Union Co-Ops

From It's Our Economy ...

“Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollow out communities by shedding jobs and shuttering plants,” said United Steelworkers (USW) President Leo Gerard in 2009. “We need a new business model that invests in workers and invests in communities.”

As manufacturing in the United States continues in free fall, the USW is working to bring the Mondragon cooperative model to the Rust Belt. It aims to use employee-run businesses to create new, middle-class jobs to replace union work that has gone overseas.

A March 2012 report from the USW, Mondragon, and the Ohio Employee Ownership Center (OEOC), lays out a template for how “union co-ops” can function. “A union co-op is a unionized worker-owned cooperative in which worker-owners all own an equal share of the business and have an equal vote in overseeing the business,” the report states.

Drawing from Mondragon’s principles of shared prosperity for workers and democratic governance, It also has plans for a solar installers’ cooperative and a greenhouse that grows high-end salad greens and herbs for the Cleveland Clinic, as well as universities and restaurants.  

OEOC Director Bill McIntyre worked with the Cleveland Foundation on crafting the organizational framework for the Evergreen Cooperatives. At a March 2012 press event at United Steelworkers headquarters, he observed that employee-owners more often kept their jobs during the recent economic meltdown. “Employee-owned companies,” he said, “have more stable, loyal, and experienced work forces, which translates into real cost savings, productivity, and quality advantages.”
But union co-ops don’t address some difficult issues. For instance, they do not directly address the forces of global competition that have been undermining the U.S. manufacturing base. In particular, by adopting NAFTA-model “free trade” agreements, the United States has encouraged corporations to seek out competitive advantage in places with the lowest wages and fewest environmental regulations. At best, co-ops such as the Evergreen co-ops in Cleveland work around this problem by limiting themselves to making goods or providing services that cannot be offshored, like growing heirloom salad greens for local consumption.

“Now there’s a renewed interest in manufacturing as labor wages rise in developing countries,” he says. Moreover, he believes the recent economic crisis has also expanded public receptivity: “Even in the outer regions of the Midwest, where I spend a lot of time, people know that they’ve been victimized,” Peck says.

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