Making Government Work

How New York City Is Advancing Worker Cooperatives

July 24, 2014
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How New York City Is Advancing Worker Cooperatives
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The Big Apple designates $1.2 million for this business model. Hopefully other cities will soon follow suit.

Wall Street, Fifth Avenue, Broadway and wealthy businesses are commonly what most of us probably associate with New York City. However, the city of skyscrapers and corporations is taking a step forward to promote another lesser-known industry: the worker cooperative.

New York City has now become the first city in the country to make worker co-ops a line item in its city budget, with $1.2 million set aside for the organizations.

While worker co-ops are a normal occurrence in Europe and Latin America, they are very rare here in the U.S. The business model varies greatly from your average corporation. For starters, everyone in a worker co-op is an employee-member and has an equal vote for who is elected to their board of directors. Perhaps the biggest difference, though, is that generally all profits are distributed equally among the employee-members.

The U.S. is currently home to only about 350 co-ops, concentrated mainly in the New York metro region, the San Francisco Bay Area and New England.

However, with the $1.2 million, New York is hoping to increase that number. The expectation is that the funds will support and expand 20 current co-ops, plus start 28 new ones — creating 234 new jobs in the process.

Since 2011, the city had been supporting worker co-ops through the Center for Family Life with just $150,000 of funding annually, but the government’s new measure is the first of its kind and will provide much needed support.

Money isn’t the only way that the city is encouraging worker co-ops; the Department of Small Business Services recently began offering classes on how to start and maintain them.

While $1.2 million isn’t a huge amount when compared to New York City’s $75 billion budget, it represents a major step in the right direction. In a city where rents are high and wealthy live alongside the poor, funding worker co-ops will provide residents with the opportunity to work and earn a living.

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