create / 2021
ENVISIONING A SUSTAINABLE ECONOMY FOR ALL
Idea submitted in the My LA2050 Grants Challenge by WORCS: Worker Ownership Resources and Cooperative Services
WORCS: Worker Ownership Resources and Cooperative Services (http://www.workercooperatives.org) is working in coalition with Downtown Crenshaw Rising (http://downtowncrenshaw.com). WORCS is coordinating an effort to develop worker cooperative businesses within the mall and surrounding neighborhoods that will be locally and democratically owned and operated. The grant will go toward our first development project, a worker cooperative bakery, plus a business services hub for a future network of worker cooperatives.
In which areas of Los Angeles will you be directly working?
- Central LA
- South LA
What is the problem that you are seeking to address?
We will reduce income inequality and increase community wealth by creating locally, democratically owned and operated businesses that empower more Los Angeles residents in the low income neighborhoods. A worker cooperative structure recirculate wealth within the community and brings more stability to businesses. Members in a cooperative can routinely join or leave the business without dissolution. Worker cooperatives are resilient and flexible in uncertain economic environments. The democratic structure of a cooperative ensures that it serves its members’ needs, putting people before profits. The equation used is 1 worker:1 vote:1 share, which means worker-owners control the decision-making process and share the wealth. An economy based on worker cooperatives helps build a more equitable and stable community. We will be developing worker cooperatives in South Central LA where communities of color (POC communities) need a greater equity share in the Los Angeles economy.
Describe the project, program, or initiative that this grant will support to address the problem identified.
We are establishing a worker cooperative business developer by first working to develop a worker cooperative bakery as part of the Downtown Crenshaw development project. During this initial program, we have engaged the assistance and support of the Arizmendi Association of Cooperatives to recreate their business model in Los Angeles. WORCS will become a business services and development hub for a series of worker cooperative development projects starting with this initial project, a cooperative bakery in the Crenshaw district. In a worker cooperative, all the workers are owners and learn to manage the business democratically. This has proven to increase the income of the workers as well as engagement and equity share each worker has in the community and the economy. A study by The Democracy Collaborative found that worker cooperatives can increase worker incomes by 70 to 80 percent. Worker Cooperatives will stabilize our economy because they are more resilient and flexible. Studies have found that worker cooperatives have a 29% smaller chance of closure after controlling for variables such as industry. Communities around the world, such as Mondragon Spain, Emilia-Romagna Italy, and Preston England, by adopting the strategy of an economy built on worker cooperatives, have proven to recirculate wealth in those communities, benefiting all types of local businesses and residents, significantly decreasing unemployment, increasing the standard of living.
In what stage of innovation is this project, program, or initiative?Pilot or new project, program, or initiative
Approximately how many people will be impacted by this project, program, or initiative?
- Direct impact
- Indirect impact
Describe how Los Angeles County will be different if your work is successful.
Los Angeles will have a stronger more engaged business community that pays taxes into the local tax pool because we will increase the number of Los Angeles residents that are business owners and increase the equity that Los Angeles residents have in our local economy. Worker cooperative businesses strengthen our communities through broader democratic ownership and control of business and jobs. It builds on local talents, capacities and institutions, rebuilding capital to strengthen and create locally, democratically owned businesses that are anchored in place.These structures and models are part of a growing system that aims at improving the ability of communities and individuals to: increase asset ownership; create anchor jobs locally by broadening ownership over capital; help achieve key environmental goals (including decreasing carbon emissions); expand the provision of public services by strengthening the municipal tax base; and ensure local economic stability.
What evidence do you have that this project, program, or initiative is or will be successful, and how will you define and measure success?
One quantitative metric would be the incubation of at least one new cooperative business or conversion of existing businesses per year for the next decade. These new worker co-ops will support subsequent businesses and be supported by existing businesses to build a network of worker-owners. A consequent metric would be the increase in average wages, with cooperatives providing better and more consistent pay to workers. Additionally, the literature shows that cooperatives lower the unemployment rate where they are deployed and provide greater job security in times of economic downturn, so we anticipate more stable employment for our workers. Success is also measured qualitatively in the social equity of a circular economy that empowers members of the local community who have democratic control over their economy. This recirculating wealth will allow other businesses to benefit from a more vibrant economy and the city’s tax base will grow to provide services.
Describe the role of collaborating organizations on this project.
Our coalition partner, Downtown Crenshaw Rising, is currently sponsoring community member trainings in workplace democracy with an average attendance of 40+ residents with the goal of recruiting the first cohort of worker-owners for these worker cooperative business developments. Downtown Crenshaw as a part of the Liberty Land Trust will determine a location for the worker cooperatives businesses incubated by WORCS. Arizmendi Association of Cooperatives has a 30 year successful history of developing worker cooperative businesses in the Bay Area including 6 bakeries. Arizmendi is providing business development support services for this project. The Arizmendi network includes cooperative businesses and a business support hub that we plan to recreate this ecosystem in Los Angeles.
Which of the create metrics will you impact?
- Income inequality
- Minority- and women-owned businesses
- Unemployment rate
- Poverty rate
- Resilient communities
Indicate any additional LA2050 goals your project will impact.
- LA is the healthiest place to LIVE