New York City Invests in Worker Co-ops — and Equitable Growth

12 Jan 2015 | America's Tomorrow
New York City Invests in Worker Co-ops — and Equitable Growth
Above: Photo Credit: Ronny Nunez; (Worker-Owned Rockaway Cooperatives assembly meeting).
Before Yadira Fragoso became a worker-owner at Si Se Puede, a housecleaning cooperative of immigrant women in New York, she earned $6.25 to $10 an hour in various jobs. She had no control over her hours or schedule and sometimes had to bring her children to work.
 
Now she earns $20 to $25 an hour. Along with the cooperative's 50 other worker-owners, she shares decision making for all business policies and operations. Most importantly, she says, she has greater economic security and job flexibility, so she can spend more time at home with her kids. Joining the co-op "changed my life," she recently told the New York City Council.
 
Stories like this and determined organizing by advocates for a fairer, more inclusive economy have persuaded city officials to invest $1.2 million this year in developing worker-owned businesses in low-income communities and communities of color. It's the largest investment in such businesses ever made by a city government in the United States (though only a tiny fraction of the city's $75 billion budget).
 
The initiative aims to support the creation of 234 jobs and bring training and financial resources to 20 existing co-ops and 28 start-ups. It promises to raise the profile of worker-owned cooperatives as a strategy for equitable economic growth.
 
How worker co-ops spur the growth of good jobs
 
Job growth in New York City since the Great Recession has been concentrated in low-wage industries. Black and Latino communities are unemployed or underemployed at double the rates of Whites. Economic barriers have left more than one in five New Yorkers in poverty and driven income inequality to a historic high. A recent report by the Federation of Protestant Welfare Agencies (FPWA) documents these trends and says they threaten the city's economic growth.
 
The report points to small businesses — the city has about 200,000 — as the largest job creator, and to worker-owned businesses as an effective model for closing income and wage gaps by moving people from joblessness or precarious employment to dignified jobs. Worker co-ops tend to provide higher wages, good benefits, training, and career pathways, particularly in typically low-wage industries like housecleaning and home care.
 
At the eight-year old Si Se Puede, for instance, worker-owners receive 100 percent of the pay for their work — there are no agency fees or middlemen — and receive training in the use of safe, eco-friendly cleaning products.
 
Most successful co-ops provide financial returns to worker-owners, creating avenues to accumulate wealth. And because they are democratically owned and managed, they empower workers, build dignity, and inspire engagement in civic society. "There's no greater medicine for apathy and feelings of living on the edges of society than to see your own work and your voice make a difference," says the FPWA report.
 
A beacon for the burgeoning worker co-op movement in the city and across the country is Cooperative Home Care Associates (CHCA) in the South Bronx. Founded in 1985 with 12 workers, it employs more than 2,000 people, making it the nation's largest worker co-op and a significant driver of employment in the Bronx. Wages and benefits for CHCA home care aides have increased more than 40 percent in the past five years, and turnover is 15 percent, compared with more than 60 percent for the industry overall.
 
New York is also home to several dozen young worker co-ops, mostly in immigrant communities. Occupy Sandy — an offshoot of Occupy Wall Street that mobilized to aid cleanup in the Rockaways after Superstorm Sandy — has seized on co-op development as an important growth strategy for the area, which was struggling even before the storm. The group has partnered with The Working World, a nonprofit organization that provides investment capital and technical assistance to co-ops, to incubate worker co-ops in the area, particularly in the large Central American community.
 
A bakery and a construction co-op have launched, and three more co-ops — juice bar, landscaping, and screen printing — are in development, said Pablo Benson, a consultant for Worker-Owned Rockaway Cooperatives.
 
"A huge component of the long-term recovery effort is to help develop a more democratic form of economic redevelopment," he said. "It's remarkable what can be unleashed when people have the power to make decisions."