Economics From the Bottom Up: Designing Strategies, Making Alternatives

Springfield's Wellspring Collaborative worker-owned upholstery shop brings jobs, training

Talking with Emily Kawano, Co-Director, Wellspring Cooperative Corporation

Interviewed by Steve Dubb, Research Director, The Democracy Collaborative

March 2015

Emily Kawano is Co-Director of the Wellspring Cooperative Corporation, which is seeking to create an engine for new, community-based job creation in Springfield, Massachusetts. Wellspring’s goal is to use anchor institution purchases to create a network of worker-owned businesses located in the inner city that will provide job training and entry-level jobs to unemployed and underemployed residents through worker-owned cooperatives. Kawano also serves as Coordinator of the United States Solidarity Economy Network. An economist by training, Kawano served as the Director of the Center for Popular Economics from 2004 to 2013. Prior to that, Kawano taught economics at Smith College, worked as the National Economic Justice Representative for the American Friends Service Committee and, in Northern Ireland, founded a popular economics program with the Irish Congress of Trade Unions.

Could you talk about your background and how it led to doing economic justice?

I have been interested in social justice and economic justice issues from a young age. I decided to go to graduate school in economics because it seemed like something that I couldn’t learn on my own. I wanted to get a background in economics in order to be a more effective activist. But while I did some teaching, I found that there was a continual pull back to activism and being involved in a social justice organization.

While I was in graduate school at UMass, Amherst, I joined the Center for Popular Economics, which is a collective of economists. Our target audience is grassroots organizations and activists who can be more effective by understanding the economy. I have been a member for about 25 years. When I finished graduate school, I worked at the American Friends Service Committee, doing economic justice work. Then I did popular economics education work in Northern Ireland for five/six years.

When I came back to the United States, I became the director for the Center for Popular Economics. At that time, we went through a strategic planning process and we decided to focus on the need for examining economic alternatives. We realized that the Center does a great job critiquing the capitalist economic system but at the end of the day, often people felt discouraged in the face of this seemingly monolithic system and seeing no viable way out. If you don’t help people see and explore the practical economic alternatives, then there is a danger that people feel hopeless. So we started looking much more seriously at what we first called economic alternatives and we ended up embracing the framework of solidarity economics. It is grounded in the democracy, sustainability, solidarity and equity (in all dimensions)– it is not a one-size-fits-all strategy. It can accommodate many views. We worked on developing an analysis and relationship with solidarity economic. The Center for Popular Economics was at the center of founding the US Solidarity Economics Network at the 2007 US Social Forum in Atlanta. It has been an important part of my work—going from education that was primarily focused on critique to a much more balanced approach that provides both the critique and the solutions.

What led you to work in Northern Ireland?

It involved personal reasons. My partner was covering Irish events for a Boston newspaper. We moved to Belfast in 1998. We had a 3-month old baby and I was taking maternity leave. So it was a good time to transition. While I was in Northern Ireland, I developed a relationship with the Northern Ireland Committee of the Irish Congress of Trade Unions, which is their equivalent of the AFL-CIO. I began working with their education director, which was a great relationship. We did a lot of work with the unions and local community economic development organizations. I also worked in the south of Ireland as well women’s economic development groups in Europe.

I was part of the Northern Ireland Social Economy Network, which was my first exposure to the social economy, which is a sector of the economy that includes enterprises that are collectively owned and managed. The common definition of the social economy includes cooperatives, mutuals, associations and foundations, which is sometimes referred to by the acronym CMAF. There are different definitions but this is pretty common.

People sometimes think social economy and the solidarity economy are the same but they are different. Social economy is a sector and is not necessarily about system change. It can be promoted as one of the pillars of capitalism. It can be seen as ameliorating some of the problems of capitalism such as delivering social services, or employing people with disabilities, or away to create jobs for hard to employ people so they can transition to capitalist businesses. At the other end of the spectrum of social economy practitioners it is seen as a step toward transitioning the political and economic system.

