Economic Update with Richard D. Wolff

Episode: Why Worker Coops – May 11, 2017
Guest: Jessica Gordon Nembhard

Episode Overview

This episode of Economic Update, hosted by economist Richard D. Wolff, explores the concept, history, and present-day significance of worker cooperatives (“co-ops”), with a deep focus on their role in addressing economic inequality and offering alternative structures to traditional capitalist enterprises. Wolff is joined by Professor Jessica Gordon Nembhard, noted scholar and activist in the field of cooperative economics, to discuss both the theoretical and lived experiences of worker co-ops—particularly in African American communities.

Key Discussion Points & Insights

1. Global and U.S. Economic Updates

(00:00 - 29:26)

A. Australia’s Bank Tax Policy Shift

• Australia’s conservative government imposes $6.2 billion in new levies over four years on the country’s five major banks, an unusual move for conservatives forced by popular pressure (“the mass of the Australian people want to see some real changes”—Wolff, 03:27).
• Insight: Even conservative parties are adapting under global discontent with economic inequality.

B. Dakota Access Pipeline: Economic Dimensions

• Foreign banks (ING, DNB) withdraw funding from the Dakota pipeline due to public pressure; some US cities cut ties with Wells Fargo.
• Highlights banks’ roles in controversial projects and the intersection of finance, ethics, and indigenous rights.
• Wolff criticizes US banks, especially Wells Fargo and Citibank, for ongoing support: “The same stunning leadership that led them to phony up all those accounts is also driving the decision to keep funding the Dakota pipeline…” (09:15).

C. French Election: Macron and Growing Worker Discontent

• Macron wins the presidential election, but only 43% of eligible French voters chose him; the rest abstained or voted otherwise—reflecting massive political dissatisfaction.
• Wolff draws parallels to other Western nations, noting that socialists like Macron often merely support capitalism with better safety nets (“Most socialists… really believe in capitalism; they just think that there should be a good safety net”—16:38).
• The looming question: Will working classes go left (systemic change) or right (nationalism, anti-immigration)?

D. US Estate Tax Debate

• Estate tax only affects the wealthiest 1% (5,200 estates in 2016; 54 farms/businesses impacted).
• Wolff debunks myths about small family farms, exposing the estate tax debate as a “fantasy” driven by politicians seeking to aid the super-rich (“the obliteration of the estate tax gives the lie to all of that”—23:14).

E. The Problem of Monopolies and Corporate Power

• Recent big mergers highlight increasing concentration of ownership (Sinclair–Tribune, Coach–Kate Spade).
• Wolff references Warren Buffett’s critique: taxes on corporations decreased from 4% to 2% of GDP, while healthcare costs soared from 5% to 17%.
• Wolff: The US medical sector acts “like a coordinated monopoly—what we ought to call the medical industrial complex” (27:06).
• Bigger picture: Growing monopolies exemplify how “the capitalist system as it normally works is not working for the majority of the American people” (28:40).

2. Main Interview: Why Worker Co-ops? (Jessica Gordon Nembhard)

(30:01 – 58:08)

A. Personal and Academic Path to Worker Co-ops

(31:49 - 33:47)

• Gordon Nembhard’s background: lifelong interest in economic justice, influenced by activist family; studied the co-op model after realization that mere “community development” wasn’t enough.

“You can't really achieve political or social justice without economic democracy.” — Jessica Gordon Nembhard (31:52)

• Discovering worker ownership as transformative—puts control in the hands of workers, not just communities.

B. Transition from Capitalism to Worker Co-ops in the US

(33:47 - 38:05)

• The Clinton era’s “new economy” did not benefit communities of color.
• The Great Recession led many to question capitalism itself: “the solution is not to get our foot into capitalism… our real challenge is to create new things” (35:51).
• The US is behind in adopting worker co-ops but the movement has gained momentum since the 2000s, especially by sharing best practices (e.g., Eastern Conference for Workplace Democracy).

C. The Historical Relationship: Worker Co-ops & African American Communities

(38:05 - 43:55)

• Historically, African Americans embraced consumer co-ops but had strong, pivotal moments in worker co-ops, particularly in the 1880s and again during the Great Depression and 1960s.
• The 1880s: Integrated labor, populist, and co-op movements (“Colored Farmers National Alliance and Cooperative Union is the largest black organization. And it’s a credit union, co-op developer… and labor union”—40:37).
• Progressive integration and economic organizing crushed by Jim Crow and white supremacy, but pockets of co-op activity survive and re-emerge in times of crisis.
• Black Lives Matter and contemporary movements are revisiting co-op economics.

