Cooperation is key: Why there should be more support for co-op businesses in Detroit

Across the street from Marygrove College, tiny members of The Detroit Parent Collective (DPC) are starting school. Krista McClure, founder of DPC, hopes that the cooperative preschool and parent co-working space will serve not only the needs of the children, but also create a sense of ownership, pride, and community for the families. 

"At the end of the day, where children feel most secure is often in their homes," says McClure. "The idea is to replicate that here as much as possible."

As a young mother, McClure wanted to create a space where women, children, and elders from a range of socioeconomic classes would feel comfortable. After learning about the cooperative model when she lived in Seattle, she knew it would be the best way to cultivate community right from the start.

In a co-operative preschool, parents invest time in the classroom, bringing their ideas and skills with them. "We are creating a cohort. The classroom size will remain small, but really this cohort is designed to become a family and to be able to rely on each other in and outside the classroom."

Rendering of Detroit Parent Collective

For McClure, her vision reaches far beyond the walls of the preschool. She hopes that DPC will demonstrate what a successful school can look like, so that when families step into the K-12 sector, they are able to ask for and demand quality education. 

In an economy where temp and freelance jobs are becoming increasingly common, a cooperative business model is an attractive alternative. While it has yet to take off in Detroit, there are a number of organizations trying to encourage the model's growth. And there are plenty of cases nationally that prove its viability. 

Cooperation across the Midwest

One way some U.S. cities have leveraged business development while addressing the needs of citizens has been to invest in worker-owned business cooperatives. 

Cooperatives are democratically-governed enterprises with one vote per member. In worker-owned cooperatives, the members are the workers and they own the means to production. Imagine working at a job where you and your co-workers make decisions on what was best for you and for your customers, without having to satisfy stakeholders or corporate executives. In the cooperative model, the owner is removed—each worker becomes part-boss, part-owner and profits are distributed equally to members. 

There are many advantages to this model. Although the number of worker-owned businesses in the U.S. is small, around 400, with roughly 4,500 worker-owners, these businesses tend to be just as productive, if not more, than regular ones. They're less susceptible to failure and can prevent job-loss during an economic downturn or when owners retire. Cooperative businesses help keep profits rooted locally rather than going to executives and shareholders who may live elsewhere.

Cooperative business development has become an increasingly popular alternative to waiting for private investors to create jobs, which in the years following the Great Recession have largely been low-paying or temporary.

In Cleveland, Ohio, The Evergreen Cooperatives were created to address poverty in specific neighborhoods across the city. The Evergreen model took a "build and recruit" approach, creating jobs by incubating businesses and then training local residents to fill them with the help of foundation support. Profits were therefore redistributed in the local community, creating a sustainable model for reducing poverty.

Two of the three incubated businesses are now profitable.

Cooperatives have also been used to help prevent gentrification. As in Detroit, real estate speculation in the Northeast Minneapolis began to the neighborhood, and many residents were concerned about increasing property prices.

That's when community members joined together to purchase commercial property. Residents formed an investment cooperative that now owns commercial space and has directly helped the neighborhood address community needs and desires.

By prioritizing the needs of the community and its members over profits, these models addressed the roots of economic equality, and illustrate how a city like Detroit could benefit from city and foundation backed cooperative development. 

The Detroit model

Grace in Action, a church in Southwest Detroit that incubates cooperatives

Detroit is ripe for cooperative businesses development. The city has a thriving network of entrepreneurial and technical support organizations. There are dozens of programs and incentives for businesses in Detroit through organizations like TechTown, Build Institute, and the New Economy Initiative. Despite this, cooperative businesses have barely been discussed as a viable model for entrepreneurship and business development.

But why not here? Jobs that are on the horizon for Detroiters are generally low paying and temporary. Of the 24,000 jobs promised by Dan Gilbert's proposed downtown developments, 15,000 are temporary construction jobs—many of which will never be held by Detroit residents. 

The good news is that cooperative businesses are not new in Detroit, and there's currently an increased effort to create more. 

The Detroit People's Food Co-op, a membership based cooperative, is in the final stages of planning before they break ground on a  brand new building in the North End. The Cooperation Group in Highland Park and The Center for Community Based Enterprise in Midtown are fully-equipped technical support service providers that help with cooperative business development. The recently founded Detroit Community Wealth Fund is dedicated to providing non-extractive loans to cooperative businesses in the city. 
Maria Perez
In Southwest Detroit, Grace In Action aspires to be a cooperative incubator, cultivating their collectives into fully functioning cooperative businesses. They recently incubated their first co-op, Cleaning In Action, a women-owned cleaning cooperative. The women had previously worked for temp agencies and now make a living wage.

Co-founder Maria Perez hopes her business will inspire others. "This co-op helps women in our neighborhood. If we tell others about it, the idea will catch on. I see that this will open doors for others, especially younger generations."

What will the Detroit model look like? When will we begin to build upon the work and efforts of residents who are rooted in their community and who already know how to address their needs?

B. Anthony Holley, a partner at The Cooperation Group, believes Detroit is the perfect place for the cooperative model to thrive. "Cooperatives are important in Detroit because in a place where there is extreme poverty and privatization, cooperatives offer a space where democracy and ownership are inherent."

Read more articles by Margo Dalal.

Margo Dalal is a community organizer in Detroit. She is currently pursuing her Masters of Social Work at the University of Michigan. 
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