Blog: Worker

How Co-ops Can Stop the Poverty Cycle

October 17, 2017

Cooperatives have proven their entrepreneurial value time and time again when inspired people join forces in the pursuit of happiness and success. Let’s travel back in time to the 1960s when, in the midst of the civil rights movement in Rehobeth, Alabama, a group of women pulled themselves out of abject poverty by forming a worker cooperative.

Imagine driving through a town when you notice brilliantly colored and patterned quilts hanging along a clothesline. How beautiful and picturesque to see the eye catching fabrics dancing in the wind. Father Francis X. Walter saw exactly that, and he believed these unique quilts could sell in the artistic world of New York City for a substantial amount of money. Sixty black craftswomen from Alabama took the initiative to form a worker-owned cooperative to retain the proceeds of their quilt sales. They formed the Freedom Quilting Bee cooperative and elected their first president, civil rights activist Estelle Witherspoon, on March 26, 1966. As Father Walter predicted, the quilts sold for anywhere between $15 to $100 in NYC markets. The money was life changing; the women used the income from quilt sales to fix the roofs on their houses and send their children to college.

Fast forward to today, when there are now more than 400 worker co-ops operating in 17 industries that generate $400 million in annual revenues (Source: NCBA CLUSA). The best part about these worker-co-ops is: they are 100% member-owned! All profits stay within the co-op and benefit the member-owners; not outside investors.

Jim Brown, in his TED Talk How to Stop Poverty: Start a Worker-Owned Cooperative, explains how worker-owned cooperatives, such as the Freedom Quilting Bee, have the power to stop the cycle of poverty.

In capitalist societies, ownership of a business is granted in exchange for capital, to which individuals with low incomes do not have access. However, in worker-owned cooperatives, ownership in the business is given in exchange for labor. If willing to work hard, anyone willing to take responsibility of membership – regardless of gender, social, racial, political, or religious affiliation – can become a member-owner of a worker co-op. In return, their hard work generates sustainable income. In this TED talk, Jim Brown shares inspirational stories which exemplify the power of the worker cooperative model and suggests that it is a tool with which the total eradication of poverty is possible!

 

For information and resources on worker cooperatives, visit the US Federation of Worker Cooperatives.