I work with workers in crisis. I’ve been to hundreds of factories across the globe that were being closed. I’ve observed the damage losing work causes, the anguish of workers whose lives were being destroyed, and the communities torn apart in the aftermath.
Unfortunately, this phenomenon has not only become more common, it threatens to become the norm. Globalization and the decline of the traditional employer-employee relationship are driving anxiety over the future of work and the threat to shared prosperity to the fore of policy concerns, just as they were as the Department of Labor’s Future of Work symposium last December. With income already persistently stagnant and inequality at staggering levels, waves of technology shocks have the potential to increase the instability of large swaths of the workforce.
However, I am not just an observer of crisis, I’m an investor in workers overcoming their crises. Of the hundreds of businesses I’ve been to that were facing closure, all were reopened by their workers, with the vast majority becoming successful worker-owned cooperatives with jobs, lives and communities saved in the process.
This is exactly what happened at the New Era Windows cooperative. In 2008, a Chicago window factory was closed and all the workers were fired without their due severance or benefits. The workers occupied the factory in protest, and they were overwhelmed with support from their community and around the country. Three years later, those same workers approached us with a new dream: to buy the factory and reopen it as a cooperative.
In August 2012, we gave an investment of over $800,000 to the workers and began providing the technical assistance needed for them to run the factory. In May 2013, New Era Windows officially opened under worker control. We have made loans to hundreds of worker-owned businesses like this, and over 98 percent of the projects succeeded and paid us back in full. The secret to this success is not magic: Our investments succeed because our workers are motivated to succeed. Our philosophy – that capital should serve the needs of labor, not the other way around – gave the workers at New Era the power to fix the crisis they faced themselves.
With their success, New Era showed us a way to fix our larger crisis: to improve the fortunes of most Americans, we have to make workers a part of the game. Worker-centered growth and worker-owned business can radically improve the possibility of shared prosperity and unlock the potential of workers. Worker ownership might seem too good to be true, but research shows that worker-owned businesses are not only viable; they perform as well or better than their investor-owned counterparts.
I’ve seen how successful worker-owned businesses are often tremendously better at creating community wealth and health, equality, racial and gender inclusion, and opportunities for worker advancement and security. They also change the dynamics of a company so that workers can take advantage of new technologies rather than the other way around.
Through smart policies, the United States has the greatest per capita home ownership rate in the world. We have the power to achieve similar success with worker ownership. Most investor-owned businesses fail and yet they dominate our economy, so we should approach any supportive policy program knowing experimentation is a part of business. Those policies that succeed can change work as we know it.
Worker-ownership policy has been a good idea for a long time, but it’s now imperative: The “silver tsunami,” or retirement of baby boomers, means that a million solvent businesses could close in the next decade for lack of a successor. If this happens, the effect will be devastating. The most viable candidates to keep so many businesses running are the workers and communities who benefit from them. Worker-ownership is not just a practical solution – it has the potential to turn this crisis into an opportunity. It could make what would otherwise be a severe economic contraction into the largest intergenerational and inclusive transfer of wealth in our history.
The future of work and the hope for shared prosperity are in peril as perhaps never before. But I have seen that we have another option. Worker-led growth can change the game at a systemic level deep enough to shift this dynamic and unlock the tremendous potential of American labor. Worker-ownership can become the 21st-century American Dream.
Brendan Martin is founder and executive director of The Working World, a “venture cooperative” fund.