Employee-owned businesses could spur north country economy

It only takes “a handful of people” willing to rally others around a vision to begin to transform a local economy,” O’Brien said. It only takes “a handful of people” willing to rally others around a vision to begin to transform a local economy,” O’Brien said. At an event in New York state’s north country on Monday, NCBA CLUSA president and CEO Doug O’Brien made the case that worker co-op conversions could be the key to more vibrant local communities. The event—slated to include Sen. Kristen Gillibrand until an ice storm changed her plans—highlighted the role of employee-owned businesses in jumpstarting the region’s economy. The Watertown Daily Times published this report:

The north country’s struggling economy could be spurred by developing a broader sector of business cooperatives and employee-owned workplaces, according to a national expert in the field.

Doug O’Brien, president and chief executive officer of the National Cooperative Business Association CLUSA International, gave the keynote presentation at Monday’s 16th Annual North Country Symposium at St. Lawrence University’s Eben Holden Conference Center.

About 100 of the 160 people who registered attended the daylong event, called “Owning Our Future in the North Country.”

Icy road conditions kept some from attending, including U.S, Sen. Kirsten E. Gillibrand (D-NY) who was scheduled to speak. The senator cancelled because the runway at the Ogdensburg International Airport hadn’t been de-iced, according to James Shuman, chairman of the symposium steering committee.

“We all know there are four seasons in the north country: early winter, winter, late winter and next winter,” Mr. Shuman joked.

Based in Washington, D.C., Mr. O’Brien advocates using a cooperative business model to empower people in their businesses and their communities.

Cooperatives, he said, can be especially effective in rural areas that face aging populations and the closing of small businesses that don’t have people to take over when owners retire.

Based on his travels and observations, Mr. O’Brien said the difference between rural communities that are stagnant and those that are vibrant always comes down to one variable: people. 

“A lot of times, it was just a handful of people who were willing to take the entrepreneurial risk, put themselves out there, spend their time and their social capital to try to rally people around a vision," he said. "Over time, these people and a broader set of people make a real difference in the place.”

Moving business ownership closer to the people who use or work at the business has several advantages, he said.

Developing employee-owned home care businesses is one opportunity for the north country that’s been successful in other areas, he said. In other places, the result was increased pay, less employee turnover and better quality service, he said. “We see this as a great opportunity." 

Other possibilities for cooperative or employee-owned businesses could be related to electricity, including renewable energy.

The north country already has food and agricultural cooperatives, such as Agri-Mark and other businesses that are owned fully or partially by employees including Nicholville Telephone Co., Stewart’s, Ace Hardware and True Value are other examples mentioned by Mr. O’Brien. There are also employee stock ownership programs.

The north country can expand the number of purchasing cooperatives, worker-owned manufacturing facilities and agricultural cooperatives, Mr. O’Brien said. Giving an example, he said a group of churches in Washington, D.C. combined to create a cooperative and obtained an agreement with a solar company. The installation of solar panels has eliminated electrical expenses for most of the churches.

“That happened because of the use of a cooperative,” he said.

O'Brien said it’s also important to advocate for federal policies that provide incentives for cooperatives.

“How do we enable the environment so that more people can own the businesses that they use here in the north country? A lot of it is federal policy,” he said.
Historically, three sectors of the economy were the first to widely embrace cooperatives: agriculture, electricity and credit unions. Changing economic condition and the political upheaval in federal politics now make it favorable for employee-owned businesses to succeed, Mr. O’Brien said.

“The economy is changing so fast and people don’t feel like they have a handle on what’s happening,” he said. In many small towns, businesses may close after an owner retires because no one steps forward to take over because no one in the community has the necessary capital. 

One solution, known as “worker co-op conversion,” involves having employees buy, own and control the business.

The symposium also featured panel discussions with four cooperative executives and employee stock ownership executives. They included Gael Orr, communications and marketing manager for Once Again Nut Butter, a fully employee-owned workplace in Livingston County that makes organic peanut butter and other products.

Other panelists were Melinda Little, co-founder of Saranac Lake General Store; Karen M. St. Hilaire, co-founder of the North Country Showcase; and Dan Maitland, district manager for Stewart’s Shops.

—This article was originally published by the Watertown Daily Times. 

 

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