Low-Income Workers Get Help Starting Co-ops and Small Businesses
Low-income workers in Seattle are getting another economic boost. Five months after the local government became the first in the country to gradually raise the minimum wage to $15—making it the highest in the country—the Federal government's Small Business Administration has funded a local business support group to help train disadvantaged Seattle workers to develop worker cooperatives and home-based or cottage businesses.
The SBA's PRIME program awarded $115,236 to the Center for Inclusive Entrepreneurship (CIE) at Pinchot University to help educate and train small business owners and to build community wealth. SBA's PRIME—Program for Investment in Micro-entrepreneurs—provides assistance to organizations that help low-income entrepreneurs who lack sufficient training and education to gain access to capital to establish and expand their small businesses. SBA calls them “micro-entrepreneurs.” The SBA’s PRIME program is also intended to facilitate cooperative development in the US.
The PRIME program will be accepting grant applications from September 29, 2014 to September 30, 2015. The Northwest Cooperative Development Center (NWCDC) in Olympia, WA, about an hour south of Seattle, will work with CIE to provide in-kind services and technical assistance, according to CIE Director Mike Skinner. NWCDC has 34 years experience developing cooperatives in Washington, Oregon, Idaho and Hawaii, though largely agricultural co-ops.
Diane Gasaway, executive director of NWCDC, says she is looking forward to the opportunity to work together with CIE to bring more urban worker cooperative development to the Pugent Sound area.
“We certainly have a mission match and our desire [is] to help the disenfranchised community through self-help and self-determination in a cooperative business model,” Gasaway said. “Ever since the 2007-2008 Great Recession co-ops have been on the forefront of people’s radar more than ever as a tool to regain financial independence.”
Nancy Porzio, district director for Seattle SBA, said the office loves working with CIE's Skinner because he has a passion for the work--especially microenterprises--has been doing it for awhile, and he delivers. “He works magic,” Porzio said. “Everything he touches turns to gold, as far as I’m concerned.”
Skinner, who describes himself as a "recovering corporate finance attorney," is being cautious.
"I under-promised and hope to over-deliver on this," said Skinner, who has also been described as a microenterprise activist.
"Our goal for this effort, the first of its kind in the area, at the end of the day ...[is to] see if we can get one new co-op up and running and/or one conversion of [a] business into a co-op or/and one worker co-op strengthened or expanded, " he said.
Skinner also plans to take advantage of Seattle's new cottage law which allows residents to produce and sell limited food products from their home kitchens. He also said that Seattle is the 8th largest fashion city, and he hopes to get workers to sew fashionable clothing and accessories locally, rather than outsourcing to China and India. This could lead to workers who make Ethiopian injera bread, jewelry, or clothing and accessories, and who are able to go into business for themselves
"There are about half a dozen ideas like that," Skinner said. "There is a high level of reception for things that work for the more disadvantaged and isolated communities that we work in. People will come together… and become more competitive by working together. "
Seattle, the largest city in the Pacific Northwest with a population of over 652,000, is known for its Green Economy and is a model for sustainable business practices. With a population that is estimated nearly 70% whites of European descent, 14% Asian, 8% blacks of African descent, 7% Latino or Hispanic, 1% Native American and 2% other, the city has been described as one with the most diverse zip codes in the country. The CIE grant will focus on Southeast Seattle where unemployment is double that of city, and where the per capita income is 60% of that of Seattle as a whole. The area covers seven neighborhoods with 40 ethnicities who speak 60 languages, according to the CIE technical proposal. The economic drivers of the city can also be diverse, ranging from those who believe in the common good to those who want to be the next Bill Gates.
While the city is home to the country’s largest and oldest consumer cooperatives such as food stores and retailers like Recreational Equipment, Inc (REI); Puget Sound Consumer Cooperative (PCC Natural Markets), a 53 year-old natural foods chain; and Group Health Cooperative, a 47 year-old health insurance and medical services group, there are only about six worker cooperatives in the coastal city. One of the most prominent is the Equal Exchange Cafe, a spin-off of Equal Exchange in West Bridgewater, Massachusetts, which pioneered fair-trade coffee, and is one of the country's most financially successful worker cooperatives. The city is also home to a 30-year old cooperative, New Seattle Massage, and a newly converted co-op: The Patty Pan Cooperative, a farmers' market concession and neighborhood event space.
Patty Pan founder Devra Gartenstein welcomed the news of the Small Business Administration grant. “I’m excited to hear about the Center for Innovative Entrepreneurship grant,” she said. “Not only does it indicate that SBA lenders are growing more accustomed to the idea of worker cooperatives, it also has the potential to generate a multiplier effect, allowing more cooperatives to expand through traditional as well as nontraditional financing.”
Webster Walker is president of SLICE/Northwest Cooperative Alliance, a group started to promote a cooperative economy dedicated to social justice and ecological accountability. SLICE is an acronym for Strengthening Local Independent Coops Everywhere. Webster said the “richness” or economic growth of the city can give the illusion that things are good for everyone."There is so much money in this town, that there a sense that Seattle is booming,” he said. But the rising tide resulted in gentrification and economic hard times that has chased many working people out of the city, he said. "There are a lot of boats that didn’t get lifted."
Many of Seattle's residents don't know about cooperatives as an economic option. Walker says he is hoping that CIE’s work will help educate people about worker co-ops and other economic alternatives which could be especially beneficial for low-income residents. "One of the main reasons that people start a co-op is because they don’t get their needs met in the traditional way," said Walker. "In worker co-ops, it’s a need for a job. By pooling money they are able to start a business.”
Webster believes that one of the main obstacles to more worker cooperative development is lack of information about them, including among city councilpersons. He said the city needs a “one-stop shop” where people can go to learn about and develop cooperatives. Such a center could educate local lawmakers on why cooperatives could be a good alternative investment for the city. Seattle could follow the lead of New York City, which in May allocated $1.2 million for worker cooperative development.
Skinner's CIE hopes to tackle the education issue with a series of workshops introducing low income communities to worker cooperatives and even ways that cottage industries can work together cooperatively. Once he gets people who are interested and who want more information, a co-op academy will be established for more detailed and serious study and training. After several weeks, those interested workers will be trained in the skills and governance to operate a worker cooperative—a business owned and controlled by the workers.
After 15 years as a finance attorney, Skinner said he has helped 40 Mayan women in the Western highlands of Guatemala develop a business using micro-loans, and workers in Nicaragua to develop a self-help bank. In 2008 he organized StartZone, a micro-entrepreneurship development program at Highline Community College in Seattle, to assist people with disabilities, immigrants with little English language skills, women and people of color in Southwest King County to start businesses by providing “culturally relevant” training, technical assistance and other support. The program reached 1000 people, resulted in 125 businesses and created 150 new jobs, according to CIE’s PRIME proposal.
Skinner helped to start the worker cooperative Green Cleaning Alliance and is hoping to strengthen its development, as well as to help start a Native American artisan cooperative through the Chief Seattle Club, which helps to inspire and nurture Native Americans.
"Specifically, what I am hoping the most is that through worker cooperatives and other types of solid mutual assistance models people in under-served communit[ies], working together, can cooperate and build community wealth that's rooted in the community and share in that wealth. And I think worker cooperatives are particularly well-suited for that."
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Ajowa Nzinga Ifateyo (2014). Co-ops Get a Boost in Seattle: Low-Income Workers Get Help Starting Co-ops and Small Businesses. Grassroots Economic Organizing (GEO). https://geo.coop/story/co-ops-get-boost-seattle