How Worker-Owned Cooperatives Can Solve Many Small Community Problems.

Big businesses have been abandoning our small towns and communities for greener horizons.  A company should be profitable, their leadership has a responsibility to make profitable decisions and we cannot and should not expect that to change. What we can and should expect is an alternative community development process that works. 

The Problem:

Companies like Uber, Airbnb and Kickstarter was hailed as champion up. It was seen as a way to help people build community, reduce unnecessary consumption, and generate extra income. It was based on the brilliantly simple notion that when we share, everybody has more.

But this vision quickly vanished. Tightly controlled, profit-driven corporate platforms corrupted that promise with their brand of transactional “sharing” that all too often depends on externalizing the costs and risks to users and individual service providers — Airbnb hosts and Uber drivers, for example. In addition, those that create most of the value on these platforms usually have no say in how the businesses are operated. Such practices are part and parcel of an effort to grow quickly at all costs, and sometimes with the ambition to establish a global monopoly.

This drive has a number of negative consequences which undermine the admittedly great promise of these services, including poor service, racism, and inadequate safety measures. It also leads to declining trust in these companies as they appear to take advantage of users in order to reap outsized financial windfalls. Uber and Airbnb are among the most well-known examples, but these winner-takes-all “sharing” platforms are emerging in other industries across the globe.

Why we need big business: 

Big business headquarters was once a good idea. Big business headquarters mean revenue from clients in New York, London or L.A can be used to pay salaries and taxes in Chicago. This is why cities fight over and offer huge incentives to big businesses.  Large headquarters has the potential to pump “new money” into local economies daily. On the other hand, as companies embrace outsourcing and automation, the economic impact of hosting these headquarters are minimized, as salaries are sent to China and India tech specialist and accountant are being replaced with automated accounting software such as QuickBooks.

Question: How can Coops increase employment and revenue that competes with big business ability to do likewise?

Service-Based Coops To The Rescue

Service base coops host a lot of potentials, especially service-based coops that do not cater to a specific market. Service-based Coops can take revenue from one area and pump this revenue into their local economy.  These coops are scalable and have the ability to compete with big business economic benefits.

Here’s Why!

I will use a web design coop as an example.

Size:  Small Town: A Web Design Worker-Owned Cooperative can scale as long as they have the client base to do so. Scaling is affordable because web design is a service based industry which requires minimal equipment.

Taxes: Small Town: A Web Design Worker-Owned Cooperative can employ 500 , 1000 or even 5000 web design to serve the world. Local and income taxes can be collected by the city government.

Economic Development: Small Town clients aren’t local, revenues they receive from their non-local clients is used to support local economic growth via salaries, taxes and typical expenditures. This means more jobs, all across the board as employees spend with traditional structured businesses.

Automation:  Small Town: A Web Design Worker-Owned Cooperative is employee-owned. Therefore,  the employees have the unique ability to embrace automation without laying off workers or reducing salaries. Regardless, the employees will now own the automation equipment and still receive profits produced by the new automated processes.
Outsourcing: Employees can outsource work to increase their competitiveness but still receive salaries.  Employees will be outsourced work processes but not workers. Making the employee more efficient.

As you see, it is possible to embrace and mitigate the problems of automation and outsourcing via cooperative economics.

Unless we do it, it won’t happen.