As we move forward into the new year, the effort to put 2020 behind us is strong, “back to business as usual” as they say, but the hardships of the past year are not relegated to stay there. The crises of 2020, kick-started by the Covid-19 pandemic, have illuminated for many the cracks in the system, flaws that were always there; wealth and racial inequality, a populace living paycheck to paycheck, unstable supply chains, indifferent governments, inadequate social services, etc., etc., issues partly obscured in the past by a “healthy” economy and blissful ignorance.
The growing instability is opening people’s eyes and breeding animosity towards the current system as they realize how evident it is that change is needed. According to the Edelman Trust Barometer “83 percent of employees say they fear losing their job” and “56% of people believe capitalism as it is today does more harm than good in the world.”
We may be more aware of issues now, but even before the pandemic, looming trouble for the citizenry was evident. One study by Go Banking Rates in 2019 found that 70% of Americans had less than $1000 in savings. This is not exactly the prosperity and healthy economy reported by the media. It was only a matter of time before the table on which the house of cards stood was shaken.
However, our recent difficulties, distressing and regrettable as they might be, bring with them unprecedented opportunities to transform the current system and build more cooperative communities. With the collapse small businesses all over, the looming “silver tsunami” of baby boomers reaching retirement age, and the distrust in governments to turn things around, the stage is set to build a new economy designed to benefit everyone and lead us into the new roaring 20’s.
The Small Business Collapse
Covid-19 restrictions and the economic downturn since have spelled disaster for the small businesses of America. In September 2020, according to the Yelp Economic Impact Report, 97,966 small businesses had closed permanently. This is obviously a tragedy, one of many over the past year.
At the same time these small businesses have closed, and communities all over have felt that impact, this vacuum in these businesses’ absence has been filled by the corporations and the wealthy few that run them. Since March 2020, American Billionaires have increased their wealth by over $1.1 trillion dollars, resulting in an upward flow of wealth that only exacerbates the inequality crisis plaguing us.
Yet as small businesses close and communities are left without jobs and income, there comes the opportunity for cooperatives to fill this gap. Worker owned enterprises work wonders for revitalizing local communities; they provide good jobs with a larger share of profits, and keep the supply of goods local. There is also a growing wealth of evidence that says worker co-ops are more sustainable and flexible that traditional businesses.
A 2013 study by Professor Erik Olsen at the University of Missouri, which focuses mainly on worker cooperatives in Canada and the UK (since they have a larger cooperative sector than the US), found that “Cooperatives in British Columbia between 2000 and 2010 had a five-year survival rate of 66.6% (100 out of 150), compared to conventional Canadian businesses what had a 43% 5-year survival rate.”
What better way to come out of the economic downturn brought by covid-19 than by creating a strong sector of democratically run businesses that not only create local jobs with better pay, but have a stronger survival rate than traditional companies?
The Silver Tsunami
Though it may have a whimsical name, what is dubbed the silver tsunami is a crisis that is fast approaching us. Members of the baby boomer generation make up 41% of small business owners. As they reach retirement age, much debate surrounds the question of what will happen to these businesses.
By selling their business to their workers and converting it into a cooperative, these business owners hold in their hands the possibility to be the architects of a wealth transfer the likes of which has never been seen.
Work is already being done in this regard. Organizations such as Project Equity are paving the way for co-op conversions on a large scale. By providing resources and consulting, nonprofits can help both owners that want to sell to their workers, and those workers that may need someone to guide them through the process of setting themselves up as a cooperative.
Distrust in Political Systems
Americans especially, are beginning to have doubts about the government’s ability to act fast enough and in the people’s best interest to address the societal issues we are facing. A staggering 71% of people believe our democratic system is broken. Evidence of this distrust is all around us; protests, social media outcry, support for populist candidates, strident political division; the belief that governments can or will fix things is quickly disintegrating. It is only a matter of time before citizens look to other means outside of the current system as a solution to their problems.
Cooperative organizations are not partisan, nor are they even bi-partisan, in fact one could call them un-partisan. Although financing and incorporation laws need to be addressed to ameliorate some cooperative barriers to entry, and while a cooperative first politician would do wonders for the movement, political games largely are not necessary to build a cooperative community that addresses the real-life issues we are facing. They can provide jobs and housing, build wealth, grant better access to healthcare, and many of the other issues debated during each election cycle.
The Time is Now
Humans are made for collective action. For thousands of years, our ability to cooperate in order to achieve a common goal has allowed us to flourish. While our communities have gotten larger and our lives globally linked, we must not forget that it is easier to build something together than it is apart.
The suffering of the past year has hit many, and it seems like there is little end in sight, but everything has a silver lining. We must take advantage of the opportunities we are given and channel the energy of 2020 into something better, something more equal, something we can be proud of.