Ready to spearhead a worker cooperative ordinance in your city? Here are the basics:

What: A city policy to implement incentives for the creation of new worker cooperatives and conversion of conventional businesses to worker cooperatives. The policy will create and develop sources of tailored technical assistance for worker cooperatives, facilitate the integration of worker cooperatives into the supply chains of the city and other local institutions, and establish a revolving loan fund for financing worker cooperatives.

Why: Worker cooperatives are owned and democratically controlled by their employees, and are an important strategy for creating more resilient local economies. Compared to typical corporations, worker cooperatives are more efficient wealth-creators, tend to reinvest in the local economy, and typically provide salaries and benefits that exceed industry standards. However, worker cooperatives face a lack of public awareness and education about the worker cooperative business model and its benefits; limited sources of technical support for forming, operating, or converting a business to a worker cooperative; and difficulty obtaining financing for cooperative formation or conversion. Cities are in a unique position to influence how money circulates through the local economy by promoting start-up cooperatives and cooperative conversions as a key job retention strategy for local wealth building.

Where do we need this law? Every city in the country!

Key Provisions:

• Establish a fund to advance technical support and incubation for cooperatives and cooperative conversions.
• Require city-level worker cooperative expertise.
• Create a cooperative ecosystem council, composed of representatives from local organizations closely connected to the worker cooperative community, that will administer grant funds and inform city policy.
• Add worker cooperatives to the city’s existing system of bid discounts and preferences in contracting with local businesses. Require targeted outreach to worker cooperatives and financing assistance.
• Create a preference for worker cooperatives in the city’s purchasing system.
• Establish a low-interest revolving loan fund to capitalize worker cooperative start-ups and finance cooperative conversions.
• Create a set of land use incentives for worker cooperatives to make the review process less burdensome.

Examples:

• New York City invested $1.2 million in worker cooperative development last summer. In March, 2015, it passed a law requiring the city to report the number of contracts it awarded worker cooperatives and the number of worker cooperatives assisted by its Department of Small Business Services. The city must also recommend strategies to better support worker cooperatives.
• Madison, WI committed $1 million to cooperative development for the next five years. In the first year, the money will likely create a loan fund that will help finance start-up cooperatives and conversions to worker cooperatives, among other projects.
• Cleveland, OH helped facilitate an anchor institution based cooperative development strategy, creating green, worker-owned businesses in low-income communities that meet the purchasing needs of local universities and hospitals. Cities around the country are now looking to the “Cleveland Model” to guide their strategies to promote worker cooperatives. 

Resources:

• Sustainable Economies Law Center, Draft Worker Cooperative Ordinance
• Camille Kerr, Democracy at Work Institute, Local Government Support for Cooperatives (2015).
• The Democracy Collaborative, Policies for Community Wealth Building: Leveraging State and Local Resources (Sept. 2014).
• Federation of Protestant Welfare Agencies, Worker Cooperatives for New York City: A Vision for Addressing Income Inequality (Jan. 2014).
• Hilary Abell, The Democracy Collaborative, Worker Cooperatives: Pathways to Scale (June 2014).