Building Cooperative Businesses

For immigrant women in Boston, worker cooperatives provide an alternative to welfare.

MARYALICE GUILFORD

This article is from the September/October 2002 issue of Dollars and Sense: The Magazine of Economic Justice available at http://www.dollarsandsense.org/archives/2002/0902guilford.html


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This article is from the September/October 2002 issue of Dollars & Sense magazine.

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At the Boston-area Sagla Eritrean Restaurant & Catering Cooperative, Mehert Risom and Alemash Hailu dish up spicy lentils and warm injera, a flat bread, to lunchtime guests.

When business is good, that's good for Risom and Hailu. As members of the cooperative, the women will share in future profits. They also plan to pay themselves a living wage with benefits, and vote on major issues.

The restaurant is a new worker cooperative formed by Cooperative Economics for Women (CEW), an organization dedicated to empowering immigrant and refugee women of color through cooperative economic organization. Through membership in CEW coops, dozens of women have made the transition out of welfare and low-wage work. Thanks to CEW's capital support and technical expertise, women with no access to the assets needed to start businesses come to own and run their own democratic workplaces.

At the moment, CEW is focused on three ventures: Sagla; Apsara Fashions, a sewing cooperative of mostly Cambodian worker-members; and Morabeza Cleaning Community, a cleaning company owned and run by Haitian and Cape Verdean women. The restaurant and cleaning cooperatives are now fully functioning worker-owned businesses, incorporated on their own as separate entities (although each coop has a seat on the CEW board).

Besides starting and maintaining business cooperatives, CEW provides extensive member services, including ESL/basic literacy, legal assistance, and children's programs. CEW is also involved in advocacy, coalition building, leadership training, outreach activities, and organizing to address social and economic inequalities. It has accomplished all of this on a small annual budget of under $200,000.

This approach to women's economic development combines a cooperative model of income generation with popular education, literacy and skill building. In contrast to individualistic approaches to women's poverty (which assume that individuals are solely responsible for their own economic circumstances), CEW takes the group as the starting point. The organization assesses social conditions faced by its members, and addresses the systemic barriers to economic success they face as a group. As Sagla Eritrean Restaurant bustles with catering orders, and the other CEW coops grow, it is increasingly clear that this model points to a promising path of economic development—one that truly meets the needs of women and children.

The path was born of welfare reform. In the mid-1990s, the organization started some smaller-scale income-generating projects for women on welfare. The goal, then, was to help supplement welfare recipients' increasingly unreliable cash benefits with part-time work. Women participating in these projects soon made clear that they wanted full-time work, and work that would lead to greater self-reliance. In response to members' desires, CEW changed course, and came to focus on building full-fledged cooperative businesses.

Today the group faces several challenges, all of which are connected and require resources to overcome. Cooperative organizer Stacey Cordeiro sees the major challenge as one of increasing the organization's capacity to provide the support services and generate the equity capital these women need in order to start their own cooperative businesses. Startup costs range from $8,000 to $10,000, according to CEW lead organizer Rebecca Johnson. Because members have limited resources to invest, outside sources of capital are required to start up the businesses, provide training to members, and finance expansion. The good news, according to Cordeiro, is that "there are sources out there now for equity funding that weren't out there at the beginning when CEW first started."

Another challenge is creating businesses based on an equitable democratic structure with some degree of social responsibility in a highly competitive, market-oriented, profit-driven environment. Although the main goal of the coops is to employ the women at a living wage and benefits, each coop must also make a profit if it is to build a reserve or expand. The profits are put back into the business or shared out among the members.

CEW's cooperative business development differs from the corporate model in that it addresses non-economic needs—education, training, child care, legal assistance, and emotional and psychological support—that affect the ability of poorer women to become self-sufficient. These are not mere businesses, but also structures of personal and community support.

In light of these challenges, CEW has succeeded in turning women's lives around. Building on their own individual talents, members develop the capacity to earn higher wages while simultaneously increasing their self-esteem and self-confidence. Women also gain the associated benefits of flexible hours, child care, and education in their respective business areas. Cordeiro points out a secondary outcome: "Women who have participated in the past carry the leadership skills and knowledge they gained while with CEW and contribute those to the larger community."

Maryalice Guilford is publisher of Dollars & Sense.