The Need for Producer and Worker owned cooperative businesses in New Orleans

A number of recent statistics indicate the need for producer and worker owned business in the arts, music, culture and tourism and hospitality in New Orleans, the industry sectors that are experiencing the greatest poverty. 

 Let's consider first the recent study by Bloomberg, that ranks New Orleans "second worst in the U.S. behind Atlanta in income inequality. Although second worst, income inequality in New Orleans has increased at a faster rate."  

   Then there is New Orleans entrepreneurial start-up rate that continues to expand, reaching 501 business start-ups per 100,000 adults in the three-year period ending in 2012 - a rate that exceeds the nation by 56 percent.
Are these statistics related?  How we can have more new businesses and poverty and income inequality rising simultaneously?  




   A look at just the restaurant sector of the tourism and hospitality industry highlights the disparities between the city's owning class and working class ~

According the recently released report, The Great Service Divide, by the Restaurant Opportunities Center of New Orleans, " Despite the industry’s growth, restaurant workers occupy six of the ten lowest-paid occupations in New Orleans according to the Bureau of Labor Statistics.

 The restaurant industry employs nearly 57,000 workers and is one of the fastest-growing sectors of the New Orleans economy.
Restaurant workers experience poverty at nearly three times the rate of workers overall, and workers of color experience poverty at nearly twice the rate of white restaurant workers.
Sixty-one percent of workers of color who work as bartenders and servers earn below twice the poverty level, compared to 48% of white workers.
Twenty-five percent of Black workers and 23% of Latino workers are unemployed, compared
to only 3% of white workers, among bartenders and servers currently on the job market.
Workers at or below twice the poverty level
White  47.5%
Black  61.2%





Like restaurant and other tourism and hospitality workers, creative workers in arts. music and culture, exploitation, labor abuse, wage theft, marginalization and poverty is rampant. For instance, for indigenous cultural workers:

    •    42% of the African American indigenous cultural community is not employed or is out of the labor force (including retired); 13% for whites.

•    Average household incomes of culture producers is approximately $24,000.

Within neighborhoods along the Claiborne Corridor, some of the city's most significant in terms of the production of the creative cultural products and services the city and its tourism industry most rely upon,  38% of households live at or below the poverty line, compared to 21% of all New Orleans residents.

Adding to the social and economic stress these working families experience is rapid gentrification and the housing speculation that goes along with, causing rents to rise -Figures for 2011 showed that 54% of renters in the city were paying more than 35 percent of their pre–tax income on rent and utilities in 2011, up from 43 percent of renters in 2004.   Meanwhile, it's still on the rise, while wages remain stagnant ~ "Average renters in New Orleans can expect to hand over nearly 41 percent of their income to landlords next year, essentially the same as 2014, according to a report released Tuesday (Dec. 23, 2014) report by real estate data service RealtyTrac. "

For more see my paper NEW ORLEANS POVERTY & THE NEW CULTURAL ECONOMY (2005)

My next blog entry next week will explore the possibilities multi-stakeholder cooperative businesses owned by producers and workers in art, music and culture and tourism and hospitality can turn things around in New Orleans in the run up to New Orleans 2018 Tricentennial. 

The New Orleans Cooperative Development Project is working toward forming a coalition of individuals and grassroots groups to bring more worker-owned businesses to the metro area.  While the metro area prides itself on innovation, we have neglected the area of economic innovation, especially in creating the necessary economic pathways that could serve to stem our rising poverty among the working class.  Other regions are engaging actively in opening up and building economic pathways that create greater community wealth.  Take a look at some of these initiatives and groups ~ Cooperation Texas and The Southern Grassroots Economies Project. The Philadelphia Cooperative Alliance is notable in their numbers ( 100 in the Philly area, 4 of which are worker-owned) and in their effectiveness and how they have teamed with their area legislators to garner support.  Their congressional representative, Congressman Chaka Fattah introduced the CREATING JOBS THROUGH COOPERATIVES ACT of 2013 this past June.  The bill will promote job creation and economic development in underserved communities through cooperative business development. In addition, The Philadelphia Area Cooperative Alliance (PACA) worked with their city council on a resolution supporting cooperative development as part of 2012's International Year of the Cooperative ~ See: http://www.philadelphia.coop/wp-content/uploads/2012/02/Resolution-on-Co-ops-IYC-adopted-January-26-2012.pdfhttp://www.philadelphia.coop/wp-content/uploads/2012/02/Resolution-on-Co-ops-IYC-adopted-January-26-2012.pdf

The recent much heralded election of Bill de Blasio as New York City's new mayor indicates how the rising tide of the new collaborative and cooperative approaches is transforming cities, as New York City is currently home to at least 23 worker cooperative businesses employing over 2000 workers in Manhattan, The Bronx, Brooklyn, and Queens. This video by Grit TV A Co-op Story: People's Construction in Rockaway

of a cooperative development effort following the devastating effects of Hurricane Sandy indicates the growing movement in that region.

