The Baristas Who Took Over Their Café
Baltimore’s 230-year-old tradition of workplace democracy is experiencing a revival.
Osita Nwanevu
In July 2023, early morning visitors to Baltimore’s Common Ground coffee shop found a sign taped to the door. With a thank you to the Hampden community that had sustained it for 25 years, owner Michael Krupp announced the shop would be ceasing operations “effective immediately.” Common Ground employees released a statement saying they had only been notified themselves the previous afternoon and, notably, had been a few months into forming a union. According to Common Ground barista Nic Koski, the effort was sparked by “general workplace concerns in terms of people wanting more fair, equitable wages, especially between in front of house and back of house, and better treatment — wanting to look into health care and benefits.”
Now out of work, Common Ground’s former staff turned to another idea — buying out the shop and turning it into a worker owned and managed cooperative. The plan moved fast. The Baltimore Roundtable for Economic Democracy (BRED), an organization created to facilitate just those kinds of transitions, offered a loan for the purchase along with assistance managing the technicalities of the changeover. And within two months, Common Ground reopened, with 19 former employees on staff as worker-owners — a welcome surprise for Hampden and workers across the city. “A lot of people already really loved the place, but now I think [they] especially [do] — we have people still coming in being like, ‘Whoa, this is so cool,’” Koski says.” People seem to be very excited about seeing what’s happened here.”
Common Ground is one of the latest additions to Baltimore’s already thriving co-op scene, which includes some of the city’s most beloved businesses, including Red Emma’s, a radical bookstore and cafe founded in 2004; the bike shop Baltimore Bicycle Works, the coffee roastery Thread; and a host of other food companies like restaurant and caterer Mera Kitchen Collective and sweet treat purveyors Cajou Creamery and Taharka Brothers. And while worker cooperatives are barely known to most Americans, co-op-heavy cities like Baltimore offer glimpses at how they can empower workers and at the institutions it takes to grow and sustain the model.
According to the historian John Curl, Baltimore was home to the first cooperative factory in America — founded by journeyman shoemakers in 1794 whose after bosses refused to negotiate on wages and working conditions. Much like Common Grounds’ baristas more than two centuries later, they opted to go into business by and for themselves. Later, in 1809, artisans in the city opened an early cooperative warehouse — buying their materials collectively and selling them together too, without middlemen — inspiring similar arrangements elsewhere on the East Coast.
More than two centuries later, the cooperative economy — in Baltimore and just about everywhere else — remains small. As of 2021, there were at least 612 worker co-ops in the whole country, employing just under 6,000 workers. But thanks in part to another set of pioneering workers in Baltimore, a resource and financing infrastructure has been built to help fledgling cooperatives around the country like Common Ground get off the ground.
In 2013, Red Emma’s ran into trouble securing a traditional loan to finance its expansion, thanks to its cooperative structure. “The bank said, ‘Cool, who owns the business?’” says Red Emma’s co-founder Kate Khatib. “And we said, ‘Well, there are 12 of us. Here’s everybody’s information and addresses and Social Security numbers. And the bank was like, ‘I don’t know what to do with this — why don’t you choose the three people who have the best credit and the most personal assets, put them on the loan application as the principal owners of the business, and then we’ll give you this loan?’”
“It was antithetical to the way that Red Emma’s was structured,” Khatib continues. “It was antithetical to the way that Red Emma’s thought about itself and the world. And it really replicated that same exclusionary logic of capitalism that says only the people who have access to resources, only the people who have the privilege of having learned about finance, built good credit scores, built up personal assets, are the people who get to build a business that sustains them — and everybody else is just excluded from ownership and from economic security.”
Though Red Emma’s eventually pooled money together from progressively minded lenders, the experience and similar challenges facing cooperatives elsewhere in the country encouraged Khatib and other organizers, from groups including The Working World, the Climate Justice Alliance, and the Southern Grassroots Economy Project, to launch Seed Commons in 2015. Seed Commons is a national, cooperatively governed network of organizations that fund and support worker and other cooperatives, sustained by impact investors and federal money from the Treasury Department’s Community Development Financial Institutions (CDFI) Fund. Among s 40 members is BRED, founded in 2015, which has helped finance 15 businesses in the city so far, including Common Ground, Red Emma’s and Taharka Brothers.
Like the other members of Seed Commons’ network, BRED addresses the lending problem Red Emma’s faced by offering cooperative-tailored non-extractive loans — given with no credit score reviews, no demands on personal assets, and no expected repayments until the cooperative is profitable. “We see what the financial sector has done to the country and to Baltimore,” BRED business relationship steward Taji Amani says. “You lend to a business or invest in a business with the explicit purpose of taking out more money than you’re putting in, or more value than you’re putting in.”
BRED hopes to create value and keep it in the community by providing not only loans but the kind of guidance Common Ground relied upon to handle licensing and permits and the other logistics of their cooperative transition. More broadly, BRED assesses the viability of co-ops to be and offers candid advice. “If a business comes to us and they’re in a very early stage,” he explains, “I’ll probably just spend several months working with them, meeting with them to talk about what it is to be a co-op, getting together financial projections and just planning. Because the last thing we want to do is just issue debt to a business that is not thoroughly planned out or didn’t fully intend to be like a profitable business.”
