Worker-Owned Cooperatives - A Resilient Model for Grassroots Economic Development
By Meche Sansores /

The persistently sky-high unemployment in the U.S. has clouded an equally problematic trend—deteriorating working conditions and diminishing pay for unskilled and low-skilled work. Home healthcare workers, childcare providers, and housekeepers are the backbone of our economy, but they receive low wages, practically no benefits, and face a dearth of opportunities to build assets and accumulate savings. In this economic climate, we must find ways to help disadvantaged individuals and families become self-sufficient.

One powerful, but underutilized approach is to build community-based cooperative businesses. This model delivers increased earnings, provides better benefits, and creates asset building opportunities for low-wage workers. What’s more, it is a model that has proven to be a workable solution during this challenging economic time because it creates the very economic activity that generates opportunity for workers.

At their core, worker co-ops are businesses that are (1) owned and often created by their workers, and (2) governed by democratic decision making. There are approximately 300 worker-owned cooperatives in the U.S. across a variety of industries, from grocery stores and daycare centers to manufacturing and tech companies.

Cooperatives distribute the surpluses of the business to the workers – otherwise known as co-op members – rather than inequitably diverting profits to executives and shareholders. Worker co-ops are also democratically controlled, meaning that co-op members generally set company policies, including what benefits are provided. This often translates to benefit packages that are well above industry standards.

Co-op membership provides a unique avenue for asset building for low-income individuals. In the U.S., most families build wealth by buying homes, investing in a business, or saving through employer-sponsored retirement accounts. But these types of investments are often out of reach for low-wage workers.

Co-owning a business can be a pathway out of poverty and a much more accessible asset building approach for low-wage workers, as co-op members can collectively share the responsibility of acquiring small business start up capital.

Women’s Action to Gain Economic Security (WAGES), the organization I lead, provides a compelling case for this approach. WAGES is a non-profit that builds cooperatively owned businesses to create healthy, dignified jobs for women. To date, WAGES has built five eco-friendly housecleaning businesses in the Bay Area, which bring in $3.2 million annually and provide healthy, dignified work for over 100 low-income immigrant women.

Co-op members are doubling and tripling their incomes after joining, which translates to changes at the personal and family levels that then ripple into communities. Co-op members are also taking English as a second language classes, sending their children to college, and becoming financially literate.

Members also have internal capital accounts that grow with their business. Last year, the median amount of this business asset for each member was nearly $3,500—a remarkable sum considering that each member invested a mere $400 in the business. In addition to these benefits, our co-op members have the opportunity to use interest free loans from the co-op, protecting them from predatory lenders and providing a critical safety net.

What is striking to me is how fiercely resilient our model has proven to be during these challenging economic times. All five WAGES co-ops have grown steadily in recent years. In fact, two of WAGES’ five co-ops were launched during the recession – one in 2009 and another in 2011 – despite the fact that the national small business failure rate increased by 40 percent during this timeframe, and California's was the worst in the country.

Perhaps we shouldn’t be surprised at this success. It was actually mass unemployment and widespread poverty in Spain’s Basque region during the 1950s that prompted the creation of the largest cooperative in the world, The Mondragon Cooperative Corporation, which now boasts 100,000 workers, and is located in a region that consistently has the lowest unemployment in that country.

What is the secret behind co-ops’ success? Many point to the mutually supportive environment and the collective pride of business ownership as contributors to co-ops’ remarkable survival rate, which a 2008 study suggested is twice as high as other enterprises over a ten-year period.

To be sure, cooperative development requires intensive training, resources, and skill building. WAGES has seen a burgeoning interest in cooperative development recently, and created a technical assistance guide to assist other groups around the country interested in building worker-owned co-ops. There are a host of other resources and ample opportunities for policy change to help facilitate the growth of co-ops.

As we inch slowly from the recession and lament the lack of dignified work for low-income individuals, policymakers and community organizers should take note of an up and coming model that is moving disadvantaged individuals above the poverty line.

To print a PDF version of this document, click here.

Meche Sansores is the executive director of Women’s Action to Gain Economic Security.

