life. Several older and newer co-ops show what can be done. Equal Exchange's 100-plus worker-owners, for instance, generate $50 million of annual sales while pursuing an innovative agenda to make international trade in coffee and other food products more ethical. The WAGES-incubated green housecleaning worker cooperatives in the Bay Area provide critical job security for the immigrant women who work in and own them. In Chicago, the New Era Windows Cooperative is saving the jobs of workers who famously occupied their factory on Goose Island. And the United Steelworkers, working with the Mondragón Corporation, has proposed a nationwide effort to create unionized worker-owned co-ops that is beginning to bear fruit in Cincinnati, Pittsburgh and elsewhere.
The most common form of worker ownership is the Employee Stock Ownership Plan (ESOP). Although there have been difficulties with some ESOPs, research has shown that workers in ESOPs are much less likely to be laid off than those who are not. Furthermore, ESOPs tend to be more profitable, more productive and more efficient - especially with training in self-management - than comparable firms.
An ESOP works like this: a company sets up a trust on behalf of the employees, into which it directs a portion of its profits. The trust uses that money to buy the owners' shares for the workers, either all at once or over time. Currently, there are 10,000 ESOP firms successfully operating in virtually every sector - 3 million more individuals are now worker-owners of their own businesses than are members of unions in the private sector.
In the next decade, millions of business owners born during the baby boom will retire. And if they sell more than 30 percent of the company to the employees, the owner may defer capital gains taxes (provided that the proceeds are invested in US companies). This incentive could have an enormous impact on America's business landscape. Advocacy for such conversions could be a powerful strategy for building more stable, vibrant worker-owned businesses and economies.
Consider the case of Fort Collins, Colorado-based New Belgium Brewing Co., America's eighth-largest brewery. When chief executive and co-founder Kim Jordan sold the enterprise to its more than 400 employees in 2012, she considered the conversion to 100 percent worker ownership a rare opportunity to "have multigenerational impact." Soon afterward, the worker-owners met to discuss cutting into the company's near-term profits to power their entire facility with wind energy. "Within a minute or so, we had decided as a group to become the world's largest single user of wind power," said Jeff Lebesch, a co-founder.
New Belgium is committed to open-book management, whereby all employee-owners can review finances and provide feedback. It also became certified as a B Corp, which enshrines in the firm's bylaws both social and environmental goals as well as profits.
Conversions to worker cooperatives also confer tax benefits to business owners who decide to sell to their employees. Among employee-owned institutions, co-ops allow for the most democracy. Namasté Solar in Boulder, Colorado - a $15 million-plus-a-year solar energy services firm - converted to an employee-owned cooperative at the beginning of 2011. Its workers own the firm equally and manage its operations on a one-vote-per-person basis. Having also certified itself as a B Corp, Namasté's mission consists of creating "holistic wealth for ourselves and our community." Its worker-owners in their mission statement declare, "We choose co-ownership over hierarchy, democratic decision-making over centralized leadership, sustainable growth over aggressive expansion, and collaboration over competition." They benefit from transparency of all company information, a 4-to-1 cap on the ratio of highest-to-lowest pay, and six weeks of paid vacation.
If you are in a union, you can encourage your union to promote worker ownership, as some already have done. Within the world of ESOPs and co-ops, the potential for organized labor should not be underestimated.
The Massachusetts-based architectural lighting manufacturer Litecontrol is a 100-percent worker-owned ESOP, and 60 percent of its workforce is unionized through the International Brotherhood of Electrical Workers. Industrial brush manufacturer and supplier Maryland Brush Company, also totally employee-owned, allows United Steelworkers union representatives three seats on its board of directors - the same number of seats as management. Recology of San Francisco, a fully worker-owned business, is the largest ESOP in the solid waste industry and is 80 percent unionized through the International Brotherhood of Teamsters.
Cooperative Home Care Associates (CHCA) of the Bronx, New York, is the country's largest worker co-op (and certified B Corp), consisting of more than 2,000 mainly Latina and black home health care providers. CHCA collaborated with the Service Employees International Union (SEIU) to unionize its workforce, with the broader aim of raising the wages of home-care workers throughout the industry (thereby raising the payroll costs of its competitors to measure up to CHCA's higher wages). The United Steelworkers proposal for "union co-ops," which combine principles of worker ownership and labor solidarity, also represents a major step forward in assembling the building blocks of a new economy.
Worker-owned companies deserve your support; the more commonplace they become, the easier they become to launch. Help stimulate the development of worker-owned co-ops and work to encourage retiring owners to sell their companies to their employees (more...)