At Common Ground, thanks to BRED’s assistance, the cooperative transition has already brought improvements, according to Koski. The front and back of house now have wage equity, and the cooperative is working toward providing healthcare and other benefits.
Collective decision-making has brought workers closer, they say. “Then also on the outward side, I think we just run a lot better,” they add. “We are way more consistent because of how on top of things we are. … The owner or manager was not always here before. They might be making decisions and not even really seeing what the outcomes. … Whereas us — we’re always here. We know what works and what doesn’t work.”
What works and doesn’t work varies, of course, from cooperative to cooperative. And the flexibility and dynamism of democratic decision-making in the workplace can be both an advantage over traditionally structured businesses and a challenge. Not “having every single person in the business weigh in on every single decision” was “a hard-won lesson,” says Red Emma’s co-founder (and Khatib’s husband) John Duda, joking that recordings of their early meetings would have turned up “two-hour painful discussion about what kind of milk pitchers to use.”
“Everybody had to weigh in,” he laughs. “And I think one thing that showed me is that we’re not prepared for democracy at all — in our schooling, our normal work life, people are not given the tools to actually self-manage. If you ask people to invent a democratic work culture from scratch they, like we did, may have something that’s based around antagonism, that’s based around getting your way, that’s based around trying to fight with people until the thing you want happens. And for us, there was a lot of unlearning.”
Today at Red Emma’s, there are general meetings of all worker-owners — each with a profit-sharing ownership stake — where decisions about the business as a whole are made, while smaller subgroups govern specific tasks and functions. “So the bookstore [has] a little bit of operational autonomy from the cafe, and inside the cafe, the front-of-house and back-of-house teams [have] some committee structures that [allow] them to up their game,” Duda explains.
Common Ground uses the same model. But Taharka Brothers, which transitioned to a to a cooperative structure in 2020 and was the recipient of BRED’s first loan — $15,000 for an ice cream truck — in 2016, is currently working on a different set-up. There, a pool of original employee-owners will hire a CEO to handle core administrative duties, while other full-time employees will be able to qualify for company stock shares and a share of profits after some time on the job.
That hybrid model, Taharka Brothers cofounder Sean Smeeton believes, has allowed the company to thrive far more than it would have as a more traditional business. “Employee-owned businesses share the burden of ownership responsibilities over many shoulders,” he says. “If Taharka Brothers were to convert to the traditional capitalistic model, I think it would lose its sense of team and purpose and probably go out of business.”
One of the hurdles to transitioning businesses like Taharka Brothers or founding more cooperatives is the state’s business laws — because there’s no statute on incorporating worker cooperatives on the books, most cooperatives file for incorporation as standard LLCs, even though that complicates compliance with other laws governing cooperatives in the state and, as Red Emma’s discovered, can make securing financing and other logistical matters tricky. BRED has been pushing a solution in the Maryland legislature —the Maryland Limited Cooperative Association Act, modeled after similar legislation in Illinois and other states, which would allow worker cooperatives to formally incorporate as cooperatives. “Maryland relies primarily on the notion that there is one individual who is responsible; that is our business code,” state Sen. Mary Washington, the bill’s sponsor, says, meaning co-ops are often in situations like the one Red Emma’s faced, where they may be asked to pretend to a traditional structure they don’t actually have in place. “A wink and a nod — we’re going to put one person’s name down as the responsible person, but we all agree among ourselves that we’re shared but not truly recognized.”
While the bill stalled out in a House committee after passing the Senate this past session, Washington intends to introduce it again and put more time into beating back technical and ideological quibbles. “Believe it or not, in the House Economic Matters Committee, there were some Republican legislators who started talking about socialism,” Washington laughs.
“I thought it was a great opportunity as a progressive, as a Democrat, to engage in this business space that’s often relegated to conservatives,” she adds. “It also addresses [Democratic] Gov. [Wes] Moore’s interest in tackling racial wealth gaps and the notion of mutual aid and peer support — this really legitimizes a model that can allow communities of people to move together to be more secure.”
While the co-op economy is tiny, federal lawmakers are beginning to take notice of the sector — 2018’s Main Street Employee Ownership Act, the first piece of federal legislation to explicitly acknowledge worker cooperatives, included provisions to make it easier for them to access Small Business Administration loans.
And some see cooperatives as an inroad — the more that successful examples of full-on “economic democracy,” the phrase BRED’s proudly taken up, are available to workers and policymakers alike in the years ahead, the more room there is to experiment with even more novel and ambitious means of expanding worker power and combating economic inequality throughout the economy. “I don’t think you solve the systemic economic problems just with worker co-ops,” Duda says. “There needs to be a larger context in which worker co-ops are embedded — a larger fight. But I think there’s something really important and really precious about worker co-ops as a laboratory or a kind of learning.”
This is the first in a series on democratizing work.
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