Then there is Jackson, MS! Yes, that is Mississippi!  Jackson's new mayor, Chockwe Lumumba, elected on June 4, 2013  has this in his winning platform:

Economic Growth

The growth of the Jackson economy is necessary to improve the living standard and prosperity of the entire city.  Economic growth must be accompanied by economic justice.  Growth in the economy of the City must be shared by Jackson residents regardless of economic statics, race, gender, sexual orientation, national origin or nationality.

To achieve economic growth the following should be implemented in addition to programs and policies suggested elsewhere in this document.
Create an economic mission of business persons and workers who seek investors nationally and worldwide who will establish industry and business in Jackson.
Develop through the planning department and other relevant city agencies the capacity for Jackson to expand and create public works projects, particularly infrastructure projects.  Also develop the capacity to create green industry and green jobs.
Grant tax incentives for Green energy innovations and improvements by businesses and home owners.
Establish job training programs particularly in green industry, construction and recycling.
Develop new industry particularly in recycling, alternative energy and in other productive fields. Develop consumer and producer cooperatives.

Lumumba, in his former professional life, prior to becoming Jackson's mayor, was counsel for the late Tupac Shakur.
 
Let's begin building a more inclusive, collaborative and cooperative economy here too New Orleans! Email your contact info to: nolacoop@gmail.com
We need folks who will serve the New Orleans Cooperative Development Project's steering committee and other committees too ~ Be part of the change! 

New Orleans Rising Poverty .....

 
The Greater New Orleans Community Data Center examined 2012 demographic data recently released by the U.S. Census Bureau and identified important trends in metro area parishes.  The data indicates that Orleans Parish's poverty rate in 2007 was 21%, one percentage point above the national average.  
However, by 2012 the city's poverty rate had jumped to 29%.  How could this happen in the midst of all the rebuilding, entrepreneurial activity and a supposed unemployment rate of 4.5%?

Those of us involved in finding new economic pathways that are more inclusive believe that our indigenous entrepreneurs are being shut out as local economic and workforce development entities work instead toward attracting entrepreneurs and businesses from outside the region, rather than growing from within. Because tourism and hospitality remain as New Orleans largest employer we continue to have a workforce that is paid abysmal wages that are made worse with the frequent occurrence of wage theft within the sector.  Local economic development entities routinely put forth how awful the city was prior to Katrina citing its poor educational system, its crime, etc., all the while ignoring the significant production activities and positive contributions of long time residents that has made the city so attractive to this newly arrived entrepreneur class.  This is why there is a growing call for the worker-owned business model to be made central to both our economic development and workforce development strategies in the New Orleans metro region. 

Our official economic and workforce development entities also continue to ignore the effects this influx of new entrepreneurs has had on those who resided here before Katrina, such as the precipitous rise in rental costs, leaving 36% of the city's renters now spending more than 50% of their pre-tax income on housing costs. The national rate for 'severely cost–burdened renters' is 24%. However, most of the newly arrived continue to cite the music, art and culture here as one of the primary reason for relocating to New Orleans to start their businesses.

Our economic and workforce development system is a mess nationwide, but much more so here in Louisiana and New Orleans especially.  Ted Howard, Executive Director of the Democracy Collaborative at the University of Maryland estimates the U.S. spends $37B on workforce development and, the more astounding figure of $80B on swaps - the public money, in the form of various subsidies spent enticing companies to relocate from one region to another.  Businesses, i. e., corporate welfare.  Businesses are making out like bandits while tax payers and workers are raked over the coals. In addition the workforce development system is very employer centric, leaving workers in a situation where they are routinely channeled into low-wage jobs at a high public cost. For more on the high public costs of such economic development strategies see:  "Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry," an October 2013 report sponsored by the University of California, Berkeley's Center for Labor Research and Education and the University of Illinois Urbana-Champaign Department of Urban & Regional Planning, with funding provided by Fast Food Forward.
 
 In Louisiana, 73% of fast food workers receive some form of public assistance - the highest rate in the nation.  In addition, 37% of these workers have some college education. Many fast food workers are also expected to work several hours per day off-the-clock, stocking and cleaning, at the beginning and end of their shifts.  None are allowed to work a 40 week, as that would mean their employers would have to provide health insurance for them.  That has become an increasingly common situation in most industry sectors, even for those with college degrees, indicating how important the Affordable Care Act is to many Americans.

Fast food workers, restaurant workers, hotel workers and retail workers and increasing more and more workers in other sectors are receiving poverty level wages with no benefits, living pay check to paycheck and not being able to make ends meet, while being characterized as lazy. These workers are our hardest working Americans, working far harder and longer than the shareholders of the companies they work for...

Is there any hope within this abusive system?  Not really.  The hope lies within our own communities, with us and with our own initiative to change the system.  We work within this system and know best the changes that need to happen so that our families and neighborhoods may live decent lives.  We can build our own economic system from the ground up ~ one that is inclusive and that serves ourselves and our families and our communities rather than some small group of far-flung corporate shareholders. We can build our own democratic workplaces, we can HIRE OURSELVES, through building worker-owned businesses in our communities.  That is what we are working toward in forming the New Orleans Cooperative Development Project.  Please join us as we build this movement here and around the nation.  We can join together and collaborate and cooperate on a more equitable way forward ~ and create work and jobs ~ jobs with ownership, democratic workplaces with the kind of flexible workplaces parents, families and all workers need.  We can bring back quality and craftsmanship to the products and services we produce and have pride in our work once again. 