The solidarity economy is about transformation of the system, based on principles of democratic ownership, equity in all dimensions (race, class, etc.), sustainability and democratic decision-making and control. The focus is on all spheres of the economy including production, distribution and exchange, finance, consumption and governance. Transforming the entire economy system is what the solidarity economy is about, which requires building practical, on-the-ground alternatives.

Could you describe the role played in this work by the Center for Popular Economics that you used to direct?

We were one of the founders of the US Solidarity Economics Network at the 2007 Social Forum in Atlanta. The Center for Popular Economics agreed to provide some core staffing to help build out that work. At the time, I was wearing the hat of the director of Center for Popular Economics and of coordinator of the Solidarity Economics Network. It was an important role. The network needed some staff to coordinate the network. After a while we did get a bit of funding to help support our work of covering that role.

What is the current breadth of activities for the US Solidarity Economics Network today?

What we’re focused on now is a North American Social Solidarity Economy Forum in the spring of 2016 in Detroit. The last time we organized a national conference was in 2009 at the University of Massachusetts, Amherst, which brought together 400 people. It was a great event and the energy and enthusiasm was really high. It did generate some spin-off organizing. Solidarity New York City, for instance, drew inspiration from that event and formed their network after the conference. In Worcester, Massachusetts, not far from where I work today, the SAGE (Solidarity and Green Economy) Coalition coalesced out of that meeting. So there were lots of seeds that were planted.

We are excited to now put together a North American Solidarity Economy Forum. This event will include both the United States and Canada and we will make a great effort to make sure the Mexican solidarity economy folks are present. Mexico has opted to work with the Latin America and Caribbean section, for both linguistic and cultural reasons. We want to ensure they are a strong presence nonetheless. That will be a major area of focus. We would like to have a number of gatherings and meetings leading up to the international conference. For example, I am working on solidarity economy education and anticipate pulling together a number of meetings in the lead up to the Forum to lay the groundwork for concrete outcomes.

I will mention another project that is connected to solidarity economy. We are working on mapping the solidarity economy. There is a team of four academics and myself who are involved. We got a National Science Foundation grant to do the mapping, as well as other kinds of solidarity economy research, such as an estimation of economic impact, GIS (geographic information systems) analysis, and qualitative interviews.

The map of the solidarity economy aims to raise its visibility, promote the growth of solidarity economy supply chains, allow consumers to find solidarity economy providers and generate data for researchers interested in solidarity economy. We are building a website that will link up with a global solidarity economy map and are working closely with people doing mapping in other countries. Italy and Brazil are models for what we are working on.

I would like to switch gears now and talk with you more about your local work with the Wellspring cooperative network that you are seeking to build. Could you talk about the factors that led to its formation?

We started four years ago with the idea of creating a collaborative of anchor institutions, labor and community organizations to develop a network of worker owned cooperatives for underserved communities in Springfield, Massachusetts. We are now incorporated as the Wellspring Cooperative Corporation. We drew a lot of inspiration from Evergreen. We reached out to the major institutions and all of them were pretty receptive. We also connected with Ted Howard [Executive Director of The Democracy Collaborative] very early on. And we had him come and make a presentation on the Collaborative’s work in Cleveland, which was very important. The Cleveland example made people feel that developing employee-owned cooperatives in Springfield wasn’t completely a pipedream. In the spring of 2012 we brought a delegation of 18 people from Springfield to Cleveland. That again was very important.

From the get-go, we set a table for anchor institutions, community organizations and labor groups. Given that Springfield is a mid-sized city, we don’t have any foundations with the deep pockets of the Cleveland Foundation. We build on the Evergreen model, but our path has been different. For example, we’ve started on a smaller scale and have had to leverage existing opportunities.

For example, our first business is an upholstery co-op. It comes out of a partnership with the local jail, which has an upholstery shop inside and was looking for someone who could establish an upholstery shop where some ex-prisoners could get employment. It seemed like a good opportunity and at the same time could meet anchor institution needs around upholstery. And it was relatively low capital intensive. We were lucky to find a skilled upholsterer who was on board with the vision.

When did the business open and how many people does it employ?

