How Creative Finance Launched Worker-Owned Co-ops In Post-Sandy New York

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from YES! Magazine:



In November of 2012, a month after Hurricane Sandy hit Far Rockaway, a neighborhood in Queens, New York, 10,000 residents were still living without power. The neighborhood, located on a peninsula less than a mile wide, with Jamaica Bay on one side and the Atlantic Ocean on the other, was devastated by the storm and more than half of its local businesses remained closed long after Sandy struck.

“It looked like a nuclear bomb had hit. I’d never seen that kind of destruction before,” said Henry Lezama, a construction worker and Far Rockaway resident of 14 years. He took his family to a local church where others had gathered for aid and shelter. That’s where he met organizers from Occupy Sandy and The Working World, an organization that provides low-interest loans and technical support to cooperatives. “They were talking about ways to restore the community,” said Lezama. “They said they could help us start a co-op.”

Lezama was hesitant about the idea at first. He had already attempted to start his own construction business once, but found the paperwork and bureaucratic process difficult and expensive to navigate, leaving him unlicensed and with a limited pool of customers.

A co-op, however, held the promise of job stability and better wages; he would get a say in how many hours the co-op took on and his co-owners would be people from his own community. The Working World gave him and four others the start-up money. They used it to start a construction cooperative called Roca Mia.

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[font size="4"]A different form of finance[/font]

Martin refers to traditional lending as “extractive finance”: a system where lenders benefit from projects they are financing without any responsibility to the borrowers. It’s a way for banks to protect themselves from risk; but for new businesses on shaky legs, it means putting everything on the line.

That’s what Martin saw in the early 2000s, when Argentina’s economy had taken a nosedive. A recession had driven out investment and closed the doors of many small businesses and factories. At the worst point, unemployment rose to 20.8 percent. Left without jobs, workers across the country decided to take matters into their own hands and reopen businesses as cooperatives. ................(more)

http://www.yesmagazine.org/issues/the-debt-issue/from-wall-street-to-worker-owned-how-creative-finance-brought-co-ops-to-post-sandy-new-york-20151030

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