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The Growth of Citizen Co-Ops Is a Positive Development As Corporations Fail Us in Every Way

As economic hardship threatens communities, there is one bright light in the fog -- cooperatives -- which already serve 4 in 10 Americans and are growing strong.

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"Mondragon is the mother ship of what a thriving cooperative can be," said NCBA's Schwartz. 

For all Mondragon's successes, the cooperative has experienced criticism for how, in some cases, its co-ops have crowded out local businesses, and for its expansion into other countries with non-cooperative subsidiaries. 

"They're grappling with that," McLeod said. "First and foremost, they're business people. Their goal is to survive and be profitable for members."  In parts of Spain where co-ops thrive, McLeod observed no visible signs of extravagant wealth or harsh poverty: no big cars, no mansions, no homeless people begging for money. 

Mondragon's brilliance, say its advocates, lies in its ability to reproduce. And this reproduction is now occurring in the United States.
On an October day, McLeod flew from Bilbao, Spain to Cincinnati, where he spent three weeks traveling the  Rust Belt, weaving from Pittsburgh to Cleveland and Akron, Ohio, then to Ann Arbor, Mich. and Detroit. Incidentally, McLeod's first day in Pittsburgh coincided with the  United Steelworkers' announcement that it will create a worker-cooperative partnership with Mondragon.

Next, in Cleveland, McLeod learned about the  Evergreen Cooperative Laundry, a 100 percent worker-owned cooperative established by the Greater University Circle Institute at the Cleveland Foundation. The nine employees (owners) wash hospital linen at a facility equipped to handle 12 million pounds of industrial laundry. When the co-op becomes fully operational, it will employ 50 people. The foundation also launched  Ohio Cooperative Solar, a solar and weatherization company, which will eventually produce between 50 and 100 jobs. Both businesses dedicate 10 percent of their pre-tax profit to a fund to build a broader co-op network.

About five years ago, the Cleveland Foundation began an initiative with large anchor institutions--the Cleveland Clinic, University Hospitals, Case Western Reserve University--in University Circle, an economically devastated neighborhood in one of America's poorest cities. The 43,000 people who live there earn a median income of $18,500. Yet, the area's three anchor institutions spend $3 billion annually on food, janitorial, laundry and other services. The goal of the  initiative: channel the purchasing power of these institutions back into the community. 

"Lots of jobs have left Cleveland and companies have gone offshore," said Howard of the Democracy Collaborative, who assisted with the initiative. "[The anchor institutions] aren't going anywhere. They are very large economic engines, purchasing billions of dollars worth of services and employing tens of thousands of people." 

Initially, the  Evergreen project was an attempt to break down barriers between anchor institutions and the neighborhoods in which they reside, and create jobs locally. But there was a problem: People were so poor, jobs alone weren't enough, so planners began to think about worker-cooperatives as a way for employees to earn a salary, gain medical benefits and develop equity in the company. 

"It's not only about jobs for local residents. It's about wealth building," Howard said. "One of the strengths of the cooperative structure is that ownership of the company is broadly held; when 50 people own their business in their own neighborhood where they live, they're not going to send those jobs somewhere else." 

In 2010, the project will launch  Green City Growers Cooperative, a 5.3-acre greenhouse located in the heart of the city, which will employ 50 people. The food produced will supply anchor institutions, markets, grocery stores and wholesale distributors. 

After learning about Evergreen Cooperatives, McLeod left Cleveland and arrived in Detroit, a once-bustling city whose formal economy has grounded to a halt.

"It's kind of post-apocalyptic," McLeod said.

Not to mention, the city is a vast food desert. In 2007, the last  two major grocery stores in Detroit shut their doors. Now, residents buy food from nearby convenience stores or drive several miles outside city limits for the closest supermarkets. The  Detroit Community Grocery Store Coalition recently formed to create cooperative grocery stores within the city. This collaboration between 80 churches, consumers and workers will reinvest a portion of store profits into the creation of more grocery stores, and eventually meet Detroit's food needs. For Detroit, the development of co-ops is about survival. 

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