Of the community, by the community, for the community

By Ivy Lee, Worker-owner at Olio Culinary Collective

In the ongoing wake of the financial crisis and growing income inequality, there is a better way to do things. Businesses can be accountable to their workers and their customers. They can generate wealth more equitably and serve their communities with long term vision. Housing, even in apartment buildings, can be managed and run affordably by its residents.

Cooperatives are businesses owned and run by their workers or customers. Cooperative housing is housing democratically-owned by it’s residents.

Mayor Walsh has rightly emphasized issues of housing stability and income inequality as focal points of his work in the city and cooperatives can be an important strategic tool to achieve those goals.

What exactly is a cooperative? It’s a business or organization owned by and operated for the benefit of those who work for it and/or use its services. Profits and earnings generated by the cooperative are distributed among the member workers or customers.

With co-ops, function follows structure. By placing organizational control in the hands of members of the local communities where they operate, the design of cooperative organizations means they act in the interests of the local community. Instead of seeking short-term profits, for instance, local member ownership enables co-ops to balance sustainability and support for the communities they serve.

When we grow our city through democratically-owned housing and businesses, the solutions to housing instability are income inequality can be built into the very structure of our economy.

With rents rising at five times the rate of income, Boston desperately needs new tools to combat displacement and create affordable housing. In a housing cooperative, residents only raise their rent to meet increases costs, never for the benefit of outside investors or absentee landlords.

Co-ops produce economic stability and reduce wealth inequality. While Boston suffers from nation-leading levels of income inequality. Co-ops’ democratic structures result in smaller pay differentials between the highest and lowest paid workers. Being worker-owned, means co-op businesses are less likely to lay off employees or move out of state to chase low wages. The Basque region of Spain, home to a network of hundreds of cooperatives, has had an unemployment rate 10% lower than the national average; similarly, a 2012 study found that cooperatives suffered fewer business closures and fewer job losses than non-cooperatives during the economic crisis that began in 2008.

A cooperative economy is also a local economy.The money spent in co-ops leaves a greater economic footprint in the local economy. For every $1,000 a shopper spends at their local food co-op, $1,604 in economic activity is generated in their local economy – versus about $1,360 for conventional grocers.

In Boston, more than 500 co-ops exist that not only provide economic and housing stability to its members and worker-owners, but also serve as a kind of leading vision for what Boston’s social economy could (and perhaps should) look like. Take commercial composting company CERO for example, creating green jobs that pay a living wage. Dorchester Food Co-op is creating grocery store that will be owned by it’s employees and customers, working together to provide good jobs and healthy food. Yard and a Half is an organic landscaping company that was purchased by its workers when the owner retired 3 years ago. In doing so, they preserved 20 jobs, raised wages, and have hired ten more people, all while running their businesses through elections of the employees and by the employees.

Now more than ever, the City of Boston can create a more just, democratic, and sustainable economy for it’s residents and workers.

The Boston City Council is hosting a public hearing tomorrow, Jan 24th, at 4pm, to discuss the role of cooperative housing and businesses in Boston. The hearing is being sponsored by Josh Zakim and Frank Baker, the chairs of the housing and workforce development committees, in coordination with the Greater Boston Chamber of Cooperatives.