Are Co-ops the Solution to Occupy Wall Street Woes?
Alternative business model called mechanism for democratizing the economy
It's a business model in British Columbia that controls more than $10 billion in assets, employs 13,000 people and returns all profits to members. The model governs enterprises in banking, housing, retail and health care. Fully one-third of British Columbians are members in at least one of the 700 operations operating in this model: the co-operative.
Doug Smith (behind) and Mark Parlett stock the produce section of the East End Food Co-op on Commercial Drive on Friday. The store's business model is that of a consumer co-op that is open to all shoppers, but provides specific benefits such as discounts to members. (Photograph by: Ward Perrin, PNG, Vancouver Sun) For John Restakis, executive director of the B.C. Co-operative Association, co-ops are a mechanism for democratizing the economy, something the folks participating in Occupy Wall Street or Occupy Vancouver could turn to as a solution to their grievances.
"The whole point of Occupy Wall Street is reacting against corporate structure and the fact that people have no control over the economy is what's at the heart of it," Restakis said. "Co-ops are a concrete way to address that."
Co-op Week in B.C. runs from today until Sunday and the United Nations has declared 2012 the international year of the co-operative to raise public awareness of this alternative business model and its contributions to poverty reduction and job creation.
"Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility," UN SecretaryGeneral Ban Ki-moon said on the UN website.
Anyone can start a co-op and any type of business could potentially be established as one.
Co-ops really do come in all shapes and sizes. Some, like housing co-ops, provide lowercost housing to their members through partnership with the government, which provides low-cost mortgages and sometimes rent subsidies.
Others, like credit unions, return their profits to the community in the form of grants or modest dividends to their members. Still others are owned by their employees, and still others are large, for-profit food growers such as Ocean Spray, Welch's or Sunkist.
Some are consumer co-ops like the East End Food Co-op, which is open to all shoppers, but provides specific benefits such as discounts to members.
All co-ops require a share purchase to become a member, all of them have a board of directors and must hold an annual general meeting, and the members always decide what to do with the profits.
Vancity and Mountain Equipment Co-op are two of B.C.'s largest co-ops. Vancity, Canada's largest credit union, has 417,000 members and boasts $15 billion in member assets. The credit union returns 30 per cent of profits to members or the community, where a bank owned by shareholders might return one or two per cent to the community, Tamara Vrooman, Vancity chief executive said.
"When I go and get service at a publicly traded company, I know that I'm buying a service, but the benefit of that service ultimately is accruing to someone else - to a shareholder," Vrooman said. "The benefits for our members as customers and the benefits for our members as owners are the same, and that allows us to be more flexible, it allows us to put more money back into the community more quickly and it allows us to be more responsive to individual members' needs."
Mountain Equipment Co-op is a consumer co-operative, celebrating its fortieth birthday this year. The business has $261 million in annual sales and has 3.3 million members.
Restakis says co-ops are often on the vanguard of new ideas, citing the local, organic food movement and alternative energy as two areas where coops have led the way.
"The co-op model is pioneering in some sectors; it's leading the field," Restakis said. "Co-ops are sort of like antennae where people actually get together to create a service or product that's not currently available."
- 246 reads
Membership in Co-operative Businesses Reaches 1 Billion
FOR IMMEDIATE RELEASE
February 22, 2012
10:20 AM
CONTACT: Worldwatch Institute
http://www.worldwatch.org/
Supriya Kumar, skumar@worldwatch.org, (+1) 202-452-1999, ext: 510
Membership in Co-operative Businesses Reaches 1 Billion
Co-ops offer democratic alternative to shareholder-owned businesses.
WASHINGTON - February 22 - The United Nations has designated 2012 as the International Year of Cooperatives, providing a great opportunity to raise the profile of an important organizational tool for spreading human rights and equality worldwide. Membership in co-operative businesses has grown to 1 billion people across 96 countries, according to new research published by the Worldwatch Institute for its Vital Signs Online publication.
Co-operatives, or co-ops, are a type of business characterized by democratic ownership and governance. They offer an alternative to the shareholder model of business ownership. Co-ops are governed by their members, who typically invest in the co-operative and have an ownership stake in it, as well as a voice in how the firm is run. Decisions are often made on a one-member, one-vote basis, so in many societies, co-ops provide a much-needed example of democratic governance amid otherwise inequitable conditions.
Unlike more conventional businesses, many co-ops do not struggle financially, because of their emphasis on democratic governance. In 2008, the world's 300 largest co-ops generated revenues of more than US $1.6 trillion. "Co-operatives are low-profile but powerful economic actors," said report author Gary Gardner, a Worldwatch Senior Fellow. "If these businesses were a national economy, they would rank ninth in the world----ahead of the economy of Spain."
Members of co-ops can use their collective power to fight for their common economic, social, or cultural interests: for example, members of a worker co-op might set working-hour limits and wage rates, while members of a financial co-op can access savings, loans, and other financial services that commercial banks might deny them. "Co-operatives can clearly play a key role in improving the quality of life of their members, particularly in countries where official protections for workers' or consumers' rights are not enforced," said Worldwatch President Robert Engelman.
In industrialized countries, consumer co-ops vastly outnumber other types of co-ops; 92 percent of co-ops in the United States are consumer co-ops. But globally, nearly one-third (29 percent) of the largest 300 co-ops are agricultural. This could mean that farmers in a community share the use of tools and machinery to save on overhead costs, or that they use their collective strength to negotiate higher prices for their goods at market.
In the financial sector, co-op businesses are valuable because they are a major driver of rural development, providing economic opportunities to the poorest sectors of many economies.Some 45 percent of the branches of financial co-ops are located in rural areas, for example, compared with 26 percent of branches of commercial banks. A 2010 World Bank report found that credit union branches account for 23 percent of bank branches worldwide and serve 870 million people, making them the second-largest financial services network in the world.
Further highlights from the study:
An estimated 7 percent of Africans belong to a co-operative, and their numbers are growing rapidly. The number of co-ops registered in Uganda, for example, grew 13-fold between 1995 and 2008----from 554 to nearly 7,500. Savings and credit co-operatives in particular are thriving in Africa.
Co-ops can generate a meaningful share of economic output: 21 percent in Finland, 17.5 percent in New Zealand, 16.4 percent in Switzerland, and 13 percent in Sweden.
In some countries, a sizable share of the population----up to 70 percent in Ireland----belongs to a co-operative of one sort or another.
###
The Worldwatch Institute is an independent research organization recognized by opinion leaders around the world for its accessible, fact-based analysis of critical global issues. Its mission is to generate and promote insights and ideas that empower decision makers to build an ecologically sustainable society that meets human needs.
Worldwatch Institute Links:
http://www.worldwatch.org/
Post new comment