The upholstery co-op was launched in mid-December 2013, but really 2014 was the year we really got our business under way. We had our first profitable quarter in August. Up until very recently, we have had five workers.

We have had some turnover due to issues around job performance. One of the challenges with upholstery is that it is a very specific skill. Our skilled upholsterer says that people either have “magic in the fingers” or they don’t. It involves being able to do very fine work, very precise. It is patient work. It requires attention to detail and just having a feel for it. I would never have imagined that upholstery production takes such very specific skills, but it does. Not everybody is an upholsterer. We have had a number of people who have washed out because they just don’t have that magic in the fingers. If all we were doing was the most simple upholstery, say, auditorium seating, we would be fine. But we have a mix. Some of our jobs are hospital recliner chairs, with lots of tricky matching patterns. You need to have a much higher level of skill for that. And not everybody has the potential.

So finding people with the right aptitude and a team that gels, securing enough work, getting productivity up to a good level, these typical start-up issues has been challenging. We are happy that we turned a corner in August from struggling on all fronts to still struggling, but definitely feeling that we are on target with projections. The business started turning a profit in the third quarter of its first year, which is pretty good.

What is the level of worker-owner participation in business decision making and what do you do delegate to a professional basis?

People who are hired at Wellspring come on, on a trial basis, for at least a month. If they pass that, they are on the worker-owner track. They are eligible to become a worker-owner after a year. We have one person who has been on staff for over a year and has now become a worker-owner. He is involved in the board meetings and the small huddles on management decisions.

We hired a manager, Evan, who has been in the business for 30-40 years. He ran his own upholstery shop. The one person who has become a member-owner is now part of the decision-making process though because Evan has this depth of experience, clearly he still has the final word on a lot of things. He is formally the manager.

That said, we do meet every week with all of the workers and there are a lot of the things that we try to decide jointly. We talk about policies like talking on the phone, distractions that come from listening to music with your ear buds. We talk about all kinds of things – what if there is a slow down and not enough work, how do we handle that? Even though people are not officially members, we are trying as much as possible to build that experience and give them decision-making power.

Could you talk about the role of anchor institutions at Wellspring?

We spent quite a while, maybe six months to three quarters of year, doing research on anchor institution purchasing and met with purchasers. We looked at whole array of ideas: the idea of a laundry is still alive and we’re looking at a partnership with folks in Greenfield, Massachusetts. Food is something that from the get-go, the anchor institutions have been interested in. The second business in the pipeline is a hydroponic greenhouse, although on a much smaller scale than Evergreen. Baystate Health is really keen on local, fresh, and hydroponically grown produce. So they have been really supportive.

On a broad level, anchor participation has just been critical for making the whole initiative believable, which was is really important. There are a few key ones: STCC (Springfield Technical Community College, the University of Massachusetts, Amherst (even though they are not in Springfield), Western New England University, and Baystate Health. Baystate and STCC in particular have been important and strong supporters. They are very well respected and influential members of the Springfield community. It was really critical to have their support.

How have you financed the upholstery co-op?

It was a mix of some loans, some grants, some private social investment and patient capital. The private equity investment is treated as non-voting shares, essentially preferred shares. Outside equity investors do not have a vote or decision-making authority.

How much money did you raise to launch the upholstery business?

It was a fairly modest amount: about $160,000. For the greenhouse, we are looking at more like $2 million with the same kind of mix of financing sources. We have identified a group of lenders and investors and have talked to all of them. The financing door is open. We have been talking to the same social investment firm that helped out with the Upholstery Co-op. And there are a number of foundations that we have identified and had preliminary conversations with some of them.

We are finding the site question to be challenging. We have finished the business plan, which is very detailed, but we can’t raise the capital until we have a site. We are very interested in a 6-acre site. It has lots of room, not only for a greenhouse but also a bio-digester that might provide energy for the greenhouse and maybe for the grid. It’s possible that we would build it with enough capacity for organic waste disposal, which is being phased out of landfills in Massachusetts. We are looking at food processing facility. That kind of thing would be great for a 6-acre site. The complication is that it’s a brownfield; there used to be auto salvage and metal recycling there. The city owns it and is doing a Phase I environmental assessment. Then there is a Phase II assessment and remediation. This is likely to take at least a year. So we are looking at a smaller site to start with, closer to downtown, to build the initial greenhouse and hopefully by the time we are ready to expand, we will have settled things with the larger site.

