In California, Berkeley City Council Votes Unanimously to Support Worker Co-ops

Pressure Gauge / William Warby

March 6, 2019; East Bay Express

In Berkeley, California, a city of 122,000 that is home to the state’s flagship university campus, “City Council voted unanimously on February 26th to include co-ops in the city’s small-business revolving loan fund; give co-ops, along with women- and minority-owned businesses, preference for city contracts; and provide ongoing technical assistance to help existing small businesses convert to worker cooperatives,” reports Jean Tepperman in the East Bay Express.

The specifics of the legislation are modest, but the measure marks the largest city government support received by worker co-ops in California to date. According to the staff report presented to the council, a $100,000 study is in the works to facilitate worker co-op bidding on city contracts. Additionally, a revolving loan fund, seeded with $100,000-$250,000 in city funds, is anticipated.

Sarah Stephens, a staff attorney at the nonprofit Sustainable Economies Law Center (SELC) added, “Berkeley is among the first US cities to earmark funding specifically to help local businesses convert to democratic worker ownership. Berkeley is also the first city to commit to enacting a procurement incentive for worker cooperatives and tailoring its revolving loan fund to explicitly target worker cooperatives and businesses converting to cooperative ownership.” SELC, in its press release, adds that the resolution “also committed the City to funding three years of technical assistance and support to local worker cooperatives and co-op conversions.”

Mayor Jesse Arreguin was effusive in his support of worker co-ops. “We have a long history of encouraging co-ops—especially now that wealth is being concentrated at the very top,” he said. He predicted that Berkeley’s support for worker co-ops will become “a model for the rest of the Bay Area and the country.”

The San Francisco Bay Area has long been a hub of worker co-op activity, but beyond resolutions of support, legislative victories have been rare. A 2016 report coauthored by Melissa Hoover, who directs the nonprofit Democracy at Work Institute, and Hilary Abell, cofounder of the nonprofit Project Equity (which helps firms convert to employee ownership), noted:

The Bay Area has the most worker cooperatives of any metropolitan area in the United States, and many are several decades old. Almost one-third of the largest worker co-ops (with more than 50 employees) in the country are here…Some of the older co-ops have spun off new cooperatives, providing technical assistance and financing. There are also several pioneering worker co-op developers, a local network of worker co-ops, and a healthy appetite for innovation and scale.

And yet, until now, policy gains in the Bay Area for worker co-ops have been scant. By contrast, New York City—which has seen worker co-op numbers rise from a dozen to over 80 in a few years—now provides $3.8 million a year for worker co-op technical assistance, while Madison, Wisconsin allocates $600,000 a year to support co-op development, with half dedicated to technical assistance and half for loan financing. A scan of worker co-op support policies conducted for the city of Austin, Texas, in 2016 also cited efforts under way in Burlington, Vermont; Cleveland, Ohio; Denver, Colorado; and Minneapolis, Minnesota.

Oakland, California was cited in that report, but only for its general resolution of support. The nearby city of Richmond once allocated a modest $50,000, funded by an anonymous donation, to support a tiny loan fund for worker co-op development.

In their 2016 report, Hoover and Abell called attention to the disparity and asked: “How can Bay Area cooperative developers leverage the expertise and capital of their thriving worker cooperative community to support advocacy, policy initiatives, and connection-to-market strategies?”

Now, perhaps Berkeley’s vote could signal the start of a broader shift. Even in Berkeley, however, it was not easy. Tepperman notes that three years passed between an initial resolution of support and last month’s legislation.

Now attention may pass to neighboring—and with 425,000 residents, significantly larger— Oakland, where, Tepperman explains, “support for worker co-ops has been stalled for more than two years.” Yassi Eskandari-Qajar, Policy Director at SELC, indicated that worker co-ops in Oakland had achieved some small policy gains, such as being included in the city’s 2018-2020 economic development strategy. Perhaps the example from nearby Berkeley will be just the impetus needed to get Oakland to follow suit and increase its support.—Steve Dubb