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Originally posted at Truthout.
United Steelworkers President Leo Gerard talks to Truthout about the challenges and opportunities of a new labor model: the union co-op.
As the economic crisis festers for many long-term unemployed and underemployed people, the idea of worker-owned and worker-run cooperatives has become ever more appealing as a possible pathway toward an economy that works for everyone. Theorists such as Gar Alperovitz have argued for the importance of cooperatives in providing a nuts-and-bolts alternative to dominant methods of economic production: They offer an example of a different way of doing business that people can see and experience in their own lives.
As someone who loves to see organized labor on the move in any form, I am interested in the role that unions can play in promoting co-ops – and I have been excited to see the United Steelworkers take an especially proactive role in bolstering the cooperative movement. I spoke with Steelworkers President Leo Gerard about how union/co-op hybrids could change the experience of work for those who clock in every day and about the depth of vision it will take to make union co-ops a serious part of the American economy.
Given that cooperatives currently make up only a tiny percentage of our economy, I first asked Gerard whether he thought co-ops could be viable at a larger scale.
“People don’t realize there are millions of people in the United States and Canada that are already members of co-ops,” he said. “When I was a kid growing up in northern Ontario, my parents used to shop at a food co-op. I think that there are already a lot of these businesses; people just don’t know it.”
Gerard next discussed the structure of “union co-ops” that the Steelworkers have begun, in partnership with Spain’s Mondragon cooperatives. Here’s how it works: Employees can join the union of their choice, and they are guaranteed a living wage, benefits and a collective bargaining agreement. In some of the new union co-ops, workers get ownership shares in the enterprise, which they pay for a little at a time out of their paychecks and which accrue equity over a period of six or eight or 10 years. Workers vote on the composition of the management team and collectively bargain with that team to set workers’ wages, benefits, and procedures for handling disputes.
I asked Gerard about how the union’s work with Mondragon came about.
“After the business cycles of corruption and manipulation destroyed so many enterprises since ’07, ’08, ’09,” Gerard said, “we started to have a discussion amongst some of our officers. I had read about the Mondragon a long, long time ago, and we started a dialogue with them. We came to an understanding on what we call the ‘union co-op’ model. We’d use some of the structure of Mondragon and some of their experiences, knowledge and skills. And we’d try to find enterprises [in the US] where we could adapt that.”
“It has evolved slowly,” he continued. “I’d rather go slow and build a good foundation than go fast and fail. We’ve developed a pretty broad network of allies and supporters. We’ve got some projects going on, including a green laundry concept in Pittsburgh. In almost every major city, there are industrial laundries. The work is hard, it’s dangerous, and it doesn’t pay very well.”
The Steelworkers have helped launch a cooperative laundry in Pittsburgh that allows workers to benefit from the profits of the business and that uses environmentally friendly technologies.
“It’s going to have roots. It’s going to have customers. It’s going to have structure,” says Gerard of the Pittsburgh laundry. “We’re talking to universities, hospitals and hotels. They get the advantage of being in a green laundry that’s efficient. They get to be in a progressive organization like a co-op and then build forward.”
I asked about what expansion would look like.
“Once it’s successful,” he said, “we take the model to other cities and try to build a network of green laundries. At the same time as we’re building that network, we would look at the manufacturing of the green laundry equipment. If you’ve ever seen one of the modern green laundries, it reminds me of a steel mill or a paper mill. If you’ve got a modern steel mill or a modern paper mill, you put the raw material in at one end, it comes out at the other end, maybe half a mile later, with .0001 of an inch of deviance, never touched by human hands. [With the laundries,] you put the raw material in, which is sheets and pillows and all that, and it’s an assembly. It comes out at the other end, folded, and piled up and identified for where it’s going to go.”
Gerard says the plan is for the cooperatives to expand from providing the service work at laundries into actually manufacturing the machinery. Moreover, he’s committed to nurturing their development over the long haul: “This wouldn’t happen in six weeks. It might take 10 years to evolve. You’ve got to have a vision.”
