Tackling inequality in the USA through worker co-ops

While there are many forms of inequality, gender inequality remains a concerning issue in modern day society. In the USA, female workers are still paid only 77¢ for...

While there are many forms of inequality, gender inequality remains a concerning issue in modern day society. In the USA, female workers are still paid only 77¢ for every dollar their male colleagues make. For immigrant workers finding decent employment is even a greater challenge.

In January 2014 the Federation of Protestant Welfare Agencies (FPWA) published the report -“Worker Cooperatives for New York City: A vision for Addressing Income Inequality” in which it highlighted the important role played by co-operative enterprises in empowering women. FPWA urged City officials to provide customised support services for worker cooperatives and to make worker co-operatives a preferred contractor for city agencies.

The report described worker co-operatives as a tool that can assist marginalised populations such as women and immigrants, in not only gaining employment, but also securing decent wages.

Co-ops can promote gender equality within enterprise and also within the wider society. Moreover, by providing quality jobs for women, worker co-operatives are also contributing to the local economy.

According to the report by FPWA, in worker co-ops the pay ratio between the highest and the lowest paid is generally 3:1 to 5:1 before taxes, and the minimum pay is generally higher than the local equivalent for similar work. In the United States, the average chief executive to lowest-paid worker wage difference is 600:1.27.

“The development of worker co-operatives in New York City should be included as part of a long-term strategy to address income inequality,” reads the report.

Economic inequality is an absolute truth is worker co-operatives, thinks Chris Michael of New York City Network of Worker Cooperatives. “Before we even talk about real world examples, all worker co-ops address inequality, you can almost say that all worker co-op by their very nature tackle inequality”, he said.

Mr Michael explained how New York City currently had 40 worker co-operatives, including the nation’s largest worker co-operative, Cooperative Home Care Associates (CHCA).

Created in 1985, CHCA is a worker owned co-operative based in South Bronx. It currently employs more than 2,000 staff, nearly all Latina and African-American women and a large share are women who previously received public assistance.

At CHCA, 82% of every dollar received as revenue goes back to its home health aids, as wages or benefits, as opposed to 60% in the case of other home care agencies. Moreover, 95% to 97% of worker-members are employed full time, have 401K retirement plans, and access to affordable health insurance.

Wages for CHCA’s health care workers stand at USD $16 an hour including benefits, twice the market’s rate. They work around 36 hours per week, as opposed to 25-30 hours in the rest of the industry.

Recognising the important contribution of co-ops to job creation, the New York City Council allocated $1.2m to an initiative designed to fund the development of worker co-operatives.

“This budget invests in our city’s future and begins to address inequality, all while strengthening our long-term fiscal health,” said New York City Mayor Bill de Blasio following the announcement of the budget.

Administered by FPWA, the $1.2m will go to 10 organisations including Green Worker Cooperatives and the Center for Family Life. These non-profits must create 234 jobs in worker co-operative businesses and reach 920 co-operative entrepreneurs. They will help support 28 new worker co-operatives and assist another 20 existing co-operatives.

The Center for Family Life, a neighbourhood based family and social services organisation helps vulnerable New Yorkers build a better future for themselves and their families by setting up worker co-operatives.

One of these co-operatives is “We can do it” (Si se puede), a women-owned and run business designed to create living wage jobs and educational opportunities for its members.

Employers of domestic workers are excluded from the Fair Labor Standards Act, which means that they are not required to pay a minimum wage or overtime. In September last year the Department of Labor announced the FLSA would finally extend minimum wage and overtime protections to domestic workers, but the changes will not take effect until January 2015.

The co-op was set up in 2006 by 19 worker-owners, but it now has 51 members, all women immigrants. Four years later its worker owners had tripled their wages to as much as $25-an-hour.

“Setting up co-ops and working together it’s more accessible than starting their very own business cause they are able to pull resources and skills,” said Katie Harrison, co-operative developer at the Center for Family Life.

Building on the success of “We can do it”, the Center for Family Life helped another 16 immigrant women to launch Beyond Care Childcare Cooperative, an enterprise designed to provide excellent childcare services.

They chose a co-operative because they believed that when workers receive 100% of the fee charged they would give 110% of themselves at the job at hand. Members are driven not only by their love of children and need to earn a living, but also by a commitment to fairness in wages and treatment.

The women not only earn more, but they are also able to set their own schedule, which enables them to spend more time with their own families.

Since its creation in 2008, the co-op has attracted more members, now including 30 women aged 25 to 50, all mothers themselves. In addition to raising their own children most have worked as babysitters, after-school programme employees or nannies.

Those who were not English-proficient were enrolled in ESL classes. Beyond Care members have completed training courses.

Being part of a co-operative empowers women, who are more informed about their rights, more motivated and are also able to assert themselves, explained Ms Harrison.

Another example is the Arizmendi Bakery at 9th avenue in San Francisco. Sue Lopez is one of the women employed at the bakery. Set up in 2000 as a worker co-operative, the enterprise employs 21 bakers, 13 women and eight men, all earning the same amount.

“All workers are required to learn all shifts, then they eventually settle into the shifts that work for them, considering other jobs, school, children, etc.  Most of the 9th Avenue workers work approximately 25-35 hours a week, very few fulltime. It’s hard work, but the bakery is doing well and we are also well compensated and get full benefits (for all the children too) and up to 6 weeks vacation annually (though not all paid)”, explained Sue Lopez. This is just one of the Arizmendi bakeries in the area.

“All the bakeries are pretty much the same, with some little differences – we all pay some of our profits into a common pot to help get the next business started, or help out if a business is in need.  All bakeries are business wise/ legally run independently. The association helps with supporting a all-bakery day long retreat that happens every so often, we just organised one in august that attracted about 100 bakers out of the possible 150 in total – a really good turn out for us.  The association also assists the bakeries w/financial bookkeeper/accounting tasks, group facilitation, mediation or legal issues,” added Sue Lopez.

“This unique business model has so impressed me from day one – I never thought I’d still be here – but I’m feeling like a lifer now”, she said.

•  16 October is Blog Action Day, which explores the theme of inequality.

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