Springfield is a mid-sized city in western Massachusetts that has been hard hit by many decades of factory closures. It has the dubious distinction of being the poorest city in the state, with unemployment almost double that of the rest of Massachusetts, and a child poverty ranking at the sixth highest in the entire country.
Traditional economic development strategies from prettying up downtown, streamlining traffic, building a riverfront Basketball Hall of Fame, and an urban mall have failed to revitalize the city. The current ‘big hope’ is to lure a casino to the city, despite evidence that casino economies are pretty dicey (pun intended). The poorest communities, which are largely African American and Latino, have continued to suffer from bad schools, high rates of crime and violence, and few job opportunities.
The Wellspring Cooperative Collaborative is working on a different strategy of community revitalization. We seek to build community wealth by developing worker-owned businesses (co-operatives) that will be located in, and hire from, low income communities in Springfield. These businesses will leverage the huge purchasing power of the anchor institutions – institutions that are locally rooted, like hospitals and colleges. Furthermore, the businesses will be interconnected by an overarching cooperative corporation that will enable them to provide mutual support such as training, financing, human resources coordination and exchange of best practices.
Why worker-owned businesses? We believe that workplace democracy is a good model. Workers own the business; they get to practice democracy every day and have a voice in key decisions. Research indicates that this experience has a positive spillover effect to overall civic participation (Majee 2009). As members of the community as well as in accordance with cooperative principles, worker owned businesses strengthen the social weave of the community. As owners, workers get a share of the profits and are able to build wealth that they can take with them when they leave or retire. As worker owners, they are unlikely to close up shop and move offshore in search of higher profits.
Cooperatives have been shown to be very resilient. A Canadian study showed that the five year survival rate for cooperatives in British Columbia was 67% compared to 38% for conventional start-ups (Murray 2011). The Mondragon Cooperative Corporation in the Basque region of Spain has had only two or three of their now 150 cooperative businesses fail over the course of 60 years – a remarkable track record. They weathered the economic crisis by redeploying workers within the Mondragon network and accepting reductions in wages and hours in order to protect jobs. Studies of financial cooperatives such as credit unions show that they have thrived in the face of the financial crisis because they didn’t engage in the kind of high risk shenanigans that the big banks did, and because people trust them (Ketilson 2009).
Wellspring builds on Cleveland’s Evergreen Cooperative model which launched a $5.7 million state of the art green laundry, a successful solar installation business, and is building a hydroponic greenhouse the size of a football field. Evergreen aspires to continue to launch dozens of other cooperatives all of which would use anchor institution demand as a stabilizing foundation for the success of their businesses. Evergreen in turn borrowed much from Mondragon, including the creation of an overarching cooperative corporation, which is a critical piece of providing greater collective resilience.
In Springfield, our Wellspring Collaborative includes all of the major anchor institutions in the city, along with community and labor groups. We have found that there is a great deal of openness to a different approach to economic development. There is strong interest in job creation and there has been virtually no push-back on the idea of worker owned businesses. We are making every effort to make all of the businesses that we’re developing as sustainable as possible. We are close to launching a furniture upholstery cooperative that will refurbish worn auditorium seating rather than see them thrown out. We’re also exploring a food service business that will source local, fresh food, and a hydroponic greenhouse that will draw waste heat from landfills.
We do have to be wary of well-intentioned pressure to support the status quo. For example we repeatedly are urged to support existing businesses by connecting them with anchor institution markets. While we have nothing against this, it is not the strategy that we’re pursuing. Supporting local businesses is not enough, even if it might result in additional jobs. It is important to be clear about the long term and larger vision. We are working to revitalize poor communities by building economic democracy, community wealth, jobs for local residents, and a business network to make these cooperatives resilient. We are working to contribute to an alternative strategy of economic development – one that puts people, democracy, equity and solidarity front and center.
Ketilson, Johnston Birchall and Lou Hammond. “Resilience of the Cooperative Business Model in Times of Crisis.” International Labour Organization, 2009.
Majee, Wilson and Ann Hoyt. “Building Community Trust Through Cooperatives: A Case Study of a Worker-Owned Homecare Cooperative.” Journal of Community Practice, 2009: 444-463.
Murray, Carol. “Co-op Survival Rates in British Columbia.” BALTA, June 2011.