Coops in New Orleans


        [Contribution to the Reimagining Society Project hosted by ZCommunications]

On June 20-22, 2008, members of worker cooperatives and their supporters from around the
country visited New Orleans to hold our 3rd conference, "Democracy at Work," at Loyola
University. The worker cooperative movement, as well as the general cooperative movement,
brings innovative democratic economic development strategies to a city and region in obvious
need of new ideas and alternative strategies, particularly to better support and reinvigorate low-
income communities and communities of color. I have worked with residents/survivors who
want more information about viable alternative models of community-based economic
development. Because the Gulf Coast and New Orleans are areas in which the gaps between rich
and poor and Black and White are glaring and disturbing, there has been national and local
discussion of and action around alternative development strategies, and democratic and
sustainable principles and priorities for rebuilding. Ralph Nader, the Federation of Southern
Cooperatives/Land Assistance Fund, and the "Big Idea" project out of Canada all have actually
proposed using the cooperative economic model for business and housing development in New
Orleans and the Gulf Coast.  The Federation of Southern Cooperatives and the Common Ground
Collective are already using cooperative, community-based activities in their efforts to help
survivors and rebuild neighborhoods. However, wide public recognition is lacking, and there is
no coverage by traditional media of grassroots economic organizing, and in particular
cooperative economic development, for rebuilding New Orleans and the Gulf Coast. Moreover,
there are few resources allocated for cooperative economic development in the Gulf Coast or any
region in the United States. At the very least residents need more information about cooperative
economic development, alternative democratic community-based models of development, and
examples of cooperative economics among communities of color.
  
What viable models are there to address the issues and uphold the principles that have guided
innovative economic responses to market failure, poverty, and marginalization? Every group and
nationality of people across the globe have and continue to use economic cooperation as part of
their economic development program – sometimes officially and often unofficially. Cooperative
development helps to address economic underdevelopment and isolation. Many development
challenges lend themselves to cooperative solutions. Resident ownership and individual and
community entrepreneurship address issues of the export of capital and industry from cities, to
suburbs and overseas. Credit unions and pooling of capital help to address the lack of banking
services, redlining, and predatory lending in urban areas [I am just finishing an article on credit
unions as community assets and as necessary stable non-predatory community-based financial
institutions]. Employee ownership (and some Employee Stock Ownership Plans (ESOPS)) create
and save decent, meaningful jobs, and promote workplace democracy, income generation and
wealth accumulation. Many recent inner-city worker-owned cooperatives lead their industries in
providing living wages, often with health and vacation benefits, job stability and mobility,
training, and self-management. Cooperative home ownership and Community Land Trusts
address lack of affordable housing, rising property values, and abandoned properties as well as
increasing community control of land, and home ownership. Housing cooperatives expand home
or apartment ownership to more people, addressing both financing and maintenance issues. They
often build long-term affordability in otherwise speculative housing markets. Cooperative
ownership is growing in the provision of social services such as home health care, health care,
drug rehabilitation, childcare, as well as in fair trade, and green jobs and environmental
sustainability. 
 
Cooperative ownership also helps to address skills mismatches, lack of appropriate skills, and
poor quality of education in some communities because cooperatives have a strong education
mission and training record. Cooperatives build capacity among members, continuously educate
and train their members to fulfill the needed expertise, and increase members’ own growth and
contribution to the enterprise. Cooperatives also help to keep local resources and money
circulating (and re-circulating) within a community. Cooperatives often develop and survive as a
response to market failure and economic marginalization (see Fairbairn, et. al. 1991).
Cooperative economic development has been successful as an urban as well as a rural economic
development strategy to create jobs, increase incomes (and sometimes assets), and reduce
poverty around the world. Although cooperative models are not well known or well publicized,
the United nations and the International labor Organization have recently recognized the
potential of cooperative enterprises for economic development and poverty reduction (Birchall
2003; International Labour Conference 2002).
 
