When Workers and Consumers Share Ownership, Everyone Wins

By Posted in - Cooperatives on January 12th, 2016 0 Comments

There’s some big news out of Seattle. Not only are two consumer-owned cooperatives in the area merging, they’re also making workers equal owners of their co-op. According to the Puget Sound Business Journal:

Seattle’s Central Co-op will become the first grocery store in the country to shift from an entirely member-owned store to what’s called a “solidarity co-op,” where members and employees own equal shares of the business.

On Monday, the Capitol Hill co-op will make a variety of major changes to its business, including the solidarity shift. Employees will own 50 percent of Central Co-op and members will own the other 50 percent after the shift. Central Co-op is already a one-person, one-vote co-op.

Tacoma Co-op will merge with Central Co-op as of Monday as well.

As a result, all of Tacoma Co-op’s employees who work more than 28 hours per week will qualify for health benefits through the company. Many of them will also get a raise…

Being a nonprofit co-op that pays its employees the highest starting wage for grocery workers in the state – $15.36 an hour with a cost of living increase that will raise that to nearly $16 an hour – is part of the company’s growth plan, he said.

“We’ve been more profitable this year with the higher wages than we were with lower wages,” Arnett said.

Add to that the company’s new employee ownership program – which 90 percent of members voted in favor of – and Central Co-op should be able to recruit and retain the best talent in the industry. Grocery stores aren’t known for their wide margins, and that’s even more of an issue for small stores like Central Co-op.

This is an amazing development, because it’s better for the business, the community, the people, and the economy.

However, while this might be a first of its kind transition in the country, consumer and worker-owned hybrid cooperatives have actually existed in the United States for some time. According to the Cooperative Development Institute:

southernvillage

One model that has slowly been gaining traction in the co-op movement as a whole, and also specifically in the food co-op movement, is the idea of a hybrid cooperative model. (Or, more precisely, a multi-stakeholder cooperative.) In this model, there are more than one cooperative ownership classes – meaning the membership isn’t just workers or producers or consumers, etc.

In the food co-op movement, this has primarily (but not exclusively) centered around having both consumers and workers as the owners (another growing trend is producers teaming up with consumers, as in the Marsh River Co-op in Brooks, ME). While both the consumers and the workers are the owners of the co-op, they also elect different members to the board in order to represent their specific interests. Perhaps one of the most well known hybrid food co-ops in the US is the Weaver Street Market co-op in North Carolina.

According to their website:

“A seven-member Board of Directors governs Weaver Street Market. Four of the directors are directly elected by the two owner classes, workers and consumers (2 positions each), and two positions are appointed by the board itself to fill the need for particular skills or knowledge. The General Manager holds the seventh position.

The board is directly accountable to the consumer and worker owners for the activities and accomplishments of the store…  all owners of the Co-op are welcome to attend as observers.”

One important thing to note is that while the workers are owners and have governance rights at Weaver Street, their management structure often mirrors the typical consumer co-op model.

Since 1988, Weaver Street has grown to three store fronts. Now that’s successful democracy in action!

We hope to see more transitions like this!

More about cooperatives:

Featured image credit: Central Co-op’s Facebook page.

Comments are closed.