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Can Worker-Owned Cooperatives Offer A Solution to Our Economic Woes?

Author: Mark R. Day
Created: 11 February, 2011
Updated: 13 September, 2023
6 min read

“People lives have been transformed by the cooperative experience,” said a worker.

    The worker-owned cooperative, an economic workplace model that has been around for decades is making a comeback. In some parts of the U.S. new coops are sprouting up, cutting unemployment rates and revitalizing economically depressed communities. 

    You won’t find too many in conservative Southern California. But in the San Francisco-Oakland Bay Area, such businesses are thriving. Each has a unique history, based on workers’ needs and the community where they live.

recently toured several cooperatives in Oakland and Berkeley and spoke with people whose lives have been transformed by the cooperative experience.

    Sandra Martinez, a worker at A Taste of Denmark bakery in Oakland, recently told her story. In mid-2010, Neldam’s, the original bakery, suddenly went out of business after 81 years. The building’s owners, Kevin and Sukhee Yoo, faced with an empty property, formed a coop with 12 workers, including Martinez, re-naming it A Taste of Denmark.

    “I didn’t know what a cooperative was,” said Martinez, seated at a table near the baked goods displays. “We weren’t asked for money. They wanted our experience.” 

    Martinez said that for the workers, the bakery’s morale changed for the better. “Before, the bosses yelled at each other and at us,” she said. “Things are less stressful now. We have a better sense of what we are doing. Besides, my pay has improved and I am guaranteed my 40 hours a week.”

    Another side effect, say the bakery workers, is that A Taste of Denmark is now expanding its menu to cater to the Latino and Asian markets and has a website featuring specials and new products.

The Mondragon Corporation

    The worldwide gold standard for cooperatives is the Mondragon Cooperative Corporation, based in the Basque country of northern Spain. In the aftermath of the Spanish Civil War, Father Jose Maria Arizmendiarriata, a former political prisoner of Gen. Francisco Franco, organized impoverished Basque peasants into a coop that manufactured paraffin stoves.

    More importantly, the priest established a set of principles to guide the cooperatives:  among them are open admission to all workers regardless of race, politics or religion; participatory democracy in management (one worker one vote); sovereignty of labor, wage solidarity, social transformation, and education.  

    Mondragon’s worker-owned cooperatives now include 120 workplaces, 87 of which are industrial factories that manufacture kitchen appliances, housewares, auto parts and machine tools. One is a large bank, another chain of supermarkets and still another is a university with 3,600 students.

    One of the largest factories is called Fagor. Managers tout its rigid safety standards and quality control. All machines are carefully tested for safe operation and workers keep careful records of any accidents.

    All of Mondragon’s workplaces have management selected by workers and yearly assemblies where workers set policies and elect their governing boards. 

    Mondragon executives and organizers regularly mentor worker co-ops throughout the world. Last year, Gayle McLaughlin, the mayor of Richmond, Calif., spent a week in Mondragon and shared her findings with her constituents. Discussions are now underway in Richmond to establish a coop bike shop, a natural foods café and a chain of urban gardens.

    Another Mondragon-mentored project is the Evergreen Cooperative Laundry, established in 2009 in a depressed inner city Cleveland Ohio neighborhood where industrial flight has taken place in recent years. Superior technology, and better than average wages, have made the laundry a highly coveted workplace for those seeking employment in Cleveland.

    Another Cleveland cooperative venture is the Green City Growers, which operates a hydroponic food production greenhouse in the midst of the city’s blighted areas. The project receives funds from the White House Office of Urban Affairs, H.U.D. and several foundations.   

The Mandela Food Cooperative

    Back in Oakland, Quentin Sankofa, one of seven young African-American worker-owners at the Mandela Food Cooperative, spoke of the difficulties in establishing a coop in a low-income community.

    The Mandela coop, located near the West Oakland BART station, provides fresh fruit and vegetables delivered daily by youths to small grocery and liquor stores in the area.

    “It is not an easy thing for low income people of color to start a business, let alone a cooperative,” said Sankofa. “No banks or credit unions wanted to lend us money. But after receiving funding and other support from the nonprofit Mandela Marketplace, the food coop began to stand on its own feet,” he said.

    “We received training in retail methods, the basics of nutrition and how to work together cooperatively. And we were also able to tap into redevelopment funds. Our short term goals are simply to survive these tough economic times, but long term we want to expand to a bigger space.”

The Arizmendi Bakeries

    The last stops on the coop tour: The Cheese Board in Berkeley and Emeryville’s Arizmendi Bakery. The Cheese Board, begun in 1967, is arguably the bay area’s most successful worker-owned cooperative. It operates a large cheese shop on Shattuck Ave. with an adjoining pizza restaurant where a jazz band plays twice daily.

    Cheese Board worker owners receive $21 per hour plus coop dividends, full health care, dental and a retirement savings plan.  The coop attempts to pay fair wages to its workers, a fair price to its suppliers and fair prices to its customers.

    The Arizmendi Bakery in Emeryville is a spinoff from the Cheese Board, which helped set up the chain of five bakeries and lent them its recipes. Named after the Basque priest who founded the Mondragon cooperative, Arizmendi is governed by policy council, with two elected members from each bakery.

    “Our idea is to replicate this model, to saturate the bay are with new coops,” said Jabari Jones, one of the Arizmendi bakers. “We need to educate the public, to convert more jobs and industries into co-operatives, to create a critical mass.”

    Although there are only about 1,500 members in Northern California cooperatives, tough economic times and high success rates are spurring their rapid growth. “We are no longer considered just another alternative,” said Melissa Hoover, executive director of the San Francisco-based U.S. Federation of Worker Cooperatives. “We are now part of the mainstream economy—and we are growing.”

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