Worker-Owned Cooperatives for Appalachia

Posted by on Mar 21, 2014 | Comments Off on Worker-Owned Cooperatives for Appalachia

What if the people who are employed by a business are the same people who own it? How would that change the decisions that get made regarding wages, benefits, community participation and the workplace culture? Worker-owned cooperatives are an answer to corporate business models that might not consider the worker impacts of the decisions made at the highest levels.

A recent op-ed in the Lexington Herald-Leader promotes this business model as an option for eastern Kentucky.

Erik Reece, the author of the op-ed, went to Cleveland to see how the cooperative model is impacting that city’s revitalization efforts:

Eventually, however, my research led to Cleveland, where I found an economic model that, I believe, would have saved the West Virginia miners and could go a long way toward reclaiming the foundering economy of Eastern Kentucky.

Five years ago, the CEOs of Cleveland Clinic, the Cleveland Foundation and some surrounding universities and hospitals decided they had to do something about the shuttered businesses and derelict neighborhoods that surrounded them. These “anchor institutions”— they weren’t going anywhere and they had resources — realized they spent $3.5 billion on goods and services from outside the city. Why not try to redirect some of that purchasing power to create an economy that would employ men and women from the surrounding neighborhoods?

If only 10 percent of that $3.5 billion was redirected locally, it would inject $350 million into an area facing 25 percent unemployment, they reasoned.

So the anchor institutions helped create the Evergreen Cooperative, a collective of businesses that provides goods and services in three basic sectors: food, waste and energy. Today the Evergreen Cooperative runs, among other things, an energy-efficient laundry company, a company that grows hydroponic salad greens and a company that installs solar panels and LED lighting throughout downtown Cleveland.

Casa Nueva restaurant in Athens, OH is a worker-owned cooperative that formed after the original owner skipped town leaving the business in substantial debt. Now the restaurant has been in business for almost 30 years and has expanded to include its own line of food products. They purchase local foods, participate in the community and pay their workers a living wage so they don’t have to rely on the uncertainty of tips. (Plus it’s a great place for a good meal and a drink!)

What if Appalachia’s anchor institutions did something similar? What if, as Reece says, we “put wealth in the right hands – the hands of those who earned it?” The CEO of the Evergreen Cooperative “can never make more than five times the salary of the company’s lowest earner.” That’s pretty impressive given the growing inequality in this country.

Worker-owned cooperatives might not be the right model for every business. But it’s one with room to grow in Appalachia.