As councils struggle with cuts, one city adapted a pioneering grassroots approach from America to tackling inequality and keeping profits local
By: Hazel Sheffield | Freelance Journalist | The Guardian | April 11, 2017
Video via John McDonnell MP | You Tube | March 21, 2017
Ted Howard looks out on a group of people drinking tea from styrofoam cups at Preston town hall on a Monday afternoon in March. The social entrepreneur and author from Cleveland, Ohio, is the special guest at the city’s monthly social forum. “What’s happening in this community is historic – it blows my mind,” he tells the city councillors and local business owners. “We’re working out how to build an inclusive economy.”
Howard’s infectious enthusiasm has made him the de facto spokesperson for “community wealth building”, a way of tackling inequality by ensuring the economic development of a place is shared more equally among its residents.
To do this, Howard harnessed the co-operative model, in which an enterprise is jointly owned and operated by members for their mutual benefit. In Cleveland, he helped set up worker co-operatives to supply local institutions – such as hospitals, councils and universities – in order to keep profit localised. Redirecting local spending for community wealth through the use of worker co-operatives has now become known as “the Cleveland model” – and cities around the world suffering the negative effects of globalisation are looking to it to help them recover.
This grassroots economic development approach originated in the Basque region of Spain, where the Mondragon Corporation, a federation of worker co-operatives that now employs more than 74,000 people in finance, retail and other sectors, was set up in 1956, based around the ideals of social responsibility and participation.
Howard and his organisation, the Democracy Collaborative, applied the idea in Cleveland by establishing the worker-owned Evergreen Cooperatives in 2008, in collaboration with the city government and the Cleveland Foundation, the world’s first community foundation, which dates from 1914. An industrial-scale laundry and energy business were set up as co-operatives to serve the biggest spenders in the city. Green City Growers, a co-operative urban farm, followed in 2012.
When Evergreen Cooperatives began, Cleveland badly needed change. Its population had shrunk by more than 58% since 1950 due to the decline of manufacturing jobs in the city. In 2007, Cleveland’s poverty rate was among the worst in the US: 27% of residents lived in poverty, a much higher proportion than the US national average of 12.5%.
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