Home » This city has a radical plan to get rid of the bosses

This city has a radical plan to get rid of the bosses

BERKELEY, California – In a Industrial space of 4,000 square feet. Hidden in a West Berkeley neighborhood, a team of glassblowers is working hard. In a corner, a young man named Sam is repairing a piece of laboratory glassware used for the distillation of cannabis, the bright orange flames of his lathe dance a few inches from his face. In another, a woman named Laurel is concentrating on the fusion of "frits" of powdered glass.

They both work for Adams & Chittenden Scientific Glass, a company based in the San Francisco Bay Area. But later this month, Sam and Laurel will no longer be employed; they will be co-owners of the company, along with eight of their co-workers.

The company, which produces and repairs highly specialized glass instruments, was launched in 1993. It is obvious that we talked to the two founders, George Chittenden and Tom Adams, in their ruthless office, which overlooks the main workshop. But both have reached retirement age and are ready to move away.

Sam, an employee of Adams & Chittenden Scientific Glass, is repairing a piece of laboratory glass used for cannabis.

Sam, an employee of Adams & Chittenden Scientific Glass, is repairing a piece of laboratory glass used for the distillation of cannabis.

"George is 65 years old and I'm 71, so I'm heading for retirement one way or another," Adams joked from his seat behind a desk full of custom-made glass papers and components. "And for a while, we had been thinking, okay, what the hell are we going to do? We could close the doors and walk away or sell to someone, but that just would not feel right."

"Because the work we do is so idiosyncratic, finding a competent and knowledgeable buyer seems highly unlikely," Chittenden explained. He and Adams did not want to subject their workers to what happened to them in the early 1990s when they worked for another glass blowing company that was sold to someone who was not familiar with the business. Both resigned due to poor management decisions, which they attributed to the inexperience of the new owner.

So, Adams and Chittenden are adopting an alternative approach to business succession: they are selling the company to their workers.

"The idea of ​​becoming a cooperative really made sense," Chittenden said. As a cooperative, the company will be owned and operated by the workers, and each member will receive a portion of the profits and a vote on how the company is managed.

George Chittenden, co-founder of the company, at work.

George Chittenden, co-founder of the company, at work.

Millions of baby boomers like Adams and Chittenden will retire in the next 30 years in what has been called a "silver tsunami." However, the vast majority of the 2.34 million boomer-owned businesses do not have succession plans.

Without such plans, many of these companies face closure or sale to corporations in distant cities, which could have important implications for local economies. Berkeley is just one of the many cities in the US. UU They now face potentially dramatic changes in their small business landscapes. But Berkeley has a plan.

The City's Economic Development Office has partnered with local organizations to explore options to address the approaching silver tsunami. It has established a city-funded programIt is believed to be the first of its kind in the US. UU., Whose goal is to retain and support small businesses that are at risk of closure or, in some cases, be eaten by private equity companies that take away their assets. It will do so by converting them into employee-owned businesses, also known as worker cooperatives.

"Small businesses represent 97% of all employers in the city of Berkeley," HuffPost Jordan Klein, the city's economic development manager, told Reuters. "And they represent around 40% of the jobs within the city, so, obviously, they are critical to our local economy."

Berkeley, along with larger cities such as Austin, Texas and New York, is part of a broader municipal movement that considers employee ownership not only as a strategy to keep businesses at risk, but also as a way to address the increase of income and wealth inequality.

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California has The fourth highest level of income inequality. in the USA US, and the Bay Area is specifically experiencing a housing affordability crisis that increasingly makes it difficult for people with low-to-middle income to live in the cities where they work.

The business cooperative model helps address some of the root causes of these crises by giving workers an opinion about the decisions that affect their lives, said Peter Gowan, a policy partner in the Next System Project, which has just type A report on the property of workers.

A workers' cooperative "says that … we're not going to have someone who makes money just by owning things, that the people who work in this business will also get the wealth generated through the profits," Gowan said.

Because these cooperatives are administered democratically, worker-owners can vote on strategic decisions, for example, if a living wage is provided, for example. A Report 2017 published by the National Center for the Ownership of Employees found that worker-owners earn on average 33% more than their counterparts of employees in the same industry.