I next asked him if industrial laundries were chosen as a target for a cooperative because – unlike traditional manufacturing industries – the jobs can’t be outsourced to other countries.
“I wish I was that smart,” Gerard said. Instead, he emphasized that the choice of targets was based on a more immediate pragmatism: “It’s where the low fruit was. The green laundry idea fits the complete program. You’re doing something for the environment” – by more efficiently using energy than in traditional laundries – “and you’re creating meaningful jobs that can pay decently. If you can take that structure and [replicate] it in different places in the country, you can build the capacity for the cooperatives to come together. That’s my view with this union co-op Mondragon-Steelworker concept,” he said. “Once we show successes, people will say, ‘I want some of that.’”
I asked how cooperatives might affect the experience of going to work for people who work there. Oftentimes, the same deep-seated grievances between workers and management that help drive a unionization campaign can also make it tough for a healthy work environment to form in traditional workplaces, even once workers win a union. I wondered if union co-ops could provide a way for the labor movement to encourage workers to realize their best selves in the workplace and to overcome the difficulties in adversarial situations.
Gerard responded by emphasizing the generally dismal state of labor relations: “The reality in North America is that the management culture that comes out of the business schools, that comes out of the National Chamber of Commerce, makes unions the target. The business community [has] bought into that.” Therefore, if you want to bring your coworkers together in a union, he said, “You have to organize in secret. There are very few places where you’re going to go from an unrepresented workplace and organize right out in the open. You start off in a hostile environment.”
“The statistics are that employers fire people, punish people, isolate people, intimidate people. When that’s done, the relationship is steeped in adversity and steeped in conflict from the start, regardless of how [an organizing drive] turns out.”
By contrast, he added, “if you start off in an environment where you’re transforming a company into a cooperative, or you’re organizing a new operation into a cooperative, it has to start off in the open. It has to start off in a way where information is shared, and knowledge is shared, and decisions are shared. You want to have the kind of relationship where workers are more knowledgeable, are more involved, are going to make good decisions.”
For that reason, Gerard believes that the union co-op model offers hope for a type of workplace relationship that only has room for improvement over today’s economy. “It’s not utopia,” he said. “It’s an experiment. [But] if it works, it can’t be any worse than the system we got now.”
Beyond the Pittsburgh laundry, the USW has been hard at work – in partnership with the Ohio Employee Ownership Center (OEOC) – to put together a template that unions interested in forming cooperatives from scratch can use to build their own projects. The template highlights what the USW says is a key difference between most mainstream co-ops and a union co-op: “Although it may be common within larger co-ops to elect people to look out for the day-to-day interests of the worker-owners as owners, it’s decidedly less common within co-ops to elect people to look out for the day-to-day interests of worker-owners as workers.” To address workers’ needs, the union-co-op template suggests creating a Union Committee to act as the workers’ agent for bargaining the contract with management. Thus, union co-ops would explicitly have workers’ needs in mind when structuring the working conditions and wages within the co-op. This is something the USW says it is putting into practice in its nascent projects in Cincinnati. Looking to the future, it will be interesting to see what differences emerge in how workers experience union co-ops with Union Committees versus those in other types of co-ops.
With this in mind, I was curious if the Steelworkers’ experimentation with co-ops made Gerard feel more or less optimistic about the possibility of organized labor’s survival in the United States.
“Here’s what I know,” he said. “There’s not an advanced democracy on the planet that doesn’t have a strong free labor movement. Anytime there’s been totalitarian regimes, the foundation of replacing those regimes has been workers coming together with students and other disadvantaged groups in society and fighting for democracy – democracy with a free labor movement.”
“As bad as everything is on the public attack on the labor movement and some of the nasty misrepresentations that are out there, if labor law were changed, people would want to join unions. In spite of all the nastiness that’s brought us, we’re going to survive. Work is changing. You’ve got all kinds of freelancers. We’re going to grow, and we’re going to have to modernize. There are models out there that have to be experimented with, and the union co-op is one of those models.”
