Worker-owned cooperatives and the future of Rust Belt labor

Amid declining union power and attacks on organized labor, some Rust Belt workers are turning to worker-owned cooperatives.

More

Image by Njaimeh Njie

Belt Magazine (BeltMag.com) is a digital publication by and for the Rust Belt and greater Midwest. Sign up for Belt’s weekly newsletter, including links to original features and a roundup of regional stories, at beltmag.com/newsletter.

When the Covid-19 pandemic hit, Cleveland’s Phoenix Coffee changed the way it worked. One store temporarily shut down, and four others transitioned to takeout only. Its employees, like many of their peers across the country, spent months on furlough. They knew they had to make a bold decision to survive the effects. So last October, the thirty-seven employees of the Northeast Ohio franchise decided to move forward with transitioning from a traditional business to a worker-owned cooperative. A deal had been in the works with Evergreen Cooperatives for a year and a half, and their hope was that finalizing it might keep them afloat.

They were right. “The only reason we were able to stay in business as a carryout business or otherwise is because baristas were willing to put their bodies on the line to make this work,” says Phoenix co-manager Christopher Feran. “And so we needed to recognize that contribution and actualize it in some way. Switching to a cooperative model we hope will let us do that.”

Phoenix is one of the most recent examples of a growing interest in cooperatives in the Rust Belt, and is the fifth officially recorded co-op in Cleveland. The Democracy at Work Institute, a strategic initiative launched by the U.S. Federation of Worker Cooperatives (UFWC), explains worker cooperatives as having two primary characteristics: “workers own the business and they participate in its financial success on the basis of their labor contribution to the cooperative,” and “workers have representation on and vote for the board of directors, adhering to the principle of one worker, one vote.”

Although this is a helpful working definition, co-ops may differ in structure and financing. For example, some co-ops work with umbrella financiers like Evergreen, or Seed Commons, which provides “non-extractive loans” to businesses across the country, promising “a borrower will never be worse off than before working with [them].” Other businesses may split company shares equally or in another way decided on by the worker-owners. Just as no two union contracts are alike, different co-op structures should provide the opportunity to meet the specific needs and wants of worker-owners at a particular company. In theory, says the UFWC, this model allows for a “values-driven business that puts worker and community benefit at the core of its purpose.”

It’s not surprising that, in an era characterized by the decline of, and increasing assaults on, labor unions, along with the economic impacts of the pandemic, that the cooperative movement is gaining popularity. The Rust Belt, in particular, is slowly seeing more and more interest in models that enable worker power without traditional union representation, which is especially true in gig economy and service and frontline industry sectors that are disproportionately made up of Black and Brown workers.

Examples abound both locally and internationally. One of the most well-known cooperatives is the Mondragon Corporation in Basque, Spain, which officially began in 1956, but whose roots can be traced back to the aftermath of the Spanish Civil War. Mondragon’s founder José María Arizmendiarrieta was a radical Catholic priest who formed a small company with his students, founded on the principles of humanism, solidarity, and a commitment to both individual and collective well-being, all in stark contrast to and rebellion against Franco’s authoritarian regime. The small company that created paraffin heaters eventually became a federation of ninety-six cooperatives and eighty-one thousand worker-owners. Many historians, economists, and worker-owners themselves credit the growth and longevity of Mondragon to its structure and values.

Another international example of successful cooperatives comes from Brazilian factories, which Feran says were also an early inspiration for Phoenix’s transition. Like Mondragon, the Brazilian worker-coop movement was also born of struggle (in this case, the onslaught of neoliberalism in Latin America).

The history of employee-owned cooperatives in the United States generally begins in the late 1700s, concurrent with a burgeoning labor movement. Echoing its international counterparts, crisis was often the breeding ground for worker-owner organization: cooperatives often formed during labor strikes, and especially in the aftermath of failed strikes. This was—and is—especially prevalent in the Rust Belt.

In 1806, a group of striking Philadelphia shoeworkers went on strike for better wages; in response, their boss had them arrested for conspiracy. Despite a judicial guilty charge, the same group of strikers went on to found their own cooperatively-owned boot and shoe factory. And Troy, New York was the home of the National Molders Union, founded in 1860, which succeeded for five years before facing too many defeats to sustain itself. In response, the first foundry cooperative was formed. Countless stories of union defeats-turned-cooperatives exist in the worker-owner archives.

More recently, in 2008, workers at the Republic Windows and Doors in Chicago enacted one of the most militant labor rebellions of the twenty-first century. Despite company success—and evidence that owner family members began separate window factories with temp employees—the owners announced the closure of the company, with no (contractually obligated) severance pay. In response, workers occupied the factory until they reached a settlement for severance, vacation pay, and benefits. After a few rocky attempts—and one more short factory sit-down strike, in 2012—the workers began their own worker-owned New Era Windows Cooperative, which is still operating today.

Evergreen Cooperatives, based in Cleveland, has made national and global news for its success in aiding low-income communities, so much so that writers for The Nation dubbed its work “the Cleveland model.” Sociologist and journalist Abby Scher described Reading, Pennsylvania as a city that is unprecedented in its “[embrace] of such a broad range of “solidarity economy” strategies,” of which she describes worker-owned cooperatives to be central. Pittsburgh, Detroit, and Chicago have also seen more businesses experimenting with worker-owned models, including laundromats, farms, and even unions.

