Investing in All Our Communities: “Cooperative Enterprises for Job Creation and Business Development”

Economic Democracy in Dane County, Part Two


By Greg Brown — Seeking to develop a stable, sustainable, and equitable local economy from the ground up, in 2009 a group of dedicated Madison area worker–owners from local worker cooperatives founded Madison Worker Cooperatives (MadWorC), an organization that provides educational resources and limited technical assistance to area residents interested in forming a new worker cooperative.

MadWorC’s mission—“to sustain existing democratic workplaces, create new democratic workplaces, and educate the Madison community on democratic workplaces”—compelled the fledgling organization to join the Wisconsin Uprising of 2011, in which hundreds of thousands of Wisconsinites gathered to protest Wisconsin’s union-busting Act 10. Marching around the Capitol, members of MadWorC (and the worker-cooperatives they represented) joined with labor unions to protest Scott Walker’s all-out assault on collective bargaining.

Also joining the Winter 2011 protests was Paul Soglin, who was then campaigning to oust incumbent Madison Mayor Dave Cieslewicz. Members of MadWorC engaged Soglin in an ongoing conversation about strategies Madison might take to wrest control of our local economy from state and national corporate-owned politicians who were seeking to extract our local wealth. While both mayoral candidates campaigned on a platform of worker rights, Soglin explicitly promised to support worker cooperatives.

Soglin was elected by a narrow margin on April 5, 2011, telling Madison’s NBC 15 News the next day, “We have to build a foundation within city government to respond to what the state is doing ... and then, we won’t wait till then but simultaneously, we’ll start mapping out our strategy to deal with the fundamental issue of including everybody in this community’s economy.”

In June 2012, Mayor Soglin made good on his promise, convening a Cooperative Business Conference, to which he invited economic development planners from all over the state. The conference highlighted the potential for conversions of local businesses to the worker-cooperative model, as well as the positive economic and social impact of worker-owned enterprises.

Clear need for a better model

Adding urgency to the prospect of local coop development was the 2013 release of the Race to Equity Report, which among other shameful statistics, noted that Madison’s local jobless rate in 2011 was 25.2% for blacks but only 4.8% for whites, while the national unemployment rate for blacks was about twice that of whites.

Even worse was the data on Dane County’s poverty disparity: 54% of black Dane County residents lived below the poverty line in 2011, compared to 8.7% of whites. In another report, Dan Kennelly, a City of Madison Economic Development Specialist, revealed that 27% of new jobs created between 2001–2012 were primarily due to one company: Epic. Clearly, the success of one area business was not the rising tide to raise all boats. Consensus was forming around the need for meaningful, sustainable economic development for all Madison residents.

In September 2014, Mayor Soglin announced a five-year plan to fund a program that would later be named “Cooperative Enterprises for Job Creation and Business Development.” This announcement caught the attention of Northside Madison resident Rebecca Kemble, a worker–owner at Union Cab of Madison Cooperative who, starting in 2000, had gotten to know most of Dane County’s neighborhoods by driving a taxi on the Saturday night shift.

Kemble’s passion for workplace democracy has grown strong over the nearly 16 years since she first became involved in workplace governance as an owner at Union Cab. Her passion for worker cooperatives and talent for organizing and facilitation has afforded her many opportunities to develop workplace democracy not only in Madison but throughout the world.

Kemble is President of the US Federation of Worker Cooperatives and the President of CICOPA North America, the sub-regional body of the worker cooperative sector of the International Cooperative Alliance. She is also the Vice President of CICOPA Americas and serves on the Executive Board of CICOPA worldwide.

Taking skills into power

In late 2014, a few weeks after Madison Common Council District 18 Alder Anita Weier announced she would not be seeking reelection, Kemble saw an opportunity to put her organizational and relationship-building skills to good use. Motivated in large part by a desire to help Madison’s worker-cooperative initiative succeed, she announced in December 2014 that she would run for the District 18 seat.

Kemble’s strong ties to the Northside community and its schools, the worker-cooperative and labor movements, and environmental groups attracted a large group of volunteers to her grassroots campaign, and these volunteer efforts were coordinated by members of Progressive Dane. On April 7, 2015, Kemble handily won election to the Common Council, and Mayor Soglin won in a landslide.
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According to Kemble, “cooperatives form out of a desire of community members to meet a need that’s not being met either by the market or government. Cooperatives organize resources that are already here in our neighborhoods, harnessing the creative capacity of the human beings who already live here in Madison in order to generate new wealth in parts of the community where wealth doesn’t already exist.”

