The year might be winding down, but United Nations member states are already looking three years ahead: On Monday, the General Assembly declared 2012 the International Year of Cooperatives.
Fifty-five countries from predominantly Latin, African and southeast Asian countries supported the resolution in an effort to highlight the contribution of cooperatives to socio-economic development.
To most Americans, the image of a worker co-ops conjures up notions of a hippie venture. But collective business models have been embraced all over the world and have recently started gaining traction in U.S. cities like Cleveland, Ohio.
As autonomous voluntary associations, cooperatives are jointly owned and democratically controlled enterprises by a group of individuals with common economic and social goals. Cooperatives have 800 million members across 100 countries and account for about 100 million jobs worldwide, according to the UN.
Worker co-ops have not only been resilient through the economic crisis, they are also profitable. The top 300 cooperatives generate as much as the 10th largest economy in the world with revenues of $1.1 trillion, according to a 2008 report by the Geneva-based International Co-operative Alliance.
Even here in the U.S., 900 rural electric cooperatives serve 37 million people and own almost half of the electric distribution lines in the country. But more recently, unions and businesses have also begun to take a closer look at cooperative model in various sectors. Time is reporting this week on how communities in Cleveland are experimenting with the idea by taking inspiration from the successful Mondragon Corp., the world’s largest worker-owned co-op with roots in Spain’s basque region.
Several nonprofits, medical institutions and businesses in Cleveland have looked to the Mondragon model to create services and jobs in low-income areas — all while by democratizing ownership. One local cooperative, Evergreen Cooperative group, distributes profits evenly, every worker has one-vote, employment skill-sets are rotated, and wage gaps between the CEO and workers are controlled.
Unions are also taking interest in cooperatives. In October, United Steelworkers (USW) union announced an agreement to collaborate with Mondragon in the manufacturing sector. USW International President Leo Gerard in a press release called the agreement a “historic first step” to create a viable business model through union co-ops in manufacturing.
Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollowing out communities by shedding jobs and shuttering plants. We need a new business model that invests in workers and invests in communities.
This decade has been marred with corporate scandals occurring within the traditional hierarchical business models. From employee pension-losses at Enron, monstrous AIG executive bonuses, fraudulent accounting at WorldCom to Wall Street’s complete financial collapse, the lack of corporate governance has been scant and its effects on working people have been catastrophic.
The democratic decision making and joint accountability at the center of co-ops is refreshing. Still, worker co-ops aren’t just ideals anymore. For those in Cleveland and around the world, the decision to participate in worker co-ops are gaining headway out of necessity to create stable jobs and feed their families, something the UN is hopeful it will be able to do into the future.