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Worker Owned Cooperatives and the Ecosystems That Support Them

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Worker Owned Cooperatives and the Ecosystems that Support Them By Rachael A. Tanner BA in Political Science University of Michigan Ann Arbor, Michigan (2007) Submitted to the Department of Urban Studies and Planning in partial fulfillment of the requirements for the degree of Master in City Planning at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY June 2013 © 2013 Rachael A. Tanner. All Rights Reserved The author here by grants to MIT the permission to reproduce and to distribute publicly paper and electronic copies of the thesis document in whole or in part in any medium now known or hereafter created. Author_________________________________________________________________ Department of Urban Studies and Planning (5/24/2013) Certified by _____________________________________________________________ Professor Xavier de Souza Briggs Department of Urban Studies and Planning Thesis Supervisor Accepted by______________________________________________________________ Associate Professor P. Christopher Zegras Chair, MCP Committee Department of Urban Studies and Planning 2 Worker Owned Cooperatives and the Ecosystems that Support Them By Rachael A. Tanner BA in Political Science University of Michigan Ann Arbor, Michigan (2007) Submitted to the Department of Urban Studies and Planning in partial fulfillment of the requirements for the degree of Master in City Planning at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY Abstract By emphasizing wealth creation, communities can not only cultivate streams of income, but also build wealth. Through collectively owned and democratically governed assets, communities can build wealth. Economic development policy and practice should emphasize wealth creation. Employee ownership, through worker cooperatives is one way to build wealth. But worker cooperatives are rare in the United States; this is because there is not a supportive cooperative ecosystem. The province of Québec, Canada has developed a robust cooperative ecosystem, leading the province to have the most cooperatives in Canada and a greater density of worker co-ops than the US. This thesis explores the Québec cooperative ecosystem through analysis of interviews with 22 leaders of over 19 organizations, including two worker cooperatives. This thesis seeks to understand (1) how the organizations and institutions in the ecosystem work together, (2) how they support cooperatives, and (3) how the lessons from Québec can inform the development of a cooperative ecosystem in New York City. This study reveals (1) the importance of historical, political, and cultural context in shaping the potential and possibilities for cooperative development; (2) that government support through policy, funding, and collaborative leadership is critical for the ecosystem’s development; (3) apex organizations are necessary to provide leadership and technical assistance among cooperatives; (4) interaction among cooperatives of all kinds leads to a stronger network; and (5) the size of the sector makes it easier to secure public support. Thesis Supervisor: Xavier de Souza Briggs Title: Associate Professor Reader: J. Phillip Thompson Title: Associate Professor 3 Acknowledgements Thank you Phil, Nick, Yorman, and CoLab for turning me on to democratic wealth generation and the new economy; you helped me realize that I’m not a foolish idealist. Thank you to everyone who agreed to be interviewed for this thesis. I am truly grateful that you took time to share your story, your wisdom, and to let me into your world. I learned more than I could have imagined, and much more than can be captured in this thesis. To my interviewees in Québec, your stories inspired me! To my New York contacts, I am hopeful about and encouraged by your work. Thank you to the Neighborhood Economic Development Advocacy Project, especially Josh, Dey, and Gabe, for taking a chance on a graduate student. I am so happy to know you, to say that I worked with you, and honored that I can contribute to your work. Thank you Public Service Center at MIT (especially Alison) as well as the Rodwin and Emerson Families and Committees; your support made this research project possible. Thank you Xav for steering me through this process, without you I literally would not have known how to begin. You tirelessly provided feedback, guidance, and kept me on track. I am truly indebted to you; hopefully I can pay you back or pay it forward. Thank you JoAnn for all the thesis prep deadlines, I don't care if people complain—they helped me! Thank you thesis group, Carri, Drew, Katherine, RJ, & Keith, for giving me a place to talk, complain, cheer up, and learn how to make a table of contents; this experience would not have been the same without you. Thank you Andrés, you might be the only person (other than my committee members) who read the whole entire thing; nothing says love like reading my thesis. Thank you to my parents, Carol and Elijah, my siblings, Jake, Elijah, and Cindy, and my entire family, who always encouraged me; telling me that I can do anything I put my mind to. I believed them, and it’s gotten me this far! Thank you to all the warriors for justice and love who have come before me, upon whose shoulders I stand, and in whose shadows I am immeasurably humbled. Thank you to those who will come after me. May this effort to build knowledge not be wasted. Thank you God, for my life, for my breath, and for possibilities. May this thesis be not only an achievement, but also an effort to sow love and light in the world. Shout out to Kalamazoo, Michigan, which not only really exists, but also is where I’m from. And thank you to my readers, my audience; I am so glad you decided to explore this topic. Read on! You won’t be disappointed. 4 Table of Contents Introduction ........................................................................................................ 8 Section I: Purpose.................................................................................................. 8 Section II: Research Questions & Methods ............................................................. 9 Case Selection ............................................................................................................................. 9 Data Collection & Analysis ...................................................................................................... 11 Section III: The Following Chapters ..................................................................... 12 Chapter 1: Cooperative Development as Economic Development ........................ 17 Section I: Wealth Creation Not Job Creation ........................................................ 17 Economic Development ........................................................................................................... 17 Wealth Creation through Employee Ownership .................................................................... 19 Section II: The Empirical and Historical Record of Worker Cooperatives .............. 20 Definition ................................................................................................................................. 20 Advantages and Disadvantages ............................................................................................... 21 History and Contemporary Terrain ........................................................................................ 24 Obstacles .................................................................................................................................. 27 Section III: Ecosystems ......................................................................................... 30 Chapter 2: Québécois Cooperatives in Contemporary and Historical Context ...... 32 Section I: Québec ................................................................................................. 32 Section II: Cooperatives in Québec ....................................................................... 33 Cooperatives ............................................................................................................................. 33 Worker-Owned Cooperatives .................................................................................................. 34 How Worker Cooperatives Start and Who Starts Them ........................................................ 36 Section III: A Historical Perspective .................................................................... 40 1900 – 1930: Dawn of the Cooperative Movement .............................................................. 40 1930 – 1945: Expansion ......................................................................................................... 42 1960 – 1980: Quiet Revolution .............................................................................................. 43 1980 – Present: Contemporary Cooperatives ........................................................................ 44 Section IV: Contemporary Perspectives on Cooperatives in Québec ...................... 49 Part V: Summary and Implications ...................................................................... 51 Chapter 3: The Québécois Cooperative Ecosystem .............................................. 54 Section I: The Big Picture .................................................................................... 54 Section II: Government ....................................................................................... 54 Federal Government ...............................................................................................................
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