Creative economy—one year on

Posted: 15 January 2016 in Uncategorized

coop-poster

We know that inequality has been growing in many U.S. cities and metropolitan areas since the crash of 2008. Back in 2011, I suggested that “a creative way of getting out of the current crises created by capitalism” would be for cities, regions, and states to establish something like an Office of the Creative Economy, whose task would be to “grow a diversity of noncapitalist enterprises.”

As it turns out, New York City did just that, by approving a city budget that contains a $1.2-million program—the New York City Worker Cooperative Business Development Initiative—to fund a community of nonprofit providers to facilitate the development of cooperatives. The idea is to build on the experience of Cooperative Home Care Associates—the largest worker-owned cooperative in the country—and start new businesses, support existing businesses, and expand the promise of workplace democracy to hundreds of low-income residents throughout the five boroughs.

WCBDI

Well, the first annual report of the Worker Cooperative Business Development Initiative (pdf) and the results are promising. According to Oscar Perry Abello,

during the first year of the initiative, the city and its partners have supported the creation of 21 new worker cooperatives. That alone nearly doubles the number of worker cooperatives in NYC, not counting any that may have gotten started without the city’s support. Just 23 worker cooperatives existed in New York City as of January 2014.

The WCBDI, which NYC’s Small Business Services (SBS) administers, was reportedly the largest investment to date in worker cooperatives by a city government in the U.S. The lion’s share of the money went to 10 implementing partners, located throughout the city. A small portion also went to the CUNY Law School’s Community and Economic Development Clinic, which provided legal assistance across the portfolio. . .

The report finds that six of the new worker cooperatives got started with support from Green Worker Cooperatives, an organization dedicated to incubating worker-owned green businesses. They’re located in the South Bronx, for many years the nation’s poorest congressional district, and also home to Cooperative Home Care Associates, the nation’s largest cooperative, with more than 2,000 members.

Green Worker Cooperatives got a $156,750 WCBDI grant that went to support a range of initiatives, including their existing Co-Op Academy, a 16-week intensive workshop focusing on the principles and basics of starting and running a worker cooperative. With the extra support from the WCBDI, they provided additional individualized support to participants throughout the course. The extra resources also allowed them to teach a course at Bronx Compass High School, as a result of which, students launched Syllable Cooperative, a silk-screening business. Other cooperatives launched include a travel planning service, two cleaning services and an arts education service.

The WCBDI also reported providing 84 services to 24 existing worker cooperatives. The New York Network of Worker Cooperatives (NYC NOWC, pronounced “nick nock”), which got the smallest WCBDI grant of $15,000, accounted for 30 of them. Based in Manhattan, NYC NOWC is the local affiliate of the USFWC. Since their founding in 2009, they’ve primarily served as a co-marketing service for NYC’s worker cooperative businesses, while also promoting visibility and understanding of the worker cooperative model. They also engage in advocacy work at the city and state level to drive more investment into worker cooperatives. NYC NOWC was an all-volunteer organization until recently, whenWCBDI allowed them resources to pay for providing business, legal, marketing and financial services to 30 worker-owned businesses and startups. Some of the resources also went to support additional specialized workshops at their annual NYC Worker Cooperative Conference. The workshops focused on business networking, financial assistance and electing a board of directors.

Let’s be clear: worker cooperatives are not the only form of creative economy. There are lots of ways of harnessing and using the surplus to create a less-unequal, more democratic economy. And, as the experience of Cooperative Home Care Associates shows, while it is certainly a more humane company than most of the others in the industry, it also has its limitations:

In a sense, CHCA is a study in scale for the co-op movement in the United States, especially in traditionally low-wage occupations. Is it possible to remain democratic while employing thousands, rather than dozens, of workers? Elsas and CHCA leadership think so. But the limiting factor might be the wages of the work and the need to change the broader industry as a whole first. When people are just barely making ends meet, they might not have much time to engage in workplace democracy. Elsas readily admits that voter participation is low in the elections for the eight worker board members. And of the 2,000 workers employed by CHCA, only half are actually worker-owners. This is despite the fact that CHCA makes it extremely easy to buy a $1,000 share of the company: Workers have to put up just $50 to get ownership privileges; CHCA provides an interest-free loan for the remaining $950 and then deducts $3.50 a week until that loan is paid off.

CHCA is faced with outside constraints on how much it can pay its workers. Unlike most industries, prices for home care service are effectively set by the government. Through Medicaid, Medicare, and other programs, the government pays for 73% of billings in the $61 billion home care services industry. Private insurers pay another 15%.

Still, what’s happening in New York City is one important step, an example for other cities around the country, in rethinking current economic arrangements and creatively making a different kind of economy.

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