by Robert McGarvey
Call it a secret pathway to a business startup. That’s exactly what the cooperative business structure is, where the workers own the business — and, hold on, isn’t that communism? Nope — that’s because a worker-owned cooperative is intended to be a profit-making business, but the profits are split among the worker-owners.
Right now might be a golden time for worker cooperatives.
We’re back. After a hiatus we have resumed recording The Cooperators Podcast…drum roll…presenting the current podcast with Adam Trott, executive director of the Valley Alliance of Worker Cooperatives which aims to stimulate formation of new worker co-ops in western Massachusetts and southern Vermont.
VAWC also helps existing worker co-ops perform more successfully.
VAWC members include Collective Copies, a copy and print shop, Green Mountain Spinnery, which makes yarns, Oxbow Design Build, which offers design and construction services, and Pedal People which is a human powered trash and recycling service in Northampton Mass.
Trott acknowledges that his geography is a fertile breeding ground for worker cooperatives: “They have been in this area since the 1970s.” So knowledge of them is high.
In this podcast Trott talks about the obstacles to starting a worker co-op, the benefits they bring to their community as well as to the worker owners, and why some worker co-ops succeed and others fail.
Consider this talk a primer on how to get this done – and know that in the current economic downturn interest is high in this alternative form of ownership.Listen in to hear the past, present and possible future of worker co-ops.
Fyi: The Cooperators Podcast has often focused on worker co-ops. Past episodes include Esteban Kelly, Melissa Hoover, Frank Shipper, and Alex Stone.
Trott’s other gig is with Shared Capital and, earlier, we did a podcast with Christina Jennings, executive director of Shared Capital which helps finance co-ops.
By Robert McGarvey
Now just may be the worst of times but it also is an opportunity for credit unions to reinvent themselves, by reimagining their roles and taking an active part in helping to limit what many experts see as a coming eviction crisis, as renters who have suffered enormous economic hardships in the Covid-19 pandemic are put out on the streets.
What if credit unions made available emergency loan funds to help renters avoid that outcome?
That’s the question Jake Schlachter, executive director of We Own It, an organization devoted to reinvigorating the cooperative movement, asks.
A starting point is that many credit unions have more set aside than the 7 to 8% excess capital required by the regulator. What if those institutions used some of that money to help renters avoid eviction. What if….
Credit unions just might be seen as community heroes.
Suddenly, many would know exactly the difference between banks and credit unions.
Schlacter has sent out a letter to the CEOs of 1430 credit unions with assets above $100 million and significant excess capital. Here’s a link to the letter.
Now what happens? Listen to the podcast. You will hear Schlachter’s hopes and dreams.
This is a challenge to just about every credit union. But the need is real and the possible payoffs are also real.
Want to hear more Schlachter? Here’s a podcast I did with him for a different series a year ago. This one focuses on cooperatives in general with minimal direct references to credit unions.
Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available. Email rjmcgarvey@gmail.com
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Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto
Credit unions and their cooperative path to success – CUInsight http://bit.ly/2RBM9PI
Podcast: Play in new window | Download (Duration: 49:25 — 67.9MB)
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by Robert McGarvey
There are maybe 400 worker owned co-ops in the US today. How many will there be 10 years from now?
Ask Michael Peck, a founder of 1worker1vote, and he says there will be four million.
That’s no typo. He added, “I really believe we are at a tipping point.”
Worker co-ops now are burning brightest in the constellation of cooperative initiatives. There is vastly more enthusiasm and energy around worker co-ops than any other kind. This year perhaps two or three new credit unions will be chartered. There will be hundreds of times more new worker co-ops.
Peck however is no newcomer to worker co-operatives. He has been promoting them for at least a quarter century and he has long had a tie to Mondragon, the immensely successful Basque co-op that in fact is a global business.
Peck accordingly sees immense potential for Mondragon-style co-ops to sprout in the US.
A key, in his mind, is a cooperative ecosystem. A stand alone co-op has tough going. When a new co-op is surrounded by like mined people and businesses it’s just much more likely to prosper, says Peck.
He works to create that ecosystem. For instance: he is very optimistic about the role labor unions can play in helping to develop new worker co-ops and that could be a win-win for unions which of course have suffered dramatic drops in membership and clout in the past quarter-century. But just maybe a focus on starting worker co-ops may produce a brighter outlook for unions.
By Peck’s count maybe 10% of US workers have an ownership stake in where they work.
But when workers are also owners they work harder and smarter.
“Workplace democracy is possible for everybody,” says Peck.
Listen in to hear the past, present and possible future of worker co-ops.
Fyi: The Cooperators Podcast has often focused on worker co-ops. Past episode include Esteban Kelly, Melissa Hoover, Frank Shipper, and Alex Stone.
Peck in the podcast mentioned the Cincinnati Union Co-op Initiative. Click the link to learn more.
Also mentioned is a Barron’s piece on the good immigrants do for the US. Read it here.
Listen to the Peck podcast here.
Podcast: Play in new window | Download (Duration: 28:58 — 39.8MB)
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This podcast initially appeared the CU 2.0 Podcast series. It appears here as a for instance of a community coming together and creating a cooperative to meet local needs.
Quick now, what country has the highest participation in credit unions? Say the US and you are wong. According to Mike Edwards, senior vice president for advocacy at the World Council of Credit Unions, it’s Ireland, north and south, where 70% belong.