Economic & Workforce Development System is BROKEN!

    Fifty years ago this nation was concerned about those living in poverty, but now 50 years later the undoing of that national concern for marginalized communities is almost complete.  Workers are now experiencing a so-called modern economic and workforce development system that is so politicized, and has been so privatized, that it undermines every effort workers make at supporting themselves and their families.  Last week we watched as the city of Detroit was forced into declaring bankruptcy and now this week we watch as fast food workers in cities all over the U.S. have risked arrest by going out on strike and protesting the abysmally low wages that keep so many American workers in poverty, while the corporations they work for experience record profits.

    How did this happen?  It seems to have begun with the almost immediate decimation of the very programs meant to help the jobless and working poor lift themselves out of poverty, programs put in place following the The March on Washington for Jobs and Freedom that occurred 50 years ago this month .....

The Johnson Administration responded to this growing popular grassroots movement for civil rights, for social and economic equality, with a broad array of antipoverty legislation.

" The Economic Opportunity Act (1964) provided the basis for the Office of Economic Opportunity (OEO), the Job Corps, Volunteers in Service to America (VISTA), Upward Bound, Head Start, Legal Services, the Neighborhood Youth Corps, the Community Action Program (CAP), the college Work-Study program, Neighborhood Development Centers, small business loan programs, rural programs, migrant worker programs, remedial education projects, local health care centers, and others. The antipoverty effort, however, did not stop there. It encompassed a range of Great Society legislation far broader than the Economic Opportunity Act alone. Other important measures with antipoverty functions included an $11 billion tax cut (Revenue Act of 1964), the Civil Rights Act (1964), the Food Stamp Act (1964), the Elementary and Secondary Education Act (1965), the Higher Education Act (1965), the Social Security amendments creating Medicare/Medicaid (1965), the creation of the Department of Housing and Urban Development (1965), the Voting Rights Act (1965), the Model Cities Act (1966), the Fair Housing Act (1968), several job-training programs, and various Urban Renewal-related projects. " - Kent B. Germany, See: http://faculty.virginia.edu/sixties/readings/War%20on%20Poverty%20entry%20Poverty%20Encyclopedia.pdf



   "AFTER President Lyndon Johnson signed the Civil Rights Act of 1964, he reportedly turned to his press secretary and lamented that Democrats 'have lost the South for a generation.' Johnson's judgment was optimistic. Despite brief flashes of strength during the presidential elections of Jimmy Carter, Bill Clinton and Barack Obama, Democrats—particularly white Democrats—have been losing ground in the South for half a century."  The ECONOMIST, Politics in the South, The Long Goodbye ~ Is the white Southern Democrat Extinct, endangered or just hibernating? Nov. 2010mocrats

     Not only have Democrats lost ground, it seems many have defected and remain Democrats, particularly white southerners of the party, in name only, wearing the clothing of equality and democracy while capitulating to the same moneyed private interests as Republicans. Southern Democrats are as responsible for rising joblessness and poverty as Republicans, despite their rhetoric.

  It was Nixon however, a short time after his election that began the dismantling of the Office of Economic Opportunity by putting Donald Rumsfeld in charge of the office, who then hired a young Dick Cheney.  The rest is history as we know it.
  

Thanks to Maureen Rice for this telling pic ....

United States Income Inequality Map

United States Income Inequality Map

Economic Democracy

Economic democracy refers to a socio-economic arrangement where local economic institutions are democratically controlled by those engaged in the local economy. These economic institutions include business, finance, research and development, and education.........economic democracy also refers to the cooperative ownership of the local economy by all who participate. For many, this is a radical notion, one that carries unfortunate political baggage that has stymied a healthy debate about the merits of this type of economic organization. Economic democracy does not reject the role of markets, but because of the wide ownership structure, it alters the primacy of the profit-maximizing motive among economic decision makers.

Proponents of this form of economic organization argue that the realignment of interests that takes place begins to reconcile conflicts between the owners of productive assets and laborers, while rooting wealth in local communities. Cooperative businesses are one of the more natural firm types fitting within the model of economic democracy, be they worker, producer, consumer, or housing cooperatives.

Promoting Worker-Owned Cooperatives as a CED Empowerment Strategy: A Case Study of Colors and Lawyering in Support of Participatory Decision-Making and Meaningful Social Change, Carmen Huertas-Noble, CUNY School of Law, Clinical Law Review, Vol. 17, No. 1, 2010 

More on wise economy, work, labor, magic, hoodoo, art, music... dancing the dance ...The Long Road to Recovery, by Richard Florida, author of the best-selling book, RISE OF THE CREATIVE CLASS