Bank-Nonprofit Alliance Launches Worker Co-op Initiative in Miami
November 27, 2018; Miami Herald
In an op-ed in the Miami Herald, Gretchen Beesing, CEO of Catalyst Miami, a 22-year-old human service nonprofit, and Maria Escorcia, vice president of global philanthropy for JPMorgan Chase, announced their intent to join forces “to pilot a new program to support development of employee-owned businesses in Miami-Dade County.”
The pilot, they add, “will be JPMorgan Chase’s first investment in worker-owned enterprises in Miami and Catalyst Miami’s first foray into cooperatives as a strategy to create economic opportunity for more Miamians.”
Beesing and Escorcia note that while US worker co-op numbers remain small, worker co-ops are more prevalent in other countries, illustrating the promise of the approach. For instance, Italy, they note, is home to over 25,000 worker cooperatives.
That said, the poverty data they cite make clear the scale of the challenge. Beesing and Escorcia note that a 2017 United Way report found that 61 percent of Miami-Dade households either are in poverty or fit the so-called ALICE (Asset Limited, Income Constrained, Employed) designation. ALICE households earn above-poverty-line incomes, but still “cannot consistently afford the basics of housing, food, healthcare, child care, and transportation.” A survey conducted this year by the nonprofit Prosperity Nownoted that in terms of residents’ financial health and stability, Miami placed 62nd of 64 cities.
Incomes levels in Miami-Dade County are low. A 2013 study found that in median household income, Miami ranked 242nd out of 263 counties of 250,000 people or more. That year, median household income was $41,913. For Black families, it was even lower at $32,044; for Latinx families, it was $39,674.
In making the case for worker co-ops, Beesing and Escorcia write that:
Given Miami’s challenges, the proven benefits of co-ops shouldn’t be ignored. In a typical worker cooperative, each worker owns one share, with all shares owned by the workers. Recent evidence shows that, when compared to conventional businesses, this democratized management model offers higher wages, improved job stability (worker-owners are up to 75 percent less likely to be laid off), and roughly double the retirement savings. Worker co-ops also keep up to three times as much wealth circulating locally, increasing communities’ political and economic capital, and thus helping more people share in the benefits of economic growth. Immigrants, often hampered in the accumulation of assets because of the lack of savings and credit access, can also benefit. In addition, co-ops empower workers to address local needs, such as time off for a hurricane.
The development of worker cooperatives in Miami-Dade, the authors note, forms part of a broader economic development effort called “Communities Building Resilience.” Through the initiative, Beesing and Escorcia explain, “Catalyst will bring its financial capability coaching services and products, which include assistance with health-insurance enrollment and more, to where people live and work via neighborhood-based resilience hubs in five Miami-Dade communities.” In the past year, Catalyst health care navigators helped over 3,800 people obtain health insurance, as well as assisting 1,270 with free tax preparation, providing financial education to 1,770, and helping nearly 3,000 claim federal benefits.
While the initiative has only just launched, Catalyst’s decision to develop worker cooperatives was not sudden. A study two years ago from Florida International University recommended the creation of three social enterprise incubators and accelerators. The report also mentioned that Health Foundation South Florida had initiated a program of supporting employee-owned cooperatives.
This year, Miami—along with Durham, North Carolina; Atlanta; and Philadelphia—became one of four cities participating in the first year of an education and training program co-managed by the National League of Cities and the Democracy at Work Institute called the Shared Equity in Economic Development (SEED) Fellowship. SEED works with city-nonprofit teams “to build equitable economies using democratic business ownership through a year-long program of leadership development, peer-to-peer learning, and strategy design support.”—Steve Dubb