Y Research 2016 who studied international data He found that worker cooperatives tend to equal or surpass traditional commercial structures: they survive at least as long, are often more productive, can better cope with recessions, and offer workers opportunities for profit sharing that are not available in the workplace. the traditional companies.

"There is real potential for a workers' cooperative model to guarantee the survival of a company," Gowan said. "But it's more than just survival, it's a transition to a model that allows workers to choose who governs over them during half of their waking lives, a really effective model to deal with this crisis of extractive capitalism."

For companies like Adams & Chittenden Scientific Glass that do not see any other viable option, cooperatives have great appeal.

"When we started thinking about the future, it was not clear," Adams recalled. Then he came up with the idea of ​​becoming a cooperative while listening to the radio. "It was a local segment that talked about the entire process of withdrawing baby boomers who sell businesses to their workers. I thought that, "Hey, that's something interesting."

George Chittenden (left) and Tom Adams (right) in the West Berkeley space where his businesses are located.

George Chittenden (left) and Tom Adams (right) in the West Berkeley space where his businesses are located.

The company received help through the conversion process of Project Equity, a small non-profit organization located in the vicinity of Oakland that promotes businesses owned by its employees.

As one of the local organizations that partner with Berkeley in its cooperative development program, Project Equity has been identifying companies that fall within the silver tsunami risk profile. Found more than 1,000 businesses, what together They employ 30% of the workers and generate around 60% of the income. won by the city's businesses.

"Right now there is a huge disconnect between the decision makers and the people affected by their decisions," Project Equity co-founder Alison Lingane told HuffPost. "Not only are workers affected, it's the whole community, and the wealth and income gaps that result from this are, in many ways, the problems that define our time."

Project Equity has now begun the process of contacting companies and explaining how they could become cooperatives. If a company is interested, Project Equity will conduct a feasibility study to determine if cooperative conversion is a viable option. The business must be profitable (the objective of this program is not necessarily to save companies that are failing even before their owners retire) and, of course, workers must be really interested in taking over the business.

These studies can take months and each one is priced at approximately $ 5,000. So far everything is subsidized by the city. This is significant, said Lingane, "Berkeley is the first city in California where we know that the city itself has invested money in this strategy."

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The idea of ​​turning boomers' businesses into cooperatives is also gaining support at the federal level. In 2018, the Main Street Employees' Ownership Act, which facilitates obtaining loans from employee-owned businesses, was enacted with bipartisan support. The law is designed to level the playing field for worker cooperatives, which, because of their ownership structure, tend to find it more difficult to obtain financing than traditional companies.

"What we've had for a long time is a model in which owners create small and medium-sized businesses," Gowan told HuffPost. "And then one of these big capital firms – capitalist vulture, I like to call them – sweeps and eliminates the most profitable parts and dismisses the rest of the workers, we see this all over the country."

Gowan is hopeful that the massive retirement of baby boomers will stimulate an alternative vision to take root.

Adams & Chittenden Scientific Glass is about to complete the final legal steps toward conversion. They made the announcement at their annual pork roast in March, an event they have organized over the past two decades and that attracts hundreds of community members to their live music workshop, demonstrations and, of course, a pig with a habit. – Apple glass blown in your mouth.

"Everyone here is here because they dig glass," Chittenden said. "So they are committed, and if they are productive and manage the business well, they will receive a better payment and have control over their situations."

Chittenden is very aware of the economic inequality in his community. "It's so problematic here in the Bay Area," he said, looking over the workshop floor. "That's one of the things that, just at a kind of soul level, this transition feels very good: the employees are becoming owners of their business, and if these guys can make a living doing this, I would really feel proud of that, really proud. "

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HuffPost's "This New World" series is funded by Partners for a New Economy and the Kendeda Fund. All content is editorially independent, without influence or contribution of the foundations. If you have an idea or suggestion for the editorial series, send an email to [email protected]

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. (tagsToTranslate) Business (t) this new world (t) inequality (t) Baby Boomers (t) Berkeley (t) California

Source: https://www.huffpost.com/entry/berkeley-business-cooperatives-baby-boomers-retire_n_5cc8b8d2e4b0d123954be5df

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