When the Workers Run the Show
By April Dembosky
SolidarityEconomy.net via Financial Times
Business cycle: co-op member Brian Drayton mends a bike at Spokes, one of the co-operatives setting up in the Californian city of Richmond, home of the second world war’s emblematic ‘Rosie the Riveter’
August 27, 2012 - James Johnson’s father was a garbage collector. His mother worked in the cafeteria of the local school. They now are both unemployed, making ends meet through government subsidy programmes. Mr Johnson, 21, has different plans for his career, building a business where he can never be laid off.
Richmond Spokes, the bike shop where he works, has no boss and no owner. It is just months away from becoming a fully-fledged worker-owned co-operative, where all six employees have an equal share in the company and an equal say in how it is run. That sense of power and purpose is something Mr Johnson never had at his previous job doing computer repairs. “The computer store was just another job,” he says. “Every day when I was going to work for the man, I had to keep repairing my bike just to get to the job. I thought, why not just focus on fixing the bikes.”
The shop is one of several co-operatives in the early stages of forming in Richmond, California, a city suffering from high crime and poverty rates. Unemployment among the population of just over 100,000 people has hovered around 18 per cent this year, well above the current national average of 8.3 per cent. City officials have recently pinned their hopes on co-ops as a key strategy for shifting the local economy and stemming social problems. They believe co-ops can create more, better jobs and stimulate spending at other local businesses.
“It’s really about creating democracy in the workplace and giving workers a sense that they own their own jobs,” says Marilyn Langlois, a former assistant to the city mayor who is now running for city council. “They can collectively make decisions that will benefit the business, and keep the money in the local community.”
Sometimes tagged as “hippie capitalism,” worker co-operatives are also seen by some as another tool for fostering business as the US economy remains in the doldrums. According to the US Federation of Worker Co-operatives, these businesses are mostly in urban areas, at businesses such as restaurants and cab companies. In other industries, such as home healthcare, co-ops have helped to prevent employee attrition and provide more reliable care for the elderly. “The worker co-op takes a profession that is low pay, low morale, and high turnover and makes people worker-owners so they’ve got a vested interest in that business,” says Liz Bailey, interim chief executive of the National Cooperative Business Association.
The movement in Richmond began after Gayle McLaughlin, the city mayor, and Ms Langlois visited Mondragon Corporation, a collection of worker-owned co-operatives in the Basque region of Spain that has provided 83,000 jobs in manufacturing, construction, finance, and other fields. Ms McLaughlin saw potential in the structure to address some of the entrenched social problems facing Richmond.
“After visiting Mondragon, it became clear to me that worker-owned co-operatives operate from the same values that we promote in Richmond – values of social, economic and environmental justice,” she says.
During the second world war, Richmond became an industrial shipbuilding centre, cranking out 747 battleships. African Americans from the southern US were offered free one-way train fares to Richmond to become part of the local workforce. Women became welders. The emblematic image of Rosie the Riveter, the bicep-flexing woman used to attract housewives to factory jobs during the war, was inspired by workers from Richmond. When the war ended, the white soldiers came home and claimed what jobs were left in Richmond. Black workers were displaced from company housing, and could not get the same home loans or GI benefits as whites. Those racial disparities have persisted to the present day, Ms Langlois says, with the lack of jobs perpetuating a cycle of poverty, drug problems and crime.
Today, Chevron, the oil and natural gas corporation with a refinery here, is the single biggest taxpayer in the city, although only 5 per cent of its employees live in Richmond. An explosion at the refinery in August, which emitted plumes of black smoke over the city prompting orders to local residents to stay indoors with their windows and doors shut, further exacerbated tensions with members of the community who say their property values and health have long been compromised by pollution from the refinery.
“It makes it even more clear that Richmond has been taken advantage of by corporations,” says Lexi Hudson, a member of a new worker-owned catering co-operative, Liberty Ship Café, specialising in healthy, local food. “We’re trying to build the economy from the roots up.”
Chevron said it is committed to operating “safely and reliably”.
While the city is trying to attract other large businesses to Richmond, including an extension of the nearby government research laboratory run by the University of California at Berkeley, it is also trying to facilitate the development of small co-operatives such as Liberty Ship. The mayor hired a part time consultant for the current year to provide training and assistance to new co-ops. So far, there is the bike shop and the catering business, as well as a bakery and solar installation co-op planned.
Solar Richmond, a non-profit organisation that provides training in solar panel installation and marketing, is in the process of writing the rules and policies for its co-op, which it plans to launch in the autumn. Kandea Mosley, the deputy director, explains that many people who have done the training programme have difficulty finding full time jobs because of past incarceration or inconsistent work patterns. The non-profit started as a temporary work agency, which helped some trainees get permanent jobs. It decided to foster a co-op after seeing a similar model in Cleveland, Ohio, pioneered by the Evergreen Cooperatives, find success in blighted neighbourhoods where education levels and job prospects were low. “It’s not a silver bullet,” Ms Mosley acknowledges, as she walks through a public housing development where trainees installed solar panels on the roofs. “It’s a long-term community development strategy.”
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Solar Richmond is funding its co-op, Pamoja Energy Solutions, through a charitable grant from a foundation. But other co-ops, such as the Richmond Spokes bike shop, that do not have the support of an official non-profit, are struggling to find investors. Banks are suspicious of co-operatives, says Wayne Landers, one of five founding directors of the new Richmond Worker Cooperative Revolving Loan Fund, which will begin making loans to co-ops next month. “Banks do not understand or trust the distributed leadership structure,” he says. “They would like to go to one CEO or one chief financial officer. They want it to be very cut and dried. In the co-op community, we need our own financing infrastructure.”
At Richmond Spokes, the members are aged between 12 and 21. None of them has money to invest in the co-op, so they agreed no one gets paid until the shop earns enough for everyone to be paid equally. Until then, they’re still working out how to navigate the flat management structure, where they each rotate through the various roles of the shop, from lead mechanic, to sales rep, to what they call the “IC,” the person in charge. Currently that is Mr Johnson.
“I’m still figuring it out,” he says. “You have to oversee people without actually being in charge, and communicate information without seeming like you’re bossing them around. You have to see things in a new light.”
Starting a co-op
Forming a worker-owned co-operative involves overcoming three main challenges, says Liz Bailey from the US’s National Cooperative Business Association:
--Investment: Unlike conventional entrepreneurship, you have to raise capital from your own members, based on what they can afford.
--Management: When setting up and running a co-op, the culture of the workforce changes from being employees to being management. If you have a group that has always worked for someone else, a growth period and training are required to help people develop the new mindset.
--Time: A co-operative is not built overnight. Incorporation of a co-op may take longer, in order to build a sense of ownership.