Recently, Cleveland-based Belt Publishing formalized what was already an informal employee-owned press. (Belt Publishing and Belt Magazine were launched together but are now independent organizations—the former for-profit, the latter a nonprofit.) Like Feran, Belt Publishing founder Anne Trubek—who also founded this magazine and currently serves on its board of directors—says the cooperative model was a way to better compensate workers: “we’re a small business, and I wasn’t always able to pay people what they deserved, so I’d give them a part of the company as a form of hopefully payment and profit.” Because they are a small team, Trubek explains, “it evolved into the point where everyone who works on staff also owns part of the company.”

In addition to Phoenix and Belt, the Rust Belt is home to a worker-owned childcare center in Buffalo, a community- and worker-owned market in Dayton, an automation equipment manufacturer in Wisconsin, among others.

Erik Forman is an adjunct lecturer at the Harry Van Arsdale Jr. Center for Labor Studies, a co-op developer, and a long-time labor activist. As a member of the Industrial Workers of the World (IWW) union, Forman spent half a decade on Minneapolis union campaigns at Starbucks and Jimmy John’s. But he’s since shifted his focus to the world of co-ops; he helped start and now works with The Drivers Cooperative (a co-op ridesharing program), and People’s Choice Communications (a worker-owned Internet Service Provider launched by Spectrum strikers).

Forman says unions and co-ops don’t have to be mutually exclusive (unions can be a great “precondition” to co-ops, he noted), but he sees co-ops as having more potential for worker freedom. “It was hard to convince my coworkers that a union was worth fighting for. They would say a union was necessary, but not necessarily worth fighting for. It was high-risk and relatively little return,” he explained of his time organizing from around 2006 to 2012.

“So for most people, they focused on other dreams—which for a lot of people in the service industry was to own their own restaurant,” Forman continued. “And I went from thinking that was a distraction from the class struggle to thinking that was maybe another manifestation of the class struggle. And what if we in the labor movement went from trying to help people to fight their own bosses to try to help workers become their own bosses, or better yet create places that they own where there are no bosses?”

The Rust Belt has long been seen as a sort of geographic emblem of labor. We get our nickname from the ghostly remains of the industrial revolution, and monolithic narratives about “flyover states” and “Trump country” abound. Similar projections haunt discourse about “the labor movement,” which is still riddled with images of white male factory workers. The same industries that are commonly associated with unionization are the same industries that the Rust Belt is known for. But those industries are struggling, and unions are too. That doesn’t mean labor in the Rust Belt is gone, though—instead we are a region full of the same diverse workforce that mirrors the rest of the country. While some of those nostalgic factory jobs exist, they do so alongside the service industry, gig economy, and other precarious forms of work that comprise the current deregulated, market-obsessed economy of the United States.

All of this makes the Rust Belt an excellent place to wrestle with questions of our relationship to work. More and more organizers, activists, and workers in the region are thinking beyond unionization for solutions to the growing economic challenges. Usually, in a capitalist economy, Feran explained, “the profit [for owners] comes at the expense of workers.” But in a cooperative model, the goal is to dismantle the binary of worker and owner altogether. “I am a peer to the people that I employ,” Feran said, “and there’s a mutual accountability to that that is much more effective and beautiful…we’re all trying to grow the same thing.”

This is particularly important when addressing the experiences of workers of color. The Detroit Community Wealth Fund, for example, is trying to address the ways in which the instability of late-stage capitalism disproportionately impacts their majority non-white city. Its mission statement says: “Cooperative business conversions in Detroit will enable equitable transfer of wealth across the city, [and] create ownership opportunities for Black and Brown Detroiters.” And their Worker-Owned Detroit Program helps businesses with financing and support as they shift to worker-owned cooperatives.

The cooperative model isn’t impervious to corruption or power imbalances, nor is it a panacea to labor challenges in the Rust Belt (or elsewhere). And cooperatives, like unions, also fail to radically challenge the centrality of work to our lives. (In Work Won’t Love You Back: How Devotion to Our Jobs Keeps Us Exploited, Exhausted, and Alone, labor journalist Sarah Jaffe argues that “a society where we must work the majority of our waking hours will never deliver us happiness, even if we are the lucky few who have jobs in which we do gain some joy.” Similarly, the over-romanticization and articulation of jobs—often factory work—with “dignity” is a theme we’ve seen in, or projected onto, the Rust Belt. But what might it mean to offer dignity to human beings regardless of their employment status?)

Worker-owned cooperatives do not fundamentally disrupt capitalism, but they do provide models of possibility by centering worker solidarity. In his book Worker Cooperatives and Revolution: History and Possibility in the United States, author Chris Wright suggests that “the history of cooperation and communalism is a case-study in the profound truth that people are instinctively averse to the modes of cutthroat competition, crass greed, authoritarianism, hierarchy, and dehumanization that characterize modern capitalism.” Narratives that crises bring out the worst in people are challenged by the origin stories of cooperative organizing: instead of resorting to Darwinian competition, workers band together.

The Phoenix Coffee that I visit near my home in Cleveland Heights is about as far from traditional Rust Belt factory imagery as you can get. The walls are white, surrounded by Instagram-worthy vibrant green plants, and the teal color of their (compostable) coffee sleeves feels—I don’t know how else to describe it—hip. But here, an alternative vision of Rust Belt labor is unfolding. Despite all we’re up against, these businesses, like cooperatives across the world, are imagining a better alternative to profit-driven ways of being. The future of the Rust Belt can look different than the past.

This story was supported by a grant from The Sidney Hillman Foundation.

Raechel Anne Jolie is Belt Magazine’s engagement editor and the author of Rust Belt Femme (Belt Publishing, 2020). Cover image by Njaimeh Njie (creative commons sources here, here, here, and here).

Comments are closed.