How can public policy support co-ops and a solidarity economy? At a virtual conference sponsored by the Institute of Cooperativism at the University of Puerto Rico, held on May 28th in San Juan, participants from New York City; Seville, Spain (Andalusia); Montréal, Canada (Quebec); and Puerto Rico addressed that question.
Puerto Rico has a long history of supporting cooperatives. The Institute itself dates from 1953. Puerto Rico is also home to the 55-year-old Seguros Múltiples cooperative, a leading insurance company, which Dun & Bradstreet estimates earns $137 million in annual revenue.
In the wake of bankruptcy, Hurricane Maria, and now COVID-19, community-based economic approaches have gained new attention. This year, an effort in Puerto Rico to pass worker cooperative legislation fell short. But efforts in this direction continue.
New York City Deputy Mayor J. Philip Thompson kicked off the proceedings. The home of Wall Street might seem an odd place to begin, and Thompson himself noted that “Puerto Rico is a lot more advanced than New York City in thinking about cooperative strategies.”
Still, the Big Apple, as NPQ has covered, has been a US leader in supporting worker cooperatives, which Thompson’s office has supported. In his remarks, Thompson noted that support for employee ownership and cooperatives is driven by the failure of conventional approaches. As Thompson related, “Since 1968, there have been over 10,000 African Americans elected to various levels of government in the US, but the median net wealth has actually decreased by eight percent since 1968. We have a lot more people elected to offices, but economically things got worse. We even had a Black president. Things got worse.”
As a result, Thompson says, “We believe something has to be done. We need to think out of the box.” Thompson advised changing the culture first. Policy change, Thompson noted, “starts with helping people imagine. Without new imagination you can’t have new policy. We sent staff from city hall to Mondragón, Spain to better understand the policies in the Basque country to accelerate innovation and inclusive ownership.” The Mondragón cooperatives are, as NPQ noted earlier this year, a network of 96 worker co-op businesses that employs over 81,000 people.
As for policy, one benefit of employee ownership is it can help retain existing businesses. “We are using the fact that many owners are nearing retirement as a springboard or trampoline,” Thompson says, adding, “We launched a communications campaign last December. We have reached tens of thousands of businesses so far.”
Nonetheless, as Thompson acknowledges, New York City is at an early stage in its co-op development, with at most a few thousand worker-owners in a city of over eight million people. Two other speakers—one from Montréal and the other from Seville—both spoke about decades-long efforts to build support for community ownership.
Béatrice Alain directs Le Chantier de L’Économie Sociale —the word “chantier” literally means construction site. Over the past decades, the center has sought to construct a broad sector of the economy that prioritizes social solidarity. Social economy organizing in Quebec really took off in the mid-1990s. A 2013 provincial social economy law now provides formal backing. With a population similar to New York City, Alain estimates that the social and solidarity economy in Quebec includes about 11,200 businesses that employ roughly 220,000 people.
That said, many challenges remain, not least of which is limited recognition from the Canadian federal government. One important policy achievement has been provincial support for specialized bank-like institutions that help capitalize social economy businesses. These businesses have also made major gains in childcare and homecare. Quebec’s system of childcare provides deep subsidies to nonprofit, often multi-stakeholder cooperatives (known as “solidarity co-ops” in Quebec). An April 2021 Bloomberg article noted that childcare’s cost in Quebec is set at less than CAN$9 a day. The article adds, “Studies have found that the province’s low-fee subsidized program not only dramatically boosts mothers’ participation in the workforce, it more than pays for itself through the increased tax revenue generated from more women working.”
Dalia Borge, who is Latin American director of the Escuela de Economía Social y Solidaria (School for the Social and Solidarity Economy) in Seville, Andalusia, Spain, tells a similar story. As it happens, Andalusia is also home to a little over eight million people. In Andalusia, social pacts involving labor, business, and the Andalusian government were key. There were three such multi-year pacts in effect between 2002 and 2015, before ultimately, in 2018, formal legislation institutionalized a standing Andalusia-wide social economy “council.” Borge says that in Andalusia there are 6,000 social economy businesses, which employ 82,000 people. A five-year government plan emphasizes refinement of evaluation metrics and support of a framework for business financing.
What can Puerto Rico take from these experiences? The challenges it faces are enormous—and are reflected in 2020 census numbers that show that population fell between 2010 and 2020 by 11.8 percent to 3.3 million. At the same time, internationally most social and solidarity economy building efforts have emerged out of adversity. Unemployment in Quebec in the early 1990s, before solidarity economy organizing took hold, was 14 percent. (By 2017, it had fallen below five percent).
At the conference, Grisell Reyes Núñez, a professor at the Institute, spoke of the Institute’s growth. The Institute has deepened its work in the sector, launching its cooperative management program in 2016. It has also advocated for public policy, such as this year’s proposed worker cooperative law. At the conference, Brenda Varela Garcia, Second Vice President of Seguros Múltiples, whose co-op had backed the policy effort, noted possible gains at the municipal level and promised to continue to back Puerto Rico-wide legislation.
Meanwhile, amid the pandemic, co-ops have found new strength in Puerto Rico. An article published on May 31st by Oscar Serrano of NotiCel, for example, reported that cooperative credit unions in Puerto Rico had seen their assets grow from $8.8 billion in 2019 to $10.4 billion in 2020, their fastest rate of growth in a decade. More than one million of Puerto Rico’s 3.3 million people are member-owners of credit unions.
Worker cooperatives are also seeing expansion, which is one of the reasons why worker co-op policy is getting debated, even if the desired laws have yet to pass. One important effort is in energy, where the newly formed REMCOOP seeks to employ a worker cooperative model to support the diffusion of solar energy across the island.
More broadly, in Puerto Rico, cooperatives are increasingly seen as agents for economic development. A year ago, Rafael Beltrán Peña, president of the Puerto Rican Cooperative League, observed amid the initial COVID-19 economic shutdown that it is in “moments likes these…when we clearly differentiate ourselves from purely capitalist firms, and when we see the importance of legal guarantees and public policy that protects and supports cooperative organization. Because cooperation is without doubt essential and inherent to the human condition.”