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Community Wealth Building: Worker Cooperatives and Anchor Institutions

December 28, 2016 6:29 PM | TLC Monadnock (Administrator)

Originally Published in the Monadnock Shopper News

Despite its current economic woes, my hometown of Rochester, NY inspires me.   The city is embracing an innovative way of growing its local economy through employee ownership and local procurement.

To give you some context around the current economic state of Rochester: It holds the national record for households earning less than $12,000 a year (that’s half the federal poverty rate) and half of all its children live below the poverty level.  This concentration of poverty has held steady over the past decade, and leaders are seeking a more sustainable and system-wide approach to reversing these deplorable trends.

From Poverty to Prosperity

The City of Rochester hired The Democracy Collaborative, a community-wealth building organization, to measure the potential for creating a “community-owned, cooperative business development corporation.”  This corporation would serve as a support system for employee-owned cooperative businesses based in high-poverty areas of Rochester and tied to the needs of “anchor” institutions.

Anchor Institutions

Anchor institutions are large nonprofits that, once established, usually stay in one place -- think of hospitals, universities and government entities.  By connecting the goods and services offered by locally owned businesses to the needs of anchor institutions, both the individual businesses and the entire local economy benefit.  For example, The Cleveland Model in Ohio started an employee-owned “green” laundry service in 2008 to meet the needs of local hospitals: Evergreen Cooperative Laundry.

Community Wealth Building

The Democracy Collaborative’s approach to economic development focuses on seven drivers of community wealth building:

  1. Place: Build upon the assets already found in a community.
  2. Ownership: Leverage cooperative business models.
  3. Multipliers: Promote spending dollars at locally owned businesses to keep money recirculating longer in the local economy.
  4. Collaboration: Involve many types of players to participate.
  5. Inclusion: Make sure the economy works for all.
  6. Workforce: Develop training for those with the highest barriers to employment.
  7. System: Create an ecosystem of support to sustain these efforts.

Learn more about the Democracy Collaborative.

Rochester’s next steps include developing some intriguing business ideas -- ideas transferable to the needs of our Monadnock Region institutions -- such as a local food processing facility, workforce transportation provider (like a vanpool/shuttle service) and an energy-efficiency/green construction company. 

"As Rochester experiences its rebirth, it is imperative that there is a place for everyone in the new economy," Mayor of Rochester Lovely A. Warren said. "By working with the Democracy Collaborative and other local partners, we can build community wealth by creating jobs in our neighborhoods. In doing so, we'll also make our streets safer and more vibrant, and provide for better educational opportunities."

Read more about Rochester’s efforts: cityofrochester.gov/innovation.

Instead of establishing businesses like these one at a time, could the Monadnock Region -- or all of Northern New England as a whole -- create our own Cooperative Business Development Corporation to develop, promote and support employee-owned businesses?  I’m inspired to explore this question -- how about you?

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