cooperative development from the grassroots

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Upcoming workshops on cooperative business

The City of Boston has launched a Worker Cooperative Initiative in concert with Mayor Walsh’s efforts to expand support for small businesses and entrepreneurs, and create opportunities for economic mobility for every Bostonian.

You will learn about selling businesses to employees, different types of employee ownership, and improving business by engaging workers from the Local Enterprise Assistance Fund (LEAF), Boston Center for Community Ownership, and the ICA Group.

This event is presented by Mayor Martin J. Walsh, the Mayor’s Office of Economic Development, the Greater Boston Chamber of Commerce, Women Entrepreneurs Boston, and the Roxbury Innovation Center.

Information on May 31 Workshop here!

Information on June 22 Workshop here!

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Boston City Council Hearing on Cooperatives

City Council Hearing

We’re very excited that the City of Boston, from the Mayor’s office to the City Council, is getting fired up about cooperatives.  Today is the City Council’s hearing on co-ops, and we will be there giving testimony on the economic impact of cooperatives to our city.  If you’d like to read more, check out our new resource, The Case for Cooperatives as a Local Economic Development Strategy.  It has links to all the most recent research from the US and abroad.

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Worker-Owned Cooperatives Are Larger Than Conventional Firms

In “What Do We Really Know About Worker Co-operatives?“, Virginie Pérotin writes,

“Perhaps the most common received idea about worker co-operatives is that they must be small. It is often thought worker co-operatives must be financially constrained, and a small size is sometimes regarded as a condition for workplace democracy to function… People will also commonly remark that very large worker co-operatives are extremely rare…. What is not widely understood is that most firms actually are very small.” (p.6)

Pérotin cites research studies from Italy, the US, Spain, France, and Uruguay, which all indicate that, on the whole, worker-owned cooperatives tend to be slightly larger than conventional firms (p. 6-9).

In the US, the best estimate of the size distribution of cooperatives comes from the Democracy at Work Institute (DAWI) . Their 2013 survey of US worker-owned cooperatives shows a size distribution consistent with Pérotin’s research: on the whole, US worker co-ops seem to be somewhat larger than other firms:

percent-of-firms-by-size-class-2013-1

Source Data: 2013 DAWI survey of cooperatives (n=117); US Bureau of Labor Statistics, National Business Employment Dynamics Data by Firm Size Class, Table G. Distribution of private sector firms by size class

Now, by definition, a worker cooperative has three or more employees.  Any fewer, and the business would be considered a partnership or sole proprietorship.  Since the US economy, like most economies, is dominated by small firms, especially sole proprietors with no employees, perhaps we should exclude the smallest firms from our analysis, to see what happens when we take away both the smallest co-ops and the smallest conventional firms:

percent-of-firms-by-size-class-2013-excluding-under-10-employees

Source Data: 2013 DAWI survey of cooperatives (n=117); US Bureau of Labor Statistics, National Business Employment Dynamics Data by Firm Size Class, Table G. Distribution of private sector firms by size class

 

Excluding firms with 10 or fewer employees, the distribution of businesses by size looks very similar, whether the business is a worker co-op or conventional firm.  DAWI’s sample size of 117 firms is quite small, of course, although it is an impressively large sample, considering that there were only 256 worker co-ops in the US at the time of this survey, according to their analysis.

While this quick analysis doesn’t constitute the same type of rigorous academic research cited by Pérotin, it also doesn’t contradict the finding that, in the US and worldwide, worker cooperatives are by no means smaller firms than conventional businesses – if anything the data suggest they may consistently be larger.

 

References:

Pérotin, Virginie “What Do We Really Know About Worker Co-operatives?”
http://www.uk.coop/sites/default/files/uploads/attachments/worker_co-op_report.pdf

Democracy at Work Institute, “US Worker Cooperatives: A State of the Sector”
http://institute.coop/sites/default/files/resources/State_of_the_sector_0.pdf

US Bureau of Labor Statistics, National Business Employment Dynamics Data by Firm Size Class, Table G. Distribution of private sector firms by size class
http://www.bls.gov/web/cewbd/table_g.txt

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