“I think if we’re successful in the initial stages, even if it takes a while, we will have a new model that people can look at and promote and grow. What makes me optimistic is that there is a strong consensus that most of the country is fed up with the existing model. When you end up with an economic model where the banks are too big to prosecute, when you end up with 140 companies controlling 70 percent of the world’s production, what does it mean for the little guys?”
“I’m not sure that we’re going to turn Ford Motor Company into a co-op,” Gerard said. “But maybe some of the folks that provide auto parts to the Ford Motor Company can become a co-op.”
After all, he argued, the status quo alternative calls out for replacement: “The model that’s out there stinks.”
Originally posted at Calitics.
|Cindy Chavez is running for Supervisor District 2 in Santa Clara County. In March, the Santa Clara County Board of Supervisors called a special election to fill the vacancy for Supervisor in District Two. The primary will be held June 4th. District 2 covers the downtown of San Jose, east side of San Jose, and southeast of downtown San Jose. It is one of the most ethnically diverse-and poorest-parts of Silicon Valley.As a labor leader, Chavez considers helping working families to be among her core values. She received a meaningful education in public policy through her two terms on the San Jose City Council and as Vice Mayor. I sat down with Chavez to discuss her policy priorities and this race with the Calitics community.|
|I asked Chavez why her labor and public service background has prepared her well for the Board of Supervisors.”I think one of the opportunities with this seat is to demonstrate that being a progressive leader and policy maker means that you have the ability and the desire to both make sure the government runs well with high quality services; and that it serves the most needy in our community. That’s why I’ve chosen to run for the Board of Supervisors.”One of her key priorities is education. As Chavez described, “One of the opportunities we have is a program called School Link Services, which means that we can put (in partnership with school districts) mental health services in the schools and catch the needs of children at a much earlier stage than we do today.”I noted that when she served on the San Jose City Council, Chavez fought hard to make sure that every child in San Jose County had access to health insurance. ”Children do better in school if they’re healthy and they don’t miss school days,” she said. “So those are the opportunities we have right out of the box to help children thrive in our community.”
Chavez prioritizes education and raising healthy young children to become healthy adults. She explained that public education is about more than measuring test scores and teachers. She explained, “One example is the implementation of the Affordable Care Act. What it means is that we have to be very focused on prevention. So what happens if we can connect with children and families at a young enough age to prevent chronic obesity? That means you’re not going to have somebody potentially with, diabetes, or heart disease, or blindness or amputation. In many respects, the County has an opportunity like we did with tobacco placement to start to force ourselves to invest in children in a meaningful way.”
Chavez says that she is capable of caring about people and governing effectively, and that the two aren’t mutually exclusive. The Chamber of Commerce has targeted her for her ties to organized labor, suggesting that her advocacy for workers’ rights could interfere with her ability to govern. I asked Chavez what she would say to an undecided voter about this, and she took the question head on. “I think it’s easier for people during elections to try to categorize people. If you’re pro labor, you can’t be pro business. What’s silly about that is that no leader I know in the labor movement is opposed to healthy vibrant businesses. We need companies to thrive in order to make sure that folks have decent wages, and access to health insurance and all of those benefits allow people to be part of our society.”
Chavez continued, saying that abandoning working people to score political points can negatively impact one’s ability to govern. “San Jose was one of the safest large cities in the nation,” she explained. “But we’ve seen a huge rise in crime because the mayor took an anti-labor position in an attempt to manage the budget. But all we did was take a really safe city and make it unsafe. And so we need leaders who can both understand the importance of growing healthy vibrant economy – not on the backs of people, but with the vision and the idea that we are one community – and that we need to be able to invest, whether that’s in education or in safe jobs, at the same time that we support businesses thriving.”