African Americans have a strong but often hidden history of economic cooperation. New Orleans
and the Mississippi Delta have played important roles in that history. The second largest
contingent (after New York City) of charter members of the Young Negroes’ Cooperative
League in the 1930s, for example, came from New Orleans. In 1886 the Colored Farmers’
Alliance and Cooperative Union established "exchanges" in New Orleans, Houston, Mobile,
Norfolk and Charleston, where members bought and sold low cost bulk items and borrowed
money (from the membership’s pooled savings). In addition, cooperative alternatives have been
pursued continuously by Black communities in the Delta – and continually thwarted by the
"plantation bloc."
 
There were cooperative and worker-owned businesses in New Orleans before the recent
catastrophe. GEO Newsletter editors, for example, reported on a gathering with several co-op
members in New Orleans in April 2003. This group included representatives from Invest
Construction, a construction cooperative whose members are public housing residents,
Cyberspace Central Computer Consultants (C4), Plan B Bicycle Co-op, and the Green Project, a
recycling cooperative. Many of the businesses and their members are working to re-establish
themselves in New Orleans, and to help develop more cooperatives. The Crescent City Farmers
Market in New Orleans had been an outlet for many of the Federation of Southern
Cooperatives/Land Assistance Fund’s Mississippi farm cooperatives. It was reopened in
November 2005 after being totaled in the aftermath of Hurricane Katrina. Its reopening helped
local farmers reestablish themselves. 
 
In addition, the cooperative movement has been very much involved in relief efforts and
rebuilding. Cooperatives from around the country (including credit unions and the Federation of
Southern Cooperative/Land Assistance Fund’s Indian Springs Farmer’s Association in
Mississippi, whose own facilities were damaged) donated produce, biodiesel fuel and other
supplies to New Orleans and the Gulf Coast. The Federation/LAF’s Assessment and Outreach
Team is providing emergency financial relief to hurricane survivors and coordinating disaster
relief training. In addition, credit unions in the region, and the national credit union federations
(National Federation of Community Development Credit Unions and Credit Union National
Association) have also contributed substantially to disaster relief and rebuilding efforts. 
 
African Americans have utilized cooperative ownership in good and bad times throughout U.S.
history [my forthcoming book on the subject chronicles these efforts]. After the Civil War, in
Baltimore, MD, for example, where African American caulkers were considered the best at that
craft, white caulkers felt threatened and tried to chase Black shipyard workers out of the state.
White carpenters boycotted shipyards with African American caulkers, and white mobs attacked
Black caulkers and stevedores on their way home. A group of prominent African Americans
along with Black stevedores and caulkers started their own cooperative shipyard to protect their
jobs and safety, and maintain their standard of living. According to W.E. B. Du Bois, the
Chesapeake Marine Railway and Dry Dock Company survived as an integrated work place for
18 years, and succeeded in integrating the all white unions at that time. 110 years later, in Los
Angeles when Black bricklayers suffered persistent discrimination and under-representation in
jobs and management, their union worked with the A. Philip Randolph Educational Fund and a
private employee-ownership development agency to help them establish their own worker-
owned construction company.
 
In 1919, in Memphis, the Citizens’ Co-operative Stores operated cooperative meat markets. They
raised more equity than expected, selling double the amount of the original shares they offered.
Members were able to buy shares in installments and no one could own more than ten shares. By
August 1919, five stores were in operation serving about 75,000 people. The members of the
local guilds associated with each store met monthly to study cooperatives and discuss any issues.
 
The Commercial Department of the Bluefield Colored Institute in Bluefield, West Virginia,
formed a student cooperative store probably in 1925, to sell supplies the students and school
needed and to give students business experience. After two years in business the cooperative
paid all its debts and owned its own equipment and inventories. The store also began to pay
dividends of ten percent on purchases made to its members. The student members voted to use
profits to pay for scholarships to the Secondary School and Junior College. Food from the
‘Hood, started in the 1990s in LA, is also a youth-owned cooperative business (selling salad
dressing) that saves student members’ earnings to use for scholarships to college.
 
