Cooperative models as a post-crisis development have gained popularity, as seen in the aftermath of Hurricane Sandy in 2008 as well as during the 2008 financial crash. The resilience of the cooperative business model in such times of crisis has attracted the New York City government to invest as much as $1.2 million in developing worker cooperatives in the city. Indeed, it is the largest investment ever made by a city government in the cooperative movement. Yet doubt still exists regarding the real impacts of cooperatives within the context of the larger national economy.
Cooperatives have been one of the most successful solutions to tackle popularly publicized inequality issue in many urban areas. The pay ratio between the highest and lowest workers in cooperatives is between 3 to 1; in contrast, in traditional corporations the ratio can go as much as 600 to 1. Without the middlemen or placement fee, cooperatives can also provide decent incomes for their members. In many mega metropolitan regions like New York, where many of the low income citizens are freelance, self-employed, or temporary, a workers cooperative is a feasible solution. La Mies Bakery in New York, for example, where workers own and manage the company, has created decent stable jobs for 18 workers. In the United States there are 233 worker cooperatives, yet this is a low number in comparison to non-cooperative businesses in the country. As the United States continuously deindustrializes its economy, cooperatives should expand their impact on the larger national economy, thereby creating more jobs for those impacted by industrialization.
In order to expand their impact, cooperatives should go beyond their traditional boundaries in the area of anti-poverty and income inequality programs. Instead, cooperatives should evolve and embrace modernization and transform into an alternative management practice model in the production of goods and services. That way, the democratic ethos and spirit in their organization can catch on and change the broader national economy.
For further reading please visit