I pointed out that the Chamber has been trying to make the case that County services are going to have to be cut in order to maintain public employees’ wages and pay for the pension plans that the County agreed to years ago.
Chavez responded that as the economy swings back out of a bad business cycle into a better one, making smart continual investments is one way to attract the best and the brightest to apply to be in the public sector.
“They forgo high pay for a stable retirement, and that promise has served the public sector well. That being said, everybody understands that we need pension reform–but if we don’t understand how we got into this situation, then we don’t address the problem clearly. So we have to acknowledge that there were huge dips in the economy that cost everybody. Everybody – even cities that were fully funding their pension plans have had challenges, so that’s one set of realities. But the other is that we have a really expensive health care system – and as soon as we can get our arms around health care costs, a lot of the pressure does lift off our pensions.”
I asked Chavez to say more about public safety and what steps she would take to enhance it and make it sustainable for the County.
“When as an average voter you call 911,” she said, “you don’t look at whether it’s the sheriff or the Highway Patrol or who’s responding to you. You want someone to respond. You want an ambulance to arrive for a loved one. Part of what this economy is allowing us to do is to take a look at services that we provide and figure out how we can work together. So for example, the County has maybe 13 cities total, and many of those cities have their own police forces, not all of them. Some have the deputy sheriff. I think it’s very possible to have the deputy sheriff work with the police departments in all of the areas to make sure that we are fighting crime as a team. Because, frankly, criminals don’t respect too many boundaries, and we have to stop thinking in a boundaries way. We have to start analyzing problems, dealing with those problems, and then being aggressive in terms of safety. We should take our resources that are scarce, say let’s better utilize them, and work more collaboratively.”
Chavez pointed out the importance of fully funding after school programs, as a less expensive way of preventing crime. “As soon as those after school programs went away, we saw a spike in crime because children didn’t have anything to do after school. We saw an increase in burglaries and other kinds of crimes. So one of the things we have to do is take our scarce resources and invest them in after school activities, making sure that children have a safe place to be, that they’re occupied, and that they have a place to do their homework so they stay in school. It is a relatively small investment for a huge payoff as these children become responsible adults.”
Recently Chavez received a high profile endorsement from BAYMEC, the regional LGBT advocacy group. I asked her how she views her responsibility to members of Santa Clara County’s LGBT community.
“When a person runs for office, we all have an obligation to make sure that we come into office with our values, we serve with our values, and we leave with those values,” Chavez responded. “BAYMEC has a special place in my heart because the civil rights of the gay and lesbian community and civil rights in general are core values for me. Getting BAYMEC’s endorsement was a reminder that we are in this together. That we have to continue to see the civil rights of the gay and lesbian community and transgender community the same way we see that for every other community, and be aggressive in fighting for it. It’s easy to see here in California where Proposition 8 passed not so many years ago, that a majority can make a bad decision about a minority. The role of government is to protect the interests of all voices, weak or strong. It’s been an honor for me to support gay marriage when I was in office. In fact I was threatened with a recall for my support of the gay and lesbian community, and it was one of my prouder moments.”
I asked Chavez to explain what approach she will take as Supervisor in working with the business community.
“When I was on the San Jose City Council I collaborated with the business community on many, many endeavors; building high rise housing in downtown San Jose, trying to streamline the permitting process, working on new ways to attract businesses, bringing big events to San Jose that we thought would put us on the map. Anybody who chooses to run for office, win lose or draw, you have to be somebody who believes that all of us working together is better than all of us working apart. I would be no different. I hope that now I’m a more experienced candidate and have had more time to work in the community, I will do an even better job as a member of the Board of Supervisors.”
Chavez had one final thought on being considered a polarizing figure: “I do think that when you choose to run for office you have core values that you believe in and that you hope that others share. If they don’t, then you want to be persuasive about them. For me this is equality and transparency and honesty. But it also means being as strong as you can be for the community that you represent, and this seat would represent some of the poorest people in our community.”