How are using your popular education experience and knowledge to build the cooperatives?

In the weekly trainings at the upholstery shop, we are using a popular education approach to the training as much as possible. Our discussions build from their experience and explore topics that are relevant to developing a cooperative way of working. In terms of popular economics, we certainly want to include some analysis of where this fits into the big picture – worker ownership as an alterative strategy of economic development and promoting a democratic practice that encourages people to become active decision-makers. I would say we have so much practical stuff to deal with, we really haven’t spent much time on this front, but we want people to have a sense of the larger cooperative movement as well as of the cooperative movement as part of a broader social movement to give birth to a more just and sustainable world. But for the time being, we have done more about the basics of what is a worker co-op, its history, breaking down the financials of specific jobs, workplace policies, and conflict resolution.

Even with the practical work, are there tools from your popular education work that you find applicable?

Yes, absolutely. We break down the financials in a participatory way. We did an analysis of one job where they were just starting. Rather than the manager just telling them how long each component of the job should take to do, we asked them what they thought. Then they hashed it out with the manager. It was very participatory. And we engage with workers in problem solving, very much in the popular education mode. We supplement that with outside expertise and we have talked about bringing them to visit some of the longstanding worker co-ops in western Massachusetts. We are also planning on bringing folks to the Eastern Conference on Workplace Democracy in Worcester, which is close by, so that will be a great opportunity.

How have you dealt with workforce development challenges?

We have been working with the Hampton County Regional Employment Board or REB. They do workforce development. They were very helpful with navigating the process to access OTJ (on-the-job) training funds, which were critical in the early start-up phase. They have also been useful in helping us figure out the Work Keys system of assessing whether someone is a good candidate or not. The next time we hire a worker, we will apply that. The framework assesses conceptual skills, fine motor coordination, spatial skills: we will give it a try and see how it works. Otherwise, it means trying people out for a while until our manager Evan can make a well-informed decision about their potential.

Could you talk about some of the partnerships that you have developed?

We have worked a little bit with TESA (Toolbox and Education for Social Action) and have had conversation with CDI (Cooperative Development Institute). The ICA (Industrial Corporation Association) group has provided a lot of assistance with business plans and financial assessments. They have been great, working as a mentor more than a consultant. They have helped us build our capacity, so that has been an important relationship. We have also had a close relationship with Cooperative Fund of New England and they represented on our Board. We got a loan from them for the upholstery co-op. They have been helpful connecting to the cooperative world in general. There have been been many really useful relationships with organizations that have been supportive.

Have you enlisted local government support for your cooperative development work?

We got some funding from the city for the Upholstery Co-op, a small business grant. The City’s Economic Development Department has been supportive of the greenhouse. They actually agreed to take on the cost of Phase I environmental assessment for the 6 acre parcel which is very helpful. We have also been working pretty closely with Patrick Sullivan, the city’s director of recreation and facilities (parks and school facilities). He has been helping us to find a site. We may do at least some of the greenhouse development on parkland. Part of the plan, for example, is to develop a community and educational greenhouse. We have been exploring doing that with the parks. We’ve also been talking about getting the possibility of working with a big tree company that is looking at the adjacent parcels to the 6-acre site that we are interested in. This tree company is thinking about putting in a facility that would process the City’s tree waste. Patrick Sullivan is putting together a meeting with them, which might possibly lead to a bio-char facility.

What is bio-char?

It is almost like making charcoal. At the very least, it is a strategy for sequestering carbon. When you bury it, it is incredibly good for the soil and at the same time removes carbon from the atmosphere. There is cutting edge technology that is being used to not only produce bio-char but also generate energy. This is very new technology, but this is a possibility. We were interested to see if organic waste can be used for bio-char but we learned that it isn’t suitable so we had shelved that idea. With the possibility of a woody source of fuel, we are re-visiting the idea. It is just an example of the enthusiastic response we have gotten from different quarters of the city.

How else has government supported your work?

There is a nonprofit, almost semi-public organization called “Develop Springfield” – they are very closely tied into the city. They also have been worked with us to identify and tour sites for the greenhouse. The Mayor has been supportive and come to our events and the Springfield Department of Economic Development has been supportive in helping us look at sites. We received quite a positive response to our letter of inquiry regarding the 6-acre site. It’s been sitting vacant for quite a few years.

On a regional level, we have worked with the Pioneer Valley Planning Commission on site issues as well as on the issue of food and building a sustainable regional food system. On a state level, we have connected mostly around food. Sustainable food system work is being supported by a state initiative and we work with the western Massachusetts local initiatives. In the beginning, we had a lot of contact with the Boston Federal Reserve. They were interested in Wellspring as they have a focus on some special projects in Springfield. They were coming to meetings and we went out and met with them. Certainly they have been supportive in whatever ways they can, and included Wellspring in their research and publications.

What do you see as the potential of Wellspring and the US Solidarity Economics Network going forward?

For Wellspring, the hope is to create a lot of businesses – dozens of businesses and hundreds of jobs. The upholstery cooperative is exploring producing meditation cushions and animal pet beds that could also use up leftover fabric. Inevitably the sales go up and down and there are going to be slow periods. If we had a product that workers could continue to make during the slow periods, we could keep them busy all the time. One of the workers has been developing a prototype, which is almost ready to shop around. Alongside the greenhouse, we are also projecting developing alternative energy production, food processing and a food service. Other spin off ideas include transportation for the businesses, back end business support like bookkeeping, database management and the like.

Some of the businesses that we are developing have been spawned more spontaneously. My co-director Fred Rose has a relationship with a group that does landscaping at a big company. They are interested in starting their own cooperative business. We have had discussions about whether it would make sense to be part of Wellspring and how we can assist in that business development. In cases like this, we are not taking all of the initiative of building the businesses but rather aim to provide support to new start-ups businesses and bring some of them into the Wellspring network.

It is really exciting how receptive everyone has been—from the institutions to the city level to the community and labor organization level. The biggest challenge is people finding the time to engage. We have pretty much encountered nothing but positive reception and openness to an extent that was surprising, but pleasantly surprising.

In terms of the US Solidarity Economy Network, I see my work with Wellspring as part of building the solidarity economy. And for me it is nice to be grounded in the actual practice of at least a piece of the solidarity economy. It is about marrying the theory with the practice and continually learning from both aspects. This has been really important. I think there has been a lot of upsurge in activity around solidarity economy. Some people are using that terminology and some are not. Some might not be using the framework, but they are working in a specific sector. There has been growth in worker co-ops and food co-ops, and credit unions have been getting stronger. Community land trusts, the sharing economy, and social currencies are flourishing.

Participatory budgeting and the commons framework are spreading. Those are all practices that solidarity economy embraces: democratic and collective, hopefully pursing aims of equity and sustainability as well. In some areas, there are local movements that are using solidarity economy as their framework. This is true in Worcester, New York City and Boston. And in Jackson, Mississippi, Cooperation Jackson and that whole movement uses the framework of a solidarity economy. It is one of their pillars. Connected to that is the Southern Economic Grassroots Project. Elandria Williams of Highlander is one of the founders. She has been on the Solidarity Economics Network board for many years. The Southern Economic Grassroots Project has a focus on cooperatives, but they bring in the solidarity economy perspective as well.

In California, there are groups that use the solidarity economy, such as Community to Community in the Seattle area and a San Francisco Bay Area group called PODER (People Organizing to Defend Environmental and Economic Rights). They sent somebody to an international gathering in the Philippines last year. Compared to 2009, I think there has been a significant increase in grassroots engagement in the solidarity economy. I’m very excited about the 2016 North American Solidarity Economy Forum and having the continental Canadian and Quebec participation will be important.

Could you talk about the role of public policy in providing a supportive environment?

A lot of the public policy work related to the solidarity economