Unions and Worker Co-ops: Why Economic Justice Requires Collaboration

Photo by Charles Deluvio on Unsplash

Unions and worker cooperatives have a lot in common when it comes to passions and principles for democratic workplaces. Where they differ is in strategy and tactics. At this moment in history, it is clear to many that much needs to be torn down and much needs to be built up. To face this challenge and change our economic system to achieve genuine workplace democracy requires new ways of doing business and a multi-pronged approach.

To explore these issues in greater depth, the Community and Worker Ownership Project at the City University of New York (CUNY) published a report titled A Union Toolkit for Cooperative Solutions, which highlights seven case studies of how unions and worker co-ops have together built worker power.

More such collaborations are sorely needed. The current rules and values of our capitalist, imperialist, white supremacist, and patriarchal system set the table for how work gets done, and how money and resources move. Worker co-ops and unions each can contribute to changing this reality. Worker co-ops provide a means to collaborate within a framework of deep collaboration fostering inclusion and agency at work. Unions help take on corporations and their rules and regulations, with a rich history of struggles, both wins and losses. Today’s labor and ownership laws reflect a capitalist paradigm. Challenging that paradigm requires knowing what levers exist with the current system to better conditions, even as new systems are developed that lay the groundwork for more egalitarian ways to be together at work and in communities.

This work is not easy. Audre Lorde cautioned that, “The master’s tools will never dismantle the master’s house.” In short, to have a chance at transformative change, not just inside, but also outside strategies must be employed. Together, unions and worker co-ops offer the possibility for making considerable progress in this direction.

 

Multiple Pathways to Create Worker Cooperatives

Worker cooperatives are businesses that are owned by their workers and have a member-driven democratic governance structure that values transparency and justice. Like any business, they fulfill an economic need. And they develop in many ways. Here are four:

Stand-Alone Start-Ups: When people come together to form their own, new co-op business, they usually have a strong entrepreneurial person on the team. Any start-up comes with risks, traditional or cooperative. No guarantee of steady income, as any new business has a lot to take on and a lot to learn. This is likely the oldest form of an economic system of exchange based on need and skills to be shared. It is the closest now to what mutual aid looks like as people, under duress, work with what they have and what they face for what they want and need.

Conversions: Conversions are when businesses transition from one type of ownership to a cooperative model of ownership. More and more, planners, community development advocates, activists, and policymakers are looking at local needs for more sustainable supply chains; examining what enterprises are needed, and what assets exist in their communities; and then assisting local business owners, particularly when nearing retirement, to preserve locally based businesses by selling them to their firms’ employees.

Incubation: This is a model where a nonprofit gets a cooperative going and is linked to other economic and workforce development strategies that can support start-ups through this lens. The formation of Gem City Market, which opened in West Dayton last year, is an example of an incubator approach. An important feature of the Dayton effort is that the co-ops being incubated there explicitly follow a union co-op model—that is, workers are both owners of the worker co-ops being incubated, as well as members of the union backing the incubator.

Worker Takeover: These are rare in the US but can occur when workers organize to save a firm by occupation and takeover. Technically, this is a type of business conversion but taking over a failing business is radically different than a standard business conversion where a willing owner sells his or her business to the firm’s employees. Although the takeover model is more known outside the US (especially in Argentina), in Chicago, New Era Windows formed this way and workers were backed by a union (the United Electrical Workers) to achieve this change.

 

Union Power as a Lever for Change

Cooperative businesses and union representation can go hand-in-hand. Both worker co-ops and unions foster a sense of collective belonging, which is critical in this world of alienation and isolation. Both offer means for dignity and agency at work. Unions of course help workers combine their forces to face the power of capital. But unions can also act as a market player and shaper to help construct rules for an industry; they lobby for policies that raise the floor and level the playing field.

Unions can also—and sometimes do—utilize their principles and resources to support cooperative economic development. For example, Cooperative Home Care Associates (CHCA) in the Bronx, the largest worker-cooperative with 2,000 employees, did not have the power or influence to raise the floor for standards across their industry on its own. But after joining SEIU 1199—the 450,000-member healthcare division of the Service Employees International Union—they got the New York state legislature’s attention and made legislative gains that raised homecare worker pay standards.

Unions, in short, do far more than represent workers at workplaces. Collectively, they form a larger movement with the power to broker political terms and regulations that can impact many companies across a market. Take a moment and thank the union movement for bringing us the weekend. (As much as COVID capitalism is trying to take it away.) Unions invest sizable resources when they decide to organize an industry. In New York state right now, a strong union collaborative is acting to shape the cannabis industry with justice in mind as it evolves.

Unions sometimes can also help directly create co-ops. The groundwork for a conversion can be held in a union’s collective bargaining agreement (CBA) with their companies, if and when unions negotiate for their membership’s right of first refusal to buy the business if a firm is put up for sale. Unions can also dedicate researchers and lawyers to tackle the ownership constraints and possibilities. And the union can institute training and education so members can become effective operators of the firms. With the legal help, education and training, and prepared operations manuals that comport with a collective bargaining agreement, unions can help workers to be ready for ownership—even for hostile takeovers if it comes to that.