“My comfort is the saying that polite women don’t make history. More importantly, polite women or polite leaders don’t get health insurance for kids, or don’t raise the minimum wage, they don’t make it safe for people to work in their workplaces. They don’t miss an opportunity to make sure that everybody has the right to marry who they love, and they don’t miss an opportunity to protect workers – not just the job, but their right to bargain collectively and to organize. And for all of that I am unapologetic. We need to be bold, all of us, in saying what we think needs to happen in this community.”
Originally posted at Yes! Magazine.
The steelworkers deal that could turn the rust belt green.
“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.”
Gerard was announcing a formal partnership between his 1.2-million-member union and Mondragon, a cluster of cooperatives in the Basque region of Spain.
Mondragon employs 83,000 workers in 256 companies. About half of those companies are cooperatives, and about a third of Mondragon’s employees are co-op members with an ownership stake in their workplace. Mondragon companies do everything from manufacturing industrial machine parts to making pressure cookers and home appliances to running a bank and a chain of supermarkets. With billions of euros in annual sales, Mondragon is the largest industrial conglomerate in the Basque region and the fifth-largest in Spain.
The cooperatives use workers’ cash investments as part of the capital needed to finance new projects, and worker-owner co-op members get to vote on strategy, management, and business planning. The highest-paid managers’ salaries are capped at six to eight times what the lowest-paid workers make—as opposed to the United States, where CEOs now make 380 times more than the average worker.
Building union co-ops
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.
But how do union co-ops differ from traditional worker-owned co-ops? The report explains that the key difference is that workers in a union co-op can appoint a management team (from within their own ranks or from outside the co-op) and then bargain collectively with management. The resulting collective bargaining agreements can set wage rates for all the co-op’s jobs, choose health care and other benefit packages, decide how workers will earn time off, and determine a process for grievances and arbitration of workplace disputes.
In addition to producing the union co-op template, the USW has worked to get pilot cooperatives started in the United States. The union has carefully examined the Evergreen Cooperatives, which were started in Cleveland in 2009 with a blend of foundation money, public funds, and private investment capital. Drawing from Mondragon’s principles of shared prosperity for workers and democratic governance, Evergreen launched a commercial laundry that now cleans more than four million pounds of laundry per year and employs 30 people. 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. The example was an important one for the USW’s pilot projects, suggesting a blueprint to keep jobs local, tie new businesses to existing city institutions, and give workers a voice in company operations.
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.”
Reviving a Pittsburgh laundry
A group of unions, including the USW, is helping to launch the Pittsburgh Clean and Green Laundry Cooperative, a new industrial laundry. Several years ago, a local laundry closed, leaving more than 100 people without work. Together with the USW, the workers began exploring the idea of creating a cooperative to take over the business. The union has now completed a feasibility study for the business and is lining up commitments from clients such as local hospitals and clinics. A full laundry plant is scheduled to be up and running soon, thanks in part to the support of the Steel Valley Authority (SVA)—Pennsylvania’s publicly funded initiative for saving and creating industrial jobs—and other local foundations.
“Right now, several of the larger hospitals are sending their laundry out pretty far to get it done, so [going local] makes sense cost-wise, and it makes sense green-wise,” says Rob Witherell, the USW’s cooperative organizer and strategist.
“The intent is that the folks who worked at the previous laundry would be the first to join as worker-owners,” Witherell adds.
Under the union-cooperative model, the laundry’s employees would be able to join the union of their choice, and the jobs offered at the plant would provide a living wage, benefits, and a collective bargaining agreement. As worker-owners, the employees would also gain equity in the business.
“The way it works in Cleveland is the folks working at the laundry—if they’re to become owners—have their initial ownership investment financed by the company,” explains Witherell. “Fifty cents an hour is deducted from their wages for a period of three years, until they have met the requirements for ownership.”
