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They're owning this cooperation

Taking a cue from a Spanish hill town, the mayor of Richmond, Calif., is recognizing worker-owned co-ops as a possible path out of the poverty and unemployment that plague her city.

November 28, 2011|By Lee Romney, Los Angeles Times
  • Concetta Abraham, a member of the Liberty Ship Cafe co-op in Richmond, Calif., dances while testing recipes at St. Luke Methodist Church. The 76-year-old native of Italy provides much of the cooking magic for the co-op, whose seven owners were drawn together while taking a class on developing cooperatives at the Richmond library.
Concetta Abraham, a member of the Liberty Ship Cafe co-op in Richmond, Calif.,… (Dean Coppola, Bay Area Newspaper…)

Reporting from Richmond, Calif. — Where a hot dog stand now is the main lunchtime option for city workers in this distressed Bay Area town, soon they'll be able to choose from steel-cut oatmeal, goat cheese empanadas and white bean and kale stew, prepared in a mobile cafe. Its owners will share in the decision-making — and any profits.

Richmond Solar has trained needy residents to work as green-energy installers and now aims to transform some into bosses by forming a worker-owned cooperative.

The city's first bicycle shop has opened with similar dreams: Young men who have volunteered to learn the repair trade soon may be elevated to co-owners.

"I'm just gonna ride it out with everyone to get where we need to go," Mercedes Burnell, 19, said as he prepared to replace a crankshaft and pedals at Richmond SPOKES.

The flurry of democratic enterprise has been guided by Mayor Gayle McLaughlin, a former schoolteacher who visited Mondragon, Spain, and recognized a possible path out of the poverty and unemployment that plague her city.

The Basque hill town is dominated by Mondragon Corp., a web of cooperatives that employ 83,000 workers and together represent Spain's seventh-largest business. Co-op clusters based on Mondragon's model have emerged in Cleveland and the Bronx, N.Y., among other cities.

Richmond, with a 16% unemployment rate, hopes to follow suit.

The city's industrial roots date back more than a century, when it was home to the Santa Fe Railroad terminus and a Standard Oil refinery. World War II shipyards swelled the population to nearly its current 103,000. But Richmond has struggled since and is regularly listed among the nation's 25 most dangerous cities.

Since August, Bay Area co-op veteran Terry Baird — a burly man with a gray beard and a penchant for South African freedom songs — has been on the city payroll, helping to piece together cooperative ventures in Richmond's economically barren pockets.

Mondragon Corp. was created in 1956 and fine-tuned over half a century, McLaughlin said, "but you have to start somewhere. One of the prerequisites of starting a co-op is need, and that is something that we have in Richmond."

Demand matters too. Baird aims to start small, with food and service co-ops such as a plumber's collective that won't require hefty upfront investment. Then the city hopes to bring government and other big employers on board, setting up ventures to meet their buying needs.

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McLaughlin, a Green Party member who's been mayor since 2006, visited Mondragon last year and was dazzled by the scale of the worker-driven enterprises.

"My understanding of co-ops from the 1960s and 1970s was that they were small and interesting," said McLaughlin, who was immediately sold on the idea of replicating the formula in Richmond.

The Mondragon story began with a Catholic priest.

In 1943, Father Jose Maria Arizmendiarrieta — who had narrowly escaped death by firing squad during the Spanish Civil War — started a technical school for working-class boys. By 1956, graduates had helped form the first cooperative to make kerosene stoves. A cooperative bank followed in 1959.

The corporation, which reported a $242-million profit last year, now includes 255 industrial, retail and financial cooperatives, with others focusing on education and research. Manufacturing co-ops churn out metal-cutting tools, washing machines and bicycles. A retail co-op runs Spain's third-largest grocery chain. A Mondragon construction venture built Bilbao's Guggenheim Museum. About 85% of the corporation's employees are co-op members.

But the original edict of one-worker/one vote remains, through an elected general assembly with representatives from each cooperative. Recently, the assembly voted to cut everyone's pay rather than risk layoffs at any one co-op. The compensation of the highest-paid worker is capped at seven times that of the lowest. Some of the corporation's overall profits go toward offsetting losses at any individual enterprise. Workers also receive a share in the corporation, based on their contributions, every year, with more money flowing into interest-bearing accounts disbursed at retirement.

The U.S. has a history of cooperative movements, beginning with enterprises organized in the late 19th century by the Knights of Labor and highlighted by the burst of food co-ops and consumer buying clubs of the 1960s. Recent years have seen a resurgence.

"It's less counterculture utopian," said Melissa Hoover, executive director of the San Francisco-based U.S. Federation of Worker Owned Cooperatives, "and more engaged with people in the economy."

Some of the growth is sector-based: Green-cleaning ventures launched by immigrant women, for example, are common. But philanthropists and community developers increasingly have focused their attention on the co-op model as a way to revitalize urban areas.

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