 

Union-Worker Co-op Collaboration in Action: White Electric Coffee and CUPS

Union worker co-op collaboration is growing. Our report covered some of the cases discussed above—such as New Era Windows, CHCA, and the co-op efforts in Dayton—but some cases were too recent to include in the report. One of these involves a cafe in Providence, Rhode Island, known as White Electric Coffee. During the first months of the COVID pandemic shutdowns and the shattering news of George Floyd’s murder, the workers held a series of self-organizing meetings in the local park to discuss going back to work and to examine the terms and working conditions they wanted. They carried in their collective consciousness awareness of how their workplace could be better. A list of demands was created that included worker safety, diversity, accessibility, union representation, and the added desire to own and democratically operate the business as worker-owners. To do so, they formed an independent union, CUPS (Collaborative Union of Providence Service-Workers).

With official recognition by the National Labor Relations Board (NLRB), they became the first unionized café in Rhode Island! With technical assistance from the Cooperative Fund of New England, a community development financially institution (CDFI) that specializes in co-op lending, the workers bought the firm and established democratic worker ownership. Worker-owners and the union co-op proudly adhere to worker justice principles of living wages, workplace democracy, cooperation, collective bargaining, profit sharing, business transparency, BIPOC/LGBTQ+/women co-ownership and co-leadership, and community engagement.

 

Why the White Electric Case Matters 

The White Electric case is inspiring, but is it significant? Before dismissing it, it may be worth noting that Starbucks alone employs over 200,000 workers nationwide. The potential for further expansion in the café industry is not small. It is also worth examining what happens when workers fail to secure ownership.

Take the example of Workers United. In 2017, in upstate New York, baristas at Gimme! Coffee signed with the Workers United! union, which is affiliated with the Service Employees International Union (SEIU). The workers were delighted with the improvements they achieved in their first contract in February 2018, which was not only their first contract, but the first union contract with coffee shops in the nation. In 2019, the same union successfully signed a contract with workers at SPoT Coffee, a coffee chain with locations on the East Coast and Canada, effectively establishing the largest union of a café or restaurant chain in the United States. And very recently, the same union went on to unionize two Starbucks franchises in Buffalo, New York, sparking a wave of unionization efforts at Starbucks stores across the country.

When COVID-19 came, Gimme! Coffee experienced temporary shutdowns and unforeseen shifts, much like White Electric. But at this shop two other things happened during the early months of the virus shutdowns. The owners reached out to a nonprofit co-op developer to assist them with selling the business to the firm’s workers. And a worker filed with the NLRB to decertify the union, a right that occurs when a collective bargaining agreement is about to expire.

Superficially, this would seem to be similar to White Electric. Not so! Rather, the move to decertify the union ended up being a clever means for the employer to frame worker ownership as an alternative to the union. The co-op developer, which was working with the owner to sell the company, failed to approach the union to gain its support. They instead worked with the single worker who had filed for decertification—thereby engaging in discussions with the owner’s choice of which worker to talk with, rather than the union that workers had democratically chosen as the group to represent them.

If asked, the union might have backed the sale to the workers, but the owner was hostile to the union. The pandemic clouded events and the co-op developers were loyal to the deal to be made for the owner, not the already organized and represented workers. What a miss. What a loss.

Imagine for a minute that union representatives had helped shape a deal to buy Gimme! Coffee for the workers to own the firm, becoming a union co-op. Then the Starbucks workers in Buffalo would also have had a unionized cooperative behind them within their own union in their own state. Developing fair trade along the entire supply chain requires worker representation and control. This has been missed by some in the field who see unions as only being necessary to remedy badly managed businesses and restrain hostile employers. This couldn’t be more inaccurate. It is when unions partner with good businesses that the union movement grows worker power—by adapting and replicating what works. Ownership and control work. Democracy works. Solidarity works.

 

Why Shared Strategies to Achieve Worker Ownership and Control Are Required

There are no easy answers here. But this is a call for worker co-ops and unions to be more intentional in developing overlapping strategies to advance worker empowerment in the economy. Clearly, the challenges are not only on the co-op side of the equation. Indeed, employee ownership advocates’ memories of union betrayal are not forgotten. For example, in 1977, the Steelworkers’ union—now a major supporter of union co-ops—helped torpedo an effort to enable an estimated 5,000 workers to take ownership of a steel mill in Youngstown, Ohio. The failure then had enormous costs—and the plant shutdown that followed was an early step in the path toward the creation of what became known as the “Rust Belt.” Indeed, the Youngstown shutdown proved a harbinger of what is today called neoliberalism.

The point, in short, is not to rebuke a co-op developer’s misjudgment in a single case, but to lift up the importance of conscious collaboration. Fundamentally, achieving worker justice and power requires thinking beyond one business at a time. Sector-based approaches are required too. (The Fight for 15 is a prominent example of this approach). Opportunities to build economic power will be missed if worker ownership is not aligned with broad-based representation for frontline workers.

The Union Co-op Council of the US Federation of Worker Co-ops will be discussing some of the issues raised in this article on Friday, February 11^th, 1:00-2:15 EST. Free registration is available here.