The views expressed in this commentary are those of the author or authors alone, and not those of Spotlight. Spotlight is a non-partisan initiative, and Spotlight’s commentary section includes diverse perspectives on poverty. If you have a question about a commentary, please don’t hesitate to contact us at

3.5 ·
What's Next
Trending Today
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 21,231 views today · Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months...
Dinosaur explains Trump policies better than Trump!
8 min · 12,944 views today · Donald Trump is actually the corporate triceratops, Mr. Richfield, from the 90's TV show sitcom, "Dinosaurs". 
No Moral Superpower: Arundhati Roy, Edward Snowden, and the Crimes of Empire
Jake Johnson · 7,282 views today · When Arundhati Roy was preparing, in 2014, for a trip to Moscow to meet Edward Snowden, she was troubled by two things. One of them was the fact that the meeting was arranged...
Noam Chomsky Has 'Never Seen Anything Like This'
Chris Hedges · 6,999 views today · Noam Chomsky is America’s greatest intellectual. His massive body of work, which includes nearly 100 books, has for decades deflated and exposed the lies of the power elite...
And After the Election, The Reaction
Ret Marut · 4,537 views today · Could there be any better illustration of the shortcomings of representative democracy than this year’s Presidential campaign? For months upon tiresome months, the whole world...
'The Climate of Fear Is Unacceptable' - Ken Loach on I, Daniel Blake
6 min · 3,692 views today · Ken Loach’s Palme d’Or-winning film I, Daniel Blake tells the story of a man who is denied disability benefit after a heart attack and who is then subsequently caught in a...
Men Loving Men
Bianca Vivion · 2,432 views today · When my father was seven he and his best friend Phil cut their index fingers open and placed them together to create a “blood pact” that they would always be brothers. To this...
Three Massive Mergers - Millions for One Bank and a Disaster for Food, Water, and Climate
Wenonah Hauter · 2,372 views today · In addition to advising on all three mega-mergers, Credit Suisse is playing a big role behind the scenes of the Dakota Access pipeline.
What Makes Call-Out Culture So Toxic
Asam Ahmad · 2,220 views today · Call-out culture refers to the tendency among progressives, radicals, activists, and community organizers to publicly name instances or patterns of oppressive behaviour and...
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 2,082 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
Social Geographer Shows How Much of You is Determined by Where You're From
3 min · 1,838 views today · The Professor of Geography examines social inequality and the geodemographics of the UK, using maps created by Oliver O'Brien (UCL, CASA) in 2012 and updated in 2015. You can...
Writers Tom Hayden and Naomi Klein Talk About Journalism and Activism
27 min · 1,556 views today · Author, Activist and Former California State Senator Tom Hayden talks in depth with the author of No Logo and The Shock Doctrine, Naomi Klein, about the state of the fourth...
A Beautiful Reflection on What It Means to Be Human
8 min · 1,282 views today · Hello! We are Oh Wonder, a musical duo from London. We believe that everyone is equal. We are all human. We all deserve the world. And we can build that equality by sharing...
Heartbreaking Animation Reveals Plight of Animals Under Threat of Extinction
3 min · 1,213 views today · This stunning and heartbreaking animation gives voice to animals under threat from human activity. Made as part of the Wildlife Conservation Film Festival, it features a...
Grow Heathrow: Residents Resisting Eviction Over 3rd Runway
4 min · 1,073 views today · On March 1st 2010 Transition Heathrow members swooped on an abandoned market garden site in Sipson; one of the villages to be completely tarmacked to make way for a third...
Speaking Out Against Australia's Unforgiving Refugee Policy
42 min · 1,069 views today · The Forgotten Children: More than a hundred child refugees are stuck in asylum limbo on the island of Nauru as a result of Australia's harsh and unsympathetic border policies...
How Big Banks Launder Money and Get Away With It
9 min · 875 views today · 'I wrote about how money laundering was actually done... they spiked it.' Parliamentary Candidate David Malone was a popular second choice in the UK Green Party leadership...
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 756 views today · This is easily the best comic strip ever made.  Pabl
Why I Didn't Vote Trump or Hillary
Joe Brewer · 720 views today ·   This is my ballot. It arrived in the mail where I live in Washington state — and I’ve already sent it back to the elections committee. Note how I didn’t vote for either...
The White Man in That Photo
Riccardo Gazzaniga · 560 views today · Sometimes photographs deceive. Take this one, for example. It represents John Carlos and Tommie Smith’s rebellious gesture the day they won medals for the 200 meters at the...
Load More
Like us on Facebook?
Worker-Owned Cooperatives - A Resilient Model for Grassroots Economic Development