The U.S. is slowly recovering from the economic turmoil caused by the COVID-19 pandemic. The crisis exposed fundamental flaws in the economy, with consumers staying at home during the pandemic, many businesses have been forced to close permanently. High rent costs, inability to cover payroll, inadequate governmental aid, restrictions on capacity, and more has caused a record number of business closures and instability. In a new article for Fortune, authors Katherine Chen and Victor Tan Chen explore cooperatives as a solution to safeguard businesses from future crises.
The authors point out, “Sociologist Marc Schneiberg finds that counties with more cooperatives, credit unions, community banks, nonprofit organizations, and universities experienced fewer job losses during the Great Recession and greater job growth in its aftermath. This path-breaking finding suggests that such organizations are better able than their shareholder-owned counterparts to retain workforces when the economy falters—and more willing to invest in their communities when markets pick up again.”
As Congress and the Biden-Administration consider a new path forward to rebuild the country, cooperatives have become a popular suggestion for everything from the home care crisis to infrastructure. NCBA CLUSA President and CEO Doug O’Brien writes, “As people look to address today’s generational challenges of inequality, racial inequity and climate change, it is time to once again focus on how cooperatives are a preferred strategy. This is because cooperatives are owned and controlled by, and benefit the people who use these businesses. In other words, community members who are rooted in their local economy are in the driver’s seat—not outside investors and anonymous corporate executives.”