In Madison’s 2016 budget, $600,000 has been designated for “Cooperative Enterprises for Job Creation and Business Development.” This money is the first installment of an equal sum allocated to the program every year through 2020. The five-year program has received such broad support from the Common Council precisely because cooperatives have the potential to build up the economy in all our Madison neighborhoods and for all of our residents.

On February 2, the Common Council approved the city’s Request for Proposals (RFP) to manage the worker-cooperative fund program, which centers around three goals: “(1) Capacity building around technical assistance, financing, community organizing, and tracking and reporting the impact of cooperative businesses in the City of Madison, (2) Increased number of family-supporting, living wage jobs as a result of worker ownership, and (3) Community asset building: the technical and financial support for programs that help create ownership of businesses and community-owned assets with a focus on communities of color, low wealth communities and communities excluded or exploited within the traditional workforce.”

Cooperative coordination

Anne Reynolds, Executive Director of the UW Center for Cooperatives, is helping to organize the efforts of a broad coalition of cooperative, labor, community-based, lending, educational, and governmental organizations who are working together to craft a unified, cooperative response to the city’s RFP. Both Reynolds and Kemble are hoping Madison can learn from the flawed implementation of a similar initiative in New York City, where money was allocated to the development of worker cooperatives, but where there was no on-the-ground coordination.

By bringing multiple voices to the table so early in the process, this inclusive alliance of community organizations will be able to respond to the RFP with a unified voice, thus averting the prospect of having to stand by and watch competing organizations chip away at the fund in piecemeal fashion.

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“This isn’t a new permanent city program,” explains Reynolds. “It’s a shot in the arm. What we develop has to be sustainable.” To that end, she advocates allocating about half of the fund to technical assistance and capacity building, with the other half being used to jumpstart a lending program that the city would manage in partnership with existing organizations.

Because it’s a five-year program, she envisions the first two or three years might be weighted significantly toward the funding of education and assistance to new cooperatives, while years four and five would place more emphasis on loans, allowing the program to long outlive its five years of city funding.

Reynolds is quick to point out that Madison’s Alders “voted for this because it addresses income inequality,” which is one reason she has been working with MadWorC to develop a peer network of worker cooperatives, in which members of established coops mentor members from startup coops (who are likely first-time business owners) on how to meet the challenges of ownership.

New players, new resources

Alder Kemble, too, is making a point to reach out to community-based organizations that have the knowledge and the skill sets to help this program succeed, but who historically haven’t been consulted in any meaningful way on issues of local economic development. Early outreach into all of Madison’s communities will allow organizers to target the program to people who need it the most: marginalized communities, including communities of color and businesses where workers are exploited, such as home health care workers and painters.

Initially, startup support will focus on worker cooperatives providing living-wage jobs in construction/building trades, health care, transportation, food systems, green/solar retro-fitting, and light manufacturing.

It makes sense that with their background in cooperatives, Reynolds and Kemble are advocating for a cooperative response to the city’s RFP. Kemble describes it as “Stone Soup: the city provides the pot, but cooperatives and other established organizations add to it and share. If we nurture and build this up over five years, then the city can pull out. It’s important that we build these relationships now so we can begin to see what it will look like in five years.”

Local credit unions and cooperative lenders would be able to add to the loan fund, but the city is playing a pivotal role by assuming the financial risk, and thus ensuring that the loans can get to the low-income Madison residents who need the most assistance in developing their own democratically controlled business.

One of the barriers to starting up a worker cooperative in certain industries is the high capital required for entry into the market. Through this program, loans could be targeted to the people with the highest need for them: Alder Kemble cites the exciting possibility of a worker cooperative for drivers of refrigerated trucks.

With nearly a year of aldermanic experience under her belt, Kemble can now confidently posit that the relationship between the city and cooperatives is mutually beneficial. Under the Walker regime, it’s clear we can’t rely on the state to provide for our local communities’ needs.

In addition to worker cooperatives, Kemble remarks that “Madison has an interest in developing food coops, ag coops, and beverage coops. Cooperative development ensures that we’ll be able to provide our community with the things we need, that we’ll always need.”

And unlike Oscar Mayer, local worker cooperatives are here to stay.