Retiring Boomers Turn to Co-Ops to Keep Their Businesses Running
The number of worker-owned companies has more than doubled in the past decade in the U.S.
In 1995, Susanne Ward opened Rock City, a homey cafe in the Maine fishing town of Rockland offering morning coffee, warm lunches, and evening performances by local musicians. Fast-forward 20 years, and Ward was tiring of the grind and wanted to cash out and travel, but she feared a buyer might change the character and charm of the business she’d spent much of her adult life nurturing. So she floated the idea of converting Rock City to a cooperative owned and managed by the staff, and after some initial resistance, 17 of the 35 workers opted to join. “We’re small and live in a rural area where good jobs with retirement programs are few,” Ward says. “None of my employees could have bought a business like Rock City on their own. Buying it as a group allowed them each to have ownership.”
It’s an idea with growing appeal for small-business owners. The U.S. has about 800 worker-owned co-ops, up from 350 a decade ago, employing more than 8,000 people and generating almost $500 million in annual revenue, the U.S. Federation of Worker Cooperatives estimates. Co-ops run businesses ranging from housecleaning to taxi services to construction. The smallest have fewer than a half-dozen worker-owners, while the biggest are sizable players in their industries. Founded 35 years ago to boost employment and wages in low-income areas, Cooperative Home Care Associates in New York City has more than 1,000 worker-owners caring for the elderly, ill, and disabled. “In many communities, there’s a hunger for jobs that offer both dignity and a chance at ownership and control,” says Joseph Blasi, director of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University in New Jersey.