Last December, in a spacious, carpeted conference room inside Navigant Credit Union in Central Falls, nineteen graduates of the second annual Cooperative Academy lined up to receive their certificates. Before posing for a picture and enjoying celebratory sandwiches, they listened to short speeches by Rhode Island State Senator Sandra Cano and Central Falls Mayor James Diossa, who spoke with energy about the importance of worker solidarity in the face of wage theft and discrimination. The Cooperative Academy, offering three-hour classes on cooperative formation every Saturday for both Spanish and English speakers, was completely free; the only requirement for entrance was interest in learning more about the alternative business model celebrated by the Academy’s organizers. The graduates, most of them residents of Central Falls, hailed from a variety of professions and cultural backgrounds, but they shared a common frustration with the exploitation within Rhode Island’s labor market and a belief that worker cooperatives could provide a crucial solution: “We are part of a new process,” said graduate Claudia Galeano, “that is turning employees into employers.”
The second annual Cooperative Academy, spearheaded by Central Falls-based workers’ rights organization Fuerza Laboral, has concrete aspirations for its graduates: it seeks to recreate the process of educating and organizing that led, last year, to the creation of Rhode Island’s first official worker cooperative: Healthy Planet Cleaning Cooperative (HPCC). According to Fuerza Laboral, whose organizing strategy includes legal, legislative, educational, and direct action tactics, a worker cooperative is a business where all employees, or “members,” share equal ownership of the business and equal voting power over its decisions. Within a worker cooperative, there is no structural hierarchy—no lower-paid employees and no CEOs—and no shareholders with voting power. Currently, HPCC services residential and office buildings in Rhode Island and Massachusetts. It owes its existence to both Fuerza Laboral’s first Cooperative Academy and new legislation that is redefining the possibilities for worker self-determination.
The passage of Rhode Island Senate Bill 676, whose stated purpose is to incentivize worker cooperatives, amended the legal definition of a corporation to include cooperatives—governed by members with one vote each—and granted these member-owners the rights of stockholders. As the first cooperative to be legally recognized in Rhode Island, HPCC represents a significant success in the expansion of an alternative, ethical economy through collective organizing. “Everybody should be looking at this new way to do business,” Raúl Figueroa, the Community Organizer for Fuerza Laboral, told the College Hill Independent, “It gives the power of the decision-making back to the people doing the work.” This newly-recognized business structure emerges from a long tradition of cooperativism in Latin America and offers Rhode Island a potentially more permanent solution to labor violations and economic injustice than the often frustrating strategy of legal and direct action tactics.
The need to implement ethical business models is a clear necessity within Rhode Island’s cleaning industry. The business, which employed almost 10,000 people in 2017 according to the Bureau of Labor Statistics, is characterized by a wide range of workplace violations. As Figueroa described to the Indy, there’s little job security within an industry that usually pays minimum wage; often, despite years of dedicated work for the same company, employees can be fired without previous notice. Fuerza Laboral also receives frequent complaints from workers of sexual harassment by employers, fellow employees, or those in charge of transporting workers to the houses or businesses to be cleaned.
There is also the problem, ubiquitous in a variety of industries throughout Rhode Island, of wage theft: the illegal practice of denying wages or benefits due to employees. For Oscar Leiva, co-founder of HPCC, the experience of wage theft was a catalyzing reason to join the cleaning cooperative; as he told the Indy, he simply didn’t want to participate in companies that robbed their employees. Heiny Maldonado, Executive Director and Co-Founder of Fuerza Laboral, also cited the problem of wage theft as contributing to Fuerza Laboral’s search for alternative business models. “Salaries provide the working class in Rhode Island with their provisions and sustains their dreams,” she told the Indy: “When their salaries are robbed, what are people going to eat?”
For years, Fuerza Laboral has received complaints of wage theft from community members who come to the workers’ center seeking assistance in recovering their stolen salaries. For undocumented workers, wage theft is especially prevalent, with employers often using documentation status as coercion. According to Figueroa, undocumented workers are less likely to come forward, pursue grievances in court, or do anything, for that matter, to raise their public profile.
Despite clarity within US labor laws about minimum wage and overtime pay, the legal process of recovering wages is usually difficult and lengthy. To ensure employer compliance, Fuerza Laboral also utilizes direct action tactics, staging protests to bring the corporate crimes into public light. In August of 2016, for example, the cleaning company Dependable and Affordable Cleaning Inc. refused to pay eight workers who had worked more than 40 hours cleaning student housing at Providence College, claiming both that the job wasn’t satisfactory and that the workers had never been hired by the company. In response, Fuerza Laboral organized a protest outside CEO David Civetti’s Johnston home and, when Civetti continued to deny wages, a second protest outside his Providence offices, which resulted in all eight workers receiving full pay. But, after many years of fighting the same abuses, this process can seem futile and systematically ineffective. “Personally, I felt like the firefighters,” said Maldonado. “You’re just putting out a fire here and there and the problem persists because, in the end, it’s a vicious cycle.”
For the organizers at Fuerza Laboral, the worker cooperatives they’ve been working to establish over the past five years present an alternative to the experiences endured in an unethical and discriminatory industry. Much of this effort has been legislative and culminated in the passage of Senate Bill 767 which establishes a “statutory vehicle” for cooperative businesses, allowing them the same powers, privileges, and restrictions as a business, including worker protections—such as temporary disability insurance, workers compensation insurance, and state unemployment insurance—and member rights as shareholders. (While Rhode Island cooperatives have the choice to allow non-members to invest in the company, this legal definition of a cooperative prohibits nonmember shareholders from voting.) And while it was not illegal to form a cooperative prior to this legislation, cooperatives then did not have state recognition and therefore did not have an identity around which to organize themselves. Alternative business structures without a binding state contract—such as a limited liability company (LLC) or a partnership—facilitate the easy dissolution of cooperatives and are not as successful in the bidding for state contracts.