In this podcast he tells why that participation is so high.
He also tells why many regulatory matters in the US in fact originate overseas – risk based capital, Bank Secrecy Act requirements, AML, and more got their start overseas and that is why Edwards spends much of his time monitoring and attempting to influence regulations overseas.
What happens in Basel does not stay in Basel. It may and probably will wind up in the US.
Listen in to this informative podcast.
Podcast: Play in new window | Download (Duration: 28:37 — 39.3MB)
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Update: Maine Harvest now officially a new credit union. Hard work makes miracles happen.
This podcast initially appeared the CU 2.0 Podcast series. It appears here as a for instance of a community coming together and creating a cooperative to meet local needs.
***
It has taken some years but finally Maine Harvest may be in the final lap before gaining an official credit union charter. That’s because it’s met its fundraising goal, $2.4 million, with last monies ponied up by the Maine Credit Union League and what’s remarkable is that just about the whole credit union movement in the state has supported formation of this novel credit union.
So, too, do the states two U.S. Senators and two House members.
Maybe 30 credit unions have been chartered by NCUA in the past decade. So this is a big deal.
We first covered the Maine Harvest story in 2015.
We picked it up again in 2017.
And in 2019 we may be covering the official opening.
What’s special about Maine Harvest is that it intends to follow a specific, narrow business plan where it makes loans to small farmers – for land purchase, equipment purchase, and similar.
No checking. In fact no cash in the till.
No other institutions crave that loan business. But small farming is seen as very important to Maine’s future.
Also essential to the business plan is that essentially all the back office will be provided by Synergent, a subsidiary of the Maine League.
That lets the start up focus on finding borrowers and making sound loans.
Why do many credit unions fail? They don’t serve a clear need.
This one knows its need and has a plan for filling it.
Other states would do well to look into similar efforts.
Podcast: Play in new window | Download (Duration: 33:56 — 46.6MB)
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by Robert McGarvey
Co-op housing: a better way for seniors?
Where to house the ever expanding numbers of American seniors? Ask Dennis Johnson, president of the Senior Cooperative Foundation in Minnesota, where seniors control their housing destiny.
There are many such co-ops in Minnesota and Iowa and a handful more states, typically in the upper midwest. Why isn’t this housing popular elsewhere? Johnson tells why in this podcast.
The guiding principles behind senior co-ops spell out what make them different, special. Such as: these co-ops “put the well-being of the members above other considerations.”
As you listen to this podcast, dream about how your community would if it had senior housing co-ops. Then take it to the next step, action.
Part 1 of our housing co-op series is here, student housing.
Podcast: Play in new window | Download (Duration: 34:50 — 47.8MB)
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Put Brel Hutton-Okpalaeke in your contacts if you are a college student searching for affordable housing. That’s because he is the director of development services at NASCO, North American Students of Cooperation, where the primary focus is on cooperative housing, especially for students.
Now is the perfect time for NASCO – colleges have been raising student housing and board fees at a brisk pace and, unbeknownst to most, schools run those functions as profit centers. They are not usually loss leaders. What’s more, schools know that while all eyes are on tuition increases – jumps in prices for room and board frequently are under the radar.
Enter co-op housing where, frequently, students put in work requirements and an upshot is that savings over university housing and board charges can be substantial.
The downside? It takes a number of years to form a new student housing co-op. Schools increasingly are hostile to such co-ops (they want the revenues!). And many cities and towns are downright hostile towards housing options for significant numbers of unrelated adults.
Add in difficulties in securing financing to pay acquire new housing.
That’s why NASCO is crucial. It helps students navigate these difficult, churning waters.
And know there are real plusses to co-op housing for students. The format teaches how to function in a democracy and, for many, co-op housing is an introduction to cooperatives in general. A few years in a co-op house can lead to credit union membership, membership in food co-op, and maybe even membership in a worker owned cooperative business.
Podcast: Play in new window | Download (Duration: 39:49 — 54.7MB)
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Go ahead, tell me you don’t think of Arizona when the conversation is about cooperatives.
You would be right.
The Grand Canyon State is not Wisconsin or Minnesota or Vermont.
But your podcaster – me – lives in Arizona and so I asked Nigel Forrest, a research associate at Arizona State University’s School of Sustainability, to update me and you about the state of cooperatives in Arizona.
Keep in mind that Arizona, in its comparative indifference to cooperatives, is akin to perhaps two thirds of the nation’s states.
And the good news is that Forest believes there is real upside potential for growth in cooperatives in Arizona.
He sees that as good, because cooperatives also bring more sustainability, more economic democracy.
Right now he pegs the number of cooperatives in Arizona at 50 to 60, mainly credit unions and the second biggest group is rural electric co-ops.
But he says there is vast potential for many new worker co-ops, especially as aging small business owners retire. They could close their business – or just maybe sell it to their employees. It’s obvious which is better, for the employees, also the community.
Forrest also hopes for a new food co-op in Phoenix, the nation’s fifth biggest city and it has none right now. But he sees real possibilities.
He also has ideas about how to grow awareness of cooperatives.
And the ideas just may work in other states.
He also reports on new platform co-ops that are surfacing in Europe and that just may find use in the US, Arizona included.
This podcast includes a reference to the Community Purchasing Alliance – podcast here.
The food co-op expert whose name I blanked on is the Food Cooperative Initiative – podcast here.