.Oakland City Council Looks to Provide Support for Worker Cooperatives

The Oakland City Council is considering a resolution to support an unconventional business model that some say can help fight income inequality in the East Bay. The resolution, which the council will review at its September 8 meeting, is aimed at encouraging the development of worker cooperatives, which are businesses that are owned and governed by employees, meaning workers share profits and tend to make above-average wages.

The Sustainable Economies Law Center (SELC), an Oakland-based nonprofit that worked with Councilmember Annie Campbell Washington on the resolution, said the measure is largely symbolic but hopes it will be a precursor to the passage of more concrete reforms that would incentivize the growth of these businesses in the city.

The resolution directs the city’s Business Assistance Center to offer improved services to cooperatives. Under the resolution, the center would “provide tailored resources created by community organizations and make referrals to technical assistance providers for individuals seeking to launch new worker cooperatives or convert conventional businesses to worker ownership.” 
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Campbell Washington, who introduced the resolution with Council President Lynette Gibson McElhaney, said the proposal was a first step in creating better systems in the city to support these ventures. “There are people that are drawn to Oakland who are creative … who think progressively and really want to look at business in a different way,” she said.

Oakland and surrounding cities in the East Bay are already home to several cooperatives — including Arizmendi Bakery in Oakland, one of a local chain of cooperatively owned bakeries. But co-ops are challenged by a relative lack of resources and visibility, according to Amy Johnson, co-executive director of the United States Federation of Worker Cooperatives. New co-ops, for example, can face a range of logistical challenges, such as struggling to complete extensive ownership paperwork for dozens of employees. They can also struggle to understand how various business regulations apply to their unique operations. Juno Thomas, a coordinator at Oakland’s Business Assistance Center, said that people who come to the center seeking help in starting a co-op often end up needing legal advice on some of the basic steps of launching the business.

The resolution specifically cites the city’s growing income inequality as a key reason to support co-ops, which can help low- and middle-income people earn fair wages and benefits. According to the resolution, Oakland households with incomes in the top 5 percent make nearly twelve times as much money as households in the bottom 20 percent. 

Ambri Pukhraj, who works at the cooperatively run Cheese Board Collective in Berkeley, said that she appreciates the way this business model breaks down traditional hierarchies. “As a woman of color, there are so many fewer barriers to participating in my business because I have the same voice as everyone else,” she said.

In the future, SELC hopes the council will pass a more advanced ordinance that would, for example, create a fund to assist cooperatives and exempt these companies from business taxes in their first year.

SELC also recently advocated for Assembly Bill 816, legislation the governor signed into law last month, which lays out formal requirements for the designation of a corporation as a worker cooperative.

You can read the full Oakland resolution here. 

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