Despite its perceived association with socialism, the legislation faced surprisingly little political resistance. This was due, in large part, to Fuerza Laboral’s educational campaign, intended to convince people across the political spectrum of the economic benefits of locally-run cooperatives whose business taxes would go directly to the state. After the passage of the bill in October of 2017, Fuerza Laboral conducted surveys to determine what potential industry would be most profitable in Central Falls, organized interested members through the first Cooperative Academy, and finally launched HPCC in May of 2018.
Outside of a distinct legal definition and structural organization, cooperatives are premised on a profoundly different set of values. According to Figueroa, “Cooperative values are straightforward. A cooperative is a business that is accountable to its members. It is not profit-driven. It gives everyone at the table a voice. The cooperative will serve the members, not outside investors.” A crucial characteristic of worker cooperatives, such as HPCC, is the opportunity for self-development. When one is working for a contractor, Leiva described, the work is very limited, the pay is low, and one is constantly under the direction of someone else. Within a cooperative, because employees control the future of the business, “You can develop yourself and protect your rights.” Workplace necessities, like workers’ compensation and other forms of insurance, that are often neglected by companies looking to cut costs are guaranteed with worker cooperatives. As Maldonado points out, “Workers who are also owners are not going to rob themselves.” Members can also undergo additional trainings and achieve additional certifications if they so choose. This structural difference is extremely powerful: as Daisy Salvador, another co-founder of HPCC, told the Indy, “I feel good saying that we have a business, that we bring work to other people, that we are not going to have bosses who disrespect us.”
The process of acquiring cleaning contracts, publicizing the cooperative, and achieving the necessary certifications has not been easy. Healthy Planet Cleaning Cooperative still boasts only a handful of members—all of whom work multiple jobs—and finding long-term cleaning contracts within an established industry remains difficult. (HPCC currently has only eight residential and three business contracts—relatively few for a company that hopes to provide full-time employment for its members.) The long journey towards the establishment of HPCC has required the support of many dedicated organizers, lawyers, and workers, including the POWER Network (People Owning Wider Economic Resources), which includes Navigant Credit Union, Rhode Island Small Business Development Clinic, the Center for Family Life, and the City of Central Falls, as well as Fuerza Laboral.The campaign also owes much of its public support to the Rhode Island Center for Employee Ownership (RI CEO), a volunteer organization that focuses on educating the public about the structure and benefits of worker cooperatives.
In addition to supporting Healthy Planet Cleaning Cooperative, the POWER Network is lobbying for a bill that would facilitate the transformation of local businesses into worker cooperatives; if passed, this legislation would establish a way for CEOs and business owners who want to retire (or who are facing bankruptcy) to pass on collective ownership to their employees. As Ellie Wyatt, a volunteer for RI CEO told the Indy, this would be an extremely important piece of legislation: “In North Providence, within a block, there was a deli and produce store that went out of business, Christiansen’s dairy went out of business, and a furniture store went out of business. Those are businesses that could have transitioned had people known about the idea.”
The formation of worker cooperatives as a response to economic injustice is not a novel idea. Instead, the organizers behind this cooperative campaign take inspiration from their countries of origin. Both of HPCC’s co-founders, Oscar Leiva and Daisy Salvador, first experienced cooperatives in Guatemala and Honduras, respectively. Leiva believes that witnessing the positive effect of cooperatives, a common business model across a variety of Guatemalan industries, has had a direct influence on what HPCC is trying to do. Figueroa, who learned about cooperatives growing up in El Salvador, traces their history from their European origins to their ubiquitous existence throughout Latin America. In El Salvador, Figueroa described˛to the Indy, there are farming cooperatives, coffee cooperatives, agricultural cooperatives, and fishing cooperatives which have “come out of communities in need.” The turn to cooperativism in Latin America comes from a history of economic injustice throughout the region. As Maldonado told the Indy, “We come from economies in crisis, from countries with broken economies. So in an organic, natural way, we have developed cooperativism for ourselves, which has allowed the economy be more sustainable and the community to thrive.”
Additionally, many of these cooperatives explicitly focus on providing childcare and family support, work that remains largely uncompensated and unrecognized within the labor structure of the United States. As Figueroa described, “All throughout Latin America, cooperatives are a whole community. Members have created schools and universities—a whole community of services—where you can feel comfortable knowing that your child is getting a free education and childcare. The cooperative is not focused on profits, but serving the community and the families of their members.
Echoing Figueroa’s description of the extensive welfare support of cooperative economies in El Salvador, Maldonado describes the extremely well-developed cooperatives that have existed for many years in Colombia. According to her, the ultimate goal of this cooperative campaign is to recreate this network of services within the Central Falls community. In a state that has failed to raise minimum wage to $15 an hour, ensure adequate public school education, or provide comprehensive childcare services, the search for alternative forms of support remains extremely relevant. And within an economy dominated by big business and characterized by labor violations, the need to create ethical business models is also pressing. The organizers and members of HPCC want to make sure that working—and living—in Rhode Island soon looks very different.
Interviews with Heiny Maldonado, Daisy Salvador, and Oscar Leiva were translated from Spanish by the author.
SARA VAN HORN B’21 is a card-carrying member of the Park Slope Food Coop.