Example: Sarah Grillo/Axios
Cooperatives have seen an increase in demand during the pandemic.
Why is it important? Advocates see the worker-owned alternative business model as a way out of income inequality, one that returns power to workers and builds community wealth.
- Those values are becoming a higher priority after Covid-19 pushes conversations about racial inequity and workplace conditions, Margo Dallal, executive director of cooperative business lender Detroit Community Wealth Fund (DCWF), told Axios.
In numbers: The number of worker cooperatives in the US will increase 30 percent from 2019 to 2021, according to the State of the Industry report. The report identified 612 businesses, but estimated the actual number to be closer to 1,000.
The big picture: Cooperatives have a long history. There are famous examples like Ocean Spray, but democratically owned businesses are still few in number. Notable local businesses include the consumer-owned People’s Food Co-op of Detroit and the employee-owned Pingree Detroit.
- The structures are different. Generally, employees or members have decision-making power over the business and individual earnings are tied to performance.
What they say: “There’s a demand for an alternative to the dysfunctional that has grown exponentially during the pandemic,” Karen Tyler-Ruiz, executive director of the local Center for Community-Based Enterprise (C2BE), told Axios.
Yes, but: The model is unfamiliar to many, and it can be difficult to get startup funding from investors who don’t have as much control as a traditional company.
Present: Due to the lack of government data on the subject, it is difficult to paint a picture of the local cooperative landscape.
- The Detroit Cooperative Economic Network Directory lists 28 operations in the area that are cooperative or have similar characteristics.
The plot: Some of the new interest in co-op ownership comes not from startups, but from existing traditional business owners looking to retire and sell to their employees, Melissa Hoover, associate executive director of the National Democracy at Work Institute, told Axios.
- C2BE and DCWF have both focused on helping traditional businesses make the transition in recent years.
Moreover: Juan Carlos Dueque-Perez, owner of local marketing agency Featherstone, said he is talking to employees about employee ownership as part of a long-term succession strategy.
- It feels like the “right next step” because it gives employees skin in the game and reflects Featherstone’s “family-style” values, he told Axios.
