Worker co-operatives: from hippy fringe to economic mainstream

We hear a lot about job creation as a tool for getting people out of poverty. But let’s face it, even if you have a job that pays enough for the rent, food, and a couple movies each month, you may not be accumulating wealth.

According to a recent study by the consulting group Asset Building Strategies, 22% of Americans -- and much larger percentages of women and minorities -- are what’s called “asset poor.” That means if their income went away, they would not have enough money or belongings to sell to keep them living at the poverty level for 3 months. So even if an economic recovery generates more jobs, those jobs alone may not be enough to create long-term financial stability.

As part of our project exploring the Economic Edge, KALW’s Rina Palta reports on how the worker-owned co-op may be filling that void.

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CAB RADIO: One-five-seven South Park. 21, where are you?

ATHAN REBELOS: My favorite part of driving a cab? That’s very easy. For me, it’s like I’m always on vacation.

RINA PALTA: Athan Rebelos works with Green Cab, a company that operates a fleet of fuel-efficient taxis out of San Francisco’s Mission District. Rebelos says a lot of cabbies think of their job as temporary -- a way to make extra money while they’re in school, or a stepping-stone after immigrating to the U.S. But for him, it’s more of a calling.

REBELOS: I used to own a cab company up in Seattle. Sold it in 1999, moved down here. Vowed to stay out of the cab business. I did that for about a year. I saw a cab sitting at a red light one day and I was looking at it, and I was like, I really need to be driving a cab again. So I went and applied.

Now, after decades in the industry, Rebelos has found a company where everyone treats driving a cab as a career. And he attributes that attitude to the fact that Green Cab is a worker-owned co-operative.  

REBELOS: I’m buying into this and I want to be here. I want this company to succeed. You have a personal stake in it.

Green Cab was founded in 2007 by eight cabbies who wanted to build a worker-friendly business in a notoriously tough industry. Three years later, they have 12 cabs on the road, and some 50 workers, over half of whom have an ownership stake in the company and a vote to elect a managing board.

To run the place, the board hires a manager, which happens to be Athan Rebelos. Rebelos says that his job is like the job of any manager. The difference is, drivers, dispatchers and administrators confront him if they don’t like his decisions. And ultimately, if they want to, they can replace him.

REBELOS: And I find that sometimes it can be very frustrating for myself to have to deal with that, but it is a better process. It seems like, there’s been occasions where I’ve had to reevaluate my decision or reevaluate a proposed change in policy, and we always end up coming up with something better than what I had come up with initially. And it’s much more effective. It’s more strenuous, but it’s more effective than my experiences were with my sole proprietorship.

When you hear the word “co-op,” chances are the first thing that comes to mind isn’t “cab company.” Co-ops are more commonly associated with grocery stores -- the kind that sell home-ground peanut butter and goji berries.

MELISSA HOOVER: And to be sure, natural foods are a huge part of the co-operative sector.

Melissa Hoover is the executive director of the US Federation of Worker Cooperatives, a title that does little to dispel the stereotype of co-ops as bastions of communism.

HOOVER: But that perception of co-operatives as a sort of countercultural, utopian, seventies alternative is really changing, I think. Worker co-operatives in particular, may used to have been seen as a way for middle class people to create an economic alternative so that they didn’t have to get a regular job working in a corporation or something like that. And I think the difference now is that many people are seeing worker co-operatives as a way for poor and working people to join the economic mainstream.

Hoover says that as manufacturing jobs have left the U.S., places like Oakland and Cleveland have been searching for ways of filling the economic void.

HOOVER: Similar with Detroit, people are really interested in co-operatives in Detroit because they’ve been abandoned by the infrastructure of business and capital. But it’s not easy, it's not easy to think about how to institute democratic management. It’s not easy to think about how to create ownership opportunities for people of limited means.

For ideas, they’ve been looking to Europe. Specifically, a network of worker co-operatives called Mondragon, which is located in the economically depressed Basque region of Spain.

HOOVER: They’re the 7th largest corporation in Spain, they manufacture items that are used throughout Europe. They have, in recent years, they have gone global, they have entered the global economy.

Mondragon has thousands of workers and does billions of dollars of business every year. The company has an extensive corporate structure, a collection of companies, some in developing countries, that makes products from microchips to appliances to bicycles. The key is that while Mondragon is a competitive company, it has core principles that supersede making a profit. Namely, democratic rule, employee ownership, and importantly, long term sustainability.  

HOOVER: So what I see happening in the next 5, 10, 20 years, is a cross-pollination between the worker co-operative world and the principles that are so appealing to people and the actual practical know-how of working in the market.

Doreen Allen is one such crossover from the for-profit world to the co-operative world.  

ALLEN: All of our products are what we call free and clear. So they are free of perfumes and dyes. 

Allen manages a worker-owned housecleaning company called Home Green Home. She’s at the company’s office in San Francisco's Mission District, prepping for training two new members in green cleaning.

DOREEN ALLEN: We actually opened our doors on February 16th of 2009, right in the heart of the recession. And we started our business with 6 worker-owners, and we worked hard to get our first clients. All the worker owners understood that it’s their business and they need to grow the business.

Home Green Home is part of a network of co-operatives that do green business and were founded through the efforts of a non-profit called WAGES. It’s more directly linked with the anti-poverty movement -- WAGES recruits mostly Latina women and gives them the legal framework and managerial mentorship to build co-operatives.

ALLEN: So I work in a hybrid position, really in social enterprise. Which is what our green cleaning co-operatives are. They are for-profit businesses with a social mission.

Most of the growth in worker-owned co-operatives seems to mirror that of the larger economy. Like Green Cabs and Home Green Home, they’re mostly service sector businesses and a lot of them are environmentally conscious. And as the economy recovers, co-ops may prove to have a viable structure for the manufacturing world as well. In fact, Mondragon recently announced a collaboration with United Steel Workers, to explore whether co-ops might help revive their embattled industry.

In San Francisco, I’m Rina Palta for Crosscurrents.