Plan B: democratizing the economy
Doing laundry: Necessary evil or future economy?
The thing about doing laundry is that it’s never-ending. Just when you get three loads done, you think: that should do it for the month. Four days later: out of kitchen towels, already? It’s a chore, but the Democracy Collaborative in Cleveland is making me look at the laundry in a whole new light: they’ve proven it can be a pathway to an inclusive economy and community wealth building.
Explainer: The Democracy Collaborative believes in the power of public institutions. As Ted Howard, Democracy Collaborative co-founder and president, told Think Upstream podcast Plan B host Ralph Benmergui in this must-listen-to interview:
“Most communities have anchor institutions. Economists call them sticky capital. They’re rooted in place. A university. A health system. A museum. A city government. These are things that typically don’t get up and leave, unlike major corporations. They stay in place, so they are anchored institutions.”
Take universities and hospitals. The Democracy Collaborative realized their combined economic activity in the U.S. is around $1.2 trillion a year in terms of purchasing power. So what do you do with that power? Make it work for the most marginalized in your community—especially if your community is in economic distress.
As Ted explains to Ralph: Cleveland has gone from one of the five wealthiest cities in America to one of the three poorest. Cleveland was once home to more Fortune 500 companies than anywhere else except Manhattan. Then the manufacturing sector collapsed. And the companies took flight.
Now at this point in the interview I’m thinking about cities like London and Windsor, Ontario—once-thriving cities now in economic distress. I’m thinking about this story, where Calgary lost 1,000 jobs in a single week due to a confluence of events, including public sector cuts.
What does any of this have to do with laundry? Back in Cleveland, the Democracy Collaborative realized the city’s anchor institutions—such as universities and hospitals spending procurement dollars on businesses that weren’t even rooted in the city—were surrounded by the poorest neighbourhoods in Cleveland. “Obviously the money is not hitting the street in the neighbourhoods,” Ted says.
So Ted and the Democracy Collaborative started to have conversations with leaders in their public anchor institutions. Think: hospitals. They serve a lot of food. They consume a lot of energy. They have laundry service needs.
Wait, what? Laundry service needs.
So the Democracy Collaborative worked with local health centres to create a worker-owned cooperative that now does laundry for Cleveland hospitals. They started small, with five workers drawn from vulnerable communities—like formerly incarcerated people who couldn’t find work after prison but had much to offer. Now there are 200 workers in the employee-owned cooperative doing laundry for Cleveland hospitals. Guess what? Those workers are paid a living wage. They get health benefits. They have access to profit-sharing that allows them to build assets. And that money stays in the community, in neighbourhoods and households that need it most.
Democratic ownership: Ted told Ralph that there are 10 million people working in worker cooperatives or employee-owned companies in the U.S.
And what does the evidence tell Ted? Employee-owned companies consistently pay higher wages, provide better benefits, and their retirement accounts are two-and-a-half times larger than traditional companies. “The defining characteristic of any economy is who owns and controls the capital and, therefore, is making the decisions,” Ted says. “This idea of democratizing our economy is the idea I hope will play out over history.”
An inclusive economy is possible.
Trish Hennessy is a senior communications strategist at the Canadian Centre for Policy Alternatives and the director of Think Upstream