D. Working Examples of Successful Worker Co-ops

(44:33 - 50:39)

• Cooperative Home Care Associates (South Bronx, NY): Nearly 1,700 worker-owners, primarily women. Provides wages, health care, job mobility, and profit dividends. “Our largest worker co-op… in a low-skill job, upping the quality of the job and the quality of care” (45:18).
• Arizmendi Bakeries (Bay Area, CA): Network model where each successful cooperative helps finance and mentor new co-ops—modeled after Mondragon in Spain.
• Opportunity Threads (North Carolina): Worker-owned sewing factory utilizing local skills and fair-trade cotton—a revival of jobs lost to offshoring.
• Green Worker Co-ops (South Bronx): Nonprofit developer focused on launching “green” worker co-ops through training academies.
• New Era Windows (Chicago): A factory conversion story—workers took over a closing factory to form their own cooperative.

“I have not found any industry that we couldn’t have a worker co-op in.” — J. Gordon Nembhard (50:37)

E. The Adaptive Capacity and Principles of Co-ops

(50:39 - 54:38)

• Co-ops have multiple viable organizational models and can scale up (e.g., Mondragon has grown from six to 100,000 workers).
• Key principles: democratic ownership, participation, community rootedness, and inter-cooperation.

F. Co-ops & Community Responsibility

(52:18 - 54:38)

• Co-ops are more locally rooted: “If you want there to be corporate responsibility… the worker co-op is also a way to build much more rootedness…” (52:18).
• Co-ops show “evidence of giving back,” whether by hiring locally, sharing spaces, supporting local economies, or environmental stewardship.

G. Leadership Development & Civic Benefits

(54:38 - 54:57)

• Co-ops foster broad leadership and civic engagement, financial transparency, and skills that spill over into wider community—potentially leading to more engaged citizens and participatory democracy.

“We find that worker co-ops develop leadership in all kinds of ways that you really don't get in any other situation.” — J. Gordon Nembhard (54:16)

H. Worker Co-ops in Prisons: The Next Frontier

(55:39 - 57:19)

• Nembhard highlights co-ops among incarcerated people (e.g., in Puerto Rico), noting their empowerment, financial benefits, and skills development, and suggesting such models could help reduce recidivism.

“Another way to transform society is to think about another marginalized group, which is in prison... the worker co-op model is just—there’s so many applications…” — J. Gordon Nembhard (56:19)

Notable Quotes & Memorable Moments

• “This is like being on a train heading right into a stone wall, and all the people pretending none of that is happening.” — Richard D. Wolff on politicians ignoring working-class anger (20:37)
• “Most socialists in European countries, this majority group, are really quite like the Democrats here… only a minority want to go beyond it.” — Wolff (16:52)
• “We need something new… the solution is not to get our foot into capitalism… our real challenge is to create new things.” — J. Gordon Nembhard (35:51)
• “Natural allies… the union said we fight for a better deal with the employer, but the best thing for us would be if we were our own employers…” — R.D. Wolff (42:07)
• “If you want there to be corporate responsibility… the worker co-op is also a way to build much more rootedness…” — R.D. Wolff (52:18)
• “Worker co-ops develop leadership in all kinds of ways that you really don't get in any other situation.” — J. Gordon Nembhard (54:16)
• “Another way to transform society is to think about another marginalized group, which is in prison... the worker co-op model is just—there’s so many applications…” — J. Gordon Nembhard (56:19)

Timestamps for Key Segments

• 00:00 – Economic updates (Australia, Dakota pipeline, France, estate tax, monopolies)
• 30:01 – Introduction to Jessica Gordon Nembhard
• 31:49 – Nembhard’s path to worker co-ops and economic democracy
• 38:53 – The historical Black experience with co-ops
• 44:33 – Contemporary examples of worker co-ops
• 50:39 – The adaptability and scaling of co-op models
• 52:18 – Worker co-ops’ community and social benefits
• 54:16 – Leadership development in worker co-ops
• 55:39 – Worker co-ops in prisons: potential and impact

Conclusion

This episode of Economic Update makes a persuasive and accessible case for the viability, necessity, and creative adaptability of worker cooperatives as a solution to economic inequality and alienation, both in the United States and globally. Through history, present examples, and a focus on marginalized communities, Wolff and Nembhard illustrate worker co-ops' unique ability to empower individuals, develop leadership, foster civic engagement, and root enterprises in their communities.

For more resources and details about worker co-ops, listeners are encouraged to visit democracyatwork.info and jessicagordonnembhard.com.