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
Cooperatives at the grassroots level have played a significant role in providing solutions to many of the social problems in society, from supplying the growing population of the world with foodstuffs to supporting local business in the competitive and globalized market. However, the crucial challenge that most cooperatives must face today is how to cooperate with each other to address the major common challenges related to sustainability and global competition. Therefore, the next revolutionary vision in the cooperative movement should bring cooperatives together at a global level to solve global challenges. Cooperation among cooperatives is crucial to the continuity of the cooperative movement in the globalized era. Globalized consumers are pampered with more product and service choices from around the world. Hence, cooperatives can no longer expect members and communities to support them simply because they are a cooperative. Cooperatives can only survive if they can provide better quality products and services than their competitors.
Some discussion regarding cooperative solutions can be found in the following readings:
** Horohito Norhatan is a graduate student at the Center who is interested in cooperatives and is sharing with us a series of articles on his favorite research topic, cooperatives, Horohito received his M.L.S. in political leadership and public services from Fort Hays State University. His research focuses on cooperative movement, economic democracy, political economics, and development policy. In his graduate thesis, “Cooperative Impacts on Poverty Eradication in Indonesia,” he investigated the impact that Indonesian cooperative organizations had in reducing the poverty rate, generating community wealth, and increasing the regional gross domestic product. Under the guidance of Dr. Xabier Irujo, Horohito is conducting research related to Basque cooperative organizations and their impact on the development of the Basque economy.