Worker, Consumer, Producer….Owner
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Cooperatives: A Nice Idea or an Essential Economic Alternative?
Carl Woodruff arrived in Central Massachusetts about three years ago in order to join two colleagues to work on a new design and construction project for what is now the Mill 180 Park space in Easthampton. He had just come off of three months of travel, punctuating a long, seven year stretch in New York City working primarily in scenery shops that catered to the fashion industry.
“That industry particularly highlighted for me the problem with a single bottom line.” Carl said in an interview with Spofford. “It’s the most lucrative industry I’ve ever been in, the money just never stops flowing. It’s very creative. It’s all about the look. We did a lot of visually stunning work, and that was exciting and artistically rewarding, but it was ethically void.”
What makes Carl’s tale of his work in New York, and the work he and his colleagues have done subsequently through the company they formed, Oxbow Design Build, notable is that it is emblematic of a growing movement among businesses and their founders to consider far more than just profit. One of the ways many companies have sought to bring about change and operate in a way that is more mindful of their values is by incorporating as a worker-owned cooperative, a structure used relatively rarely in the United States. This structure is seeing an upswing, and is supported by a growing number of organizations that seek to rectify the inequities of our economic system with a entirely different approach to the purpose of business.
“We all have our own individual stories of previous employment experiences where we felt disempowered or we recognized inefficiencies or issues that we weren’t compelled to address because we would see no benefit from that.” Carl said. “Not just for ourselves and our own experiences, but witnessing other people’s experiences, whether they were friends or coworkers or other peers, and just seeing the void of the typical employer-employee relationship where the employee is never fully satisfied, never fully motivated, to really do the best that they can.”
The project that brought Carl up to Massachusetts in the first place ended up being a huge success for the company. What had started as the design and construction of an indoor structure devoted to hydroponic mushrooms ended up becoming a much larger fabrication and design project for the whole space. Carl and the colleagues that are now his business partners formed an limited liability company, or LLC (a common form of incorporation for businesses of a certain size), at the beginning of the project, but in looking back, Carl wishes they had known the project would develop into a business that they would keep going, so that they could have incorporated as a cooperative in the first place. Because they didn’t, they now have to complete a somewhat complicated transition from their original business structure to a something entirely new that puts the ownership in the hands of both the founders and employees. But thankfully, they’re not without support.
The Many Shades of Cooperative Businesses
To step back for a second, it’s worth noting that worker-owned cooperatives aren’t the only kind of cooperative out there. In fact, some of the best known household brands and the credit union in your neighborhood are, legally, cooperatives. The five primary types of cooperatives are:
- Consumer, in which the company is owned by the people who buy products from the company. Some local grocery stores, food shares (see below for more on that), and even REI, the nationally known outdoor outfitter, are examples of this.
- Producer, in which people who sell crafts or commodities join together to get more reach or scale. Ocean Spray is this kind of union, joining together cranberry farmers, and Sunkist oranges fall into this category.
- Purchasing, used most often by municipalities or school districts (but by private industry as well) to get more buying power than they would alone
- Hybrid, such as cooperatives owned by both consumers and producers who are distinguished on paper as different classes of members
- And, of course Worker, in which the company is owned by the workers in equal shares and with equal votes. Although around for a long time, this particular model proved very successful in the Basque region of Spain, where the economy remains dominated by a federation of worker-owned cooperatives called the Mondragon Corporation.
Other notable examples of cooperative framework include far more pedestrian and common examples, like credit unions and housing cooperatives, in which resources are pooled and managed centrally.
While in some ways a cooperative is blazingly simple (one person, one vote, one share), it can also at times be a little complicated, especially when dealing with things like financing. So when Carl and his partners wanted to start the transition to a worker-owned cooperative, they turned to the Valley Alliance of Worker Cooperatives (VAWC), a 14-year-old organization that is itself a worker-owned cooperative operating in Central Massachusetts. It aims to support businesses starting up as or transitioning to the cooperative model, and taking it a step farther by federating these cooperatives for the sake of mutual support and evangelizing the model.
“We’re trying to raise the profile of what worker cooperatives are doing, and we’re trying to have cooperatives use each other and connect to a broader movement.” Adam Trott, executive director of VAWC, said in an interview with Spofford. “A lot of worker cooperatives in the region are smallish, and I think that’s really valuable and really important, but it’s really important to connect and make an impact on bigger issues.”
Adam is very aware and honest about the stigma that cooperatives face in the United States, joking (kind of) that there are more cooperatives in Hungary than here: “They got out of the Soviet Union! If anyone’s not going to like worker coops, it’s them.”
“There’s a ton of stigma I think coops in the United States face. Food coops are just crunchy hippies that grow beards and eat granola, worker coops are just commies that are trying to opt out, farmer coops are hurting the environment, so there’s a lot of stigma.” He continued by noting, “Expansion in the economy has to be coops. That’s why we’re excited about Oxbow. The people at Oxbow have not only a zeal for having energy and thinking creatively but are also kind of out there trying to create value in different ways.”
A Troubled Present, Nonetheless
Consumers have become far more familiar with cooperatives in the last several years in large part thanks to the farm-to-table movement and efforts by independent growers to offset their costs and guarantee an income stream in an economy that’s harder and harder on small agricultural interests. Ironically, this popularity may have saturated the market in ways not originally intended.
Born out of the non-profit organization Gloucester Fisherman’s Wives but now independent, Cape Ann Fresh Catch is run by Donna Marshall, who has seen the seafood industry in her area, famous for its fishing culture and where her family owned a fish market, change over the years.
“I don’t know if we’re going to keep our edge.” Donna said to Spofford. “I don’t know if we will. If you don’t evolve, you die. And we’ve tried really hard to evolve and offered different things but….I don’t know. I think that farmer’s market used to be a nice little side income for us, it’s not worth it for us to go to any longer.”
Fresh Catch was an attempt to evolve, and offers a program that operates essentially as a consumer cooperative, in which shoppers get a weekly delivery of their share of the catch. Fresh Catch also has a permitted commercial kitchen that it makes available to several vendors at the farmer’s market. Whether the cooperative model will work in the long term, Donna remains skeptical.
Donna, as well as Carl and Adam, all strike the same chord in their own way: there’s a story to tell, and a vision for the world, and that their model is worth trying if it means getting that story out there. Whether it’s a story about resource use and collaboration in design and construction, the places and people that provide seafood, or the benefits of cooperatives and the economic democracy they espouse, all three will continue to find opportunities to amplify their message for the sake of those who work and build the communities they serve. And in the end, it may prove that cooperatives are simply better business.
