The divide between rich and poor is exacerbated by low-wage, dead-end jobs. A “worker cooperative” (worker co-op) is a business model that creates new opportunities for those workers.
In a worker co-op, there are no “employees” but rather worker-owners, each of whom own an equal share of the business and play an equal role in the business’ decision-making. As you can imagine, these businesses tend to provide higher wages, better hours, and more job security for workers compared to other small businesses. In addition to supporting workers, worker co-ops support the creation of more small businesses. For an entrepreneur with a great idea but not enough money to start a business on her own, the worker co-op model offers the opportunity to get her business off the ground.
I am committed to finding ways for the City to support and expand worker cooperatives. Recently, the City Council passed my bill, Int. 423-A, which requires the Department of Small Business Services to report on how it engages with and supports worker co-ops (for example with legal services or access to financing). It’s a critical first step in identifying the barriers these businesses face and the services they need to succeed, which will benefit the working-class communities that many of these co-ops call home. The bill will also require the City to report on the number of city contracts awarded to worker cooperatives. Currently there are none.
Just over 20 worker co-ops operate in NYC, ranging from a bed and breakfast, a bakery, child care, cleaning services, dog walkers, catering companies, restaurants, and web design. In last year’s budget negotiations, my colleague Council Member Maria del Carmen Arroyo who represents a district in the Bronx, spearheaded efforts to convince our Council colleagues to allocate $1.2 million to strengthen the current worker cooperatives and develop 20 new ones across NYC. These efforts have created hundreds of new, good quality jobs.
Recently Walmart announced they would raise their employees’ minimum wage to $9 an hour. If Walmart were a worker co-op, it wouldn’t have taken years of protests by employees and allies to make this change. If Walmart were a worker co-op, the CEO wouldn’t be making $6,898 an hour while his employees make as low as $9 an hour.
When we talk about our nation’s rampant income inequality, we often look to economic engines that can close the divide. We talk about the finance sector or technology. I believe that the economic engine of New York City is its workers.
At a rally last week on the steps of City Hall, Elizabeth Mendoza, a worker-owner from the worker co-op Beyond Care, said it best: “Worker co-operatives changed my life.”
Helen Rosenthal represents the Upper West Side on the New York City Council