The Young Negroes’ Co-operative League is an example of a cooperative federation. It was
founded in December 1930 by about 25-30 African American youth. Its goal was to form a
coalition of local cooperatives and buying clubs loosely affiliated in a network of affiliate
councils, By 1932 the League had formed councils in New York, Philadelphia, Monessen (PA),
Pittsburgh, Columbus (OH), Cleveland, Cincinnati, Phoenix, New Orleans, Columbia (SC),
Portsmouth (VA), and Washington, DC, with a total membership of 400.
 
The Freedom Quilting Bee, a handicraft cooperative in Alberta, AL, was established in 1966
because the women in share-cropping families in the area needed more, and a more stable,
income. The women began selling quilts and using other entrepreneurial strategies after many of
their families lost the plots they were sharecropping because of their Civil Rights activities
(registering to vote and attending speeches and rallies). The seed money for the cooperative
came from an initial sale of 100 quilts, sold for them in New York City by a sympathetic local
Episcopalian minister. The cooperative bought 23 acres in 1968 to build the sewing plant. They
also used the land to help member families who had been evicted from their farms. At a time
when the political climate severely reduced economic options for African Americans in the
south, through this cooperative members were able to augment their family’s income, save their
farms and land, and/or create alternative sustainable economic activity. At one point the
cooperative was the largest employer in the town with 150 members. By 1992 the cooperative
owned a day care center, 23 acres of land, a sewing factory; and operated an after school tutoring
program and a summer reading program. 
 
Toxic Soil Busters is a youth-owned and run soil abatement and lead poisoning education
business in Wooster, MA. Green Worker Cooperatives combine worker ownership and green
jobs in emerging environmental industries. Their first worker cooperative in the South Bronx,
NY, ReBuilders Source is a recycle, reuse building supplies warehouse.
 
All of these cooperative enterprises have many things in common. Members come from
marginalized communities and are not being served well or at all by prevailing market forces or
government agencies. They need to generate income and build assets, and need control over their
own economic lives and their communities in order to do so. They come together (often with the
help of a leader or community organization), study their circumstances, study the alternatives,
and pool their resources – talents and capital. They launch businesses that address their needs and
needs in their communities, and that keep them in control through democratic participation and
governance.
 
Given all the possible positive effects of cooperative ownership, and the variety of models for
how to initiate and sustain such development, cooperative economic development is a viable
revitalization strategy. The development plans for New Orleans and the Gulf Coast might better
meet all their goals – and better serve all the residents (and former residents) – if they add
cooperative development to the strategies they will be advocating and supporting. 
 
{Sections of this article are based on published and unpublished writings by Jessica Gordon
Nembhard, including an early version of "African-American Economic Solidarity: How co-ops
can be central to the rebuilding of New Orleans" (Dollars and Sense July/August 2006, pp. 24-
26) written with Ajowa Nzinga Ifateyo. In addition, sections of this presentation have appeared
in two other published articles by Jessica Gordon Nembhard: "Principles and Strategies for
Reconstruction: Models of African American Community-based Cooperative Economic
Development," Harvard Journal of African American Public Policy Vol. 12 (Summer 2006), p.
39-55, and "Cooperative Ownership and the Struggle for African American Economic
Empowerment." Humanity & Society Vol. 28, No. 3 (August 2004), p. 298-321.}

 

{Jessica Gordon Nembhard is a political economist and Associate Professor of Community
Justice and Social Economic Development in African American Studies, at John Jay College ,
City University of New York. She is also a Visiting Scholar at both the Centre for the Study of
Cooperatives, University of Saskatchewan (Canada), and at the Center on Race and Wealth,
Howard University Department of Economics (Master Teacher for the Summer Institute on Race
and Wealth). Gordon Nembhard is a member of Grassroots Economic Organizing Newsletter
and Collective (www.geo.coop); the Eastern Conference for Workplace Democracy
(www.east.usworker.coop); the US Federation of Worker Cooperatives (www.usworker.coop);
the Federation of Southern Cooperatives/Land Assistance Fund (www.federation.coop); the U.S.
Solidarity Economy Network (www.ussen.org); The Association of Cooperative Educators
(www.ace.coop); Organizing Neighborhood equity DC (www.onedconline.org), and the CEJJES
Institute (www.cejjesinstitute.org). Email: [email protected]}
 
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