Worker-owners vote on decisions about the management of the company. And, as in Mondragon, a share of profits is added to the ownership accounts, so that long-term workers can retire or leave the company having accrued a significant stake. “In Cleveland, they’ve done the math, and they’ve figured out that in eight years—if they meet their business targets, which they have so far—those folks will each have $65,000 in their ownership accounts,” Witherell says.
For the SVA, the model is one it hopes to spread further: It has announced a goal of establishing a technical assistance center and a revolving loan fund to help worker groups that want to use the Mondragon model.
Cooperative harvest in Cincinnati
In the past year, the USW has supported work to create the Cincinnati Union Cooperative Initiative (CUCI). CUCI has two projects in the pipeline: a railway manufacturing co-op and a cooperative for retrofitting buildings for energy efficiency. A third project, already in operation, pairs commitment to food sustainability with a worker-ownership model in the Our Harvest cooperative.
Our Harvest is a “food hub” that will allow institutions in the metropolitan region—such as universities, hospitals, and hotels—to buy produce that is grown, harvested, and packaged by worker-owners. Currently, says CUCI President Kristen Barker, the nascent project has an incubator farm for training farmers and food production workers, with two apprentice farmers, a mentor farmer, and three part-time support staff.
The apprentices, who are cardholding members of the United Food and Commercial Workers union (UFCW), are learning farming and production methods from the mentor farmer and are running a community-supported agriculture (CSA) business from the incubator farm in the heart of Cincinnati. The CSA currently serves 60 residential customers, plus three restaurants and three retail locations.
Our Harvest grows its food on a 30-acre farm in an urban neighborhood. “It’s amazing that that exists,” says Barker. “We’re interested in being on bus lines,” says Barker, pointing out that the co-op considers making jobs accessible by public transit to be part of a sustainable, fair approach to job creation.
In order to serve the large institutions Our Harvest hopes to make the mainstay of its operation, the farm has to expand. “We need to get to 1,000 acres’ worth of production,” Barker says. “To get up to 1,000 requires a ton of skill, and a lot of land.”
CUCI isn’t going it alone in the effort to expand Our Harvest. The Ohio State Cooperative Development Center is doing a study of how Our Harvest can scale up to the 1,000-acre mark. Efforts are under way to house an expanded apprenticeship program at a local community college. And Mondragon is working closely with CUCI to firm up Our Harvest’s structures and locate additional financing.
Co-op strengths and limitations
The “union co-op” model imports some of Mondragon’s structural innovations to the American economy: most importantly, it gives workers a say in the direction of the business as well as in their own pay and working conditions. It remains to be seen exactly how workers’ voices will be heard through the union co-ops’ collective bargaining processes, but it will likely have some of the flavor of worker empowerment already in effect at Mondragon.
Michael Peck, the North American delegate for Mondragon, describes the type of decisions employees make within Mondragon’s worker-owner structure: “They vote to lower their salary, they vote to raise their salary, they vote to make sacrifices, they vote to reward themselves if the situation calls,” he says. “They are totally involved, and it’s that kind of participation that produces a successful company that is attuned not only to the marketplace but to itself.”
For the U.S. labor movement, this point is a critical one. A cooperative model places union members firmly in the role of being innovators. It allows the labor movement not only to promote a positive vision of members realizing their best selves in the workplace, but also to provide the skills that will enable people to do that. Therefore, while it may not rebuild labor’s ranks with significant numbers of new union members, this model might do something even more important: Give working people a way to become true stewards of the economy.
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.
When asked about how the model union co-ops might take on the offshoring issue, Peck acknowledged the difficulties, but he also expressed hope. “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.
“Most people don’t want to be victimized again and they are interested in trying new models.”
“At Mondragon, we have a saying: ‘This is not paradise and we are not angels.’ I think that’s important, because there’s a tendency to gush up Mondragon as this perfect ideal in the sky, when it’s not perfect and it’s not in the sky. It’s in factories. it’s in valleys, it’s in making things. But our story has a happier ending because people feel engaged in the process and they see the equality of opportunity, which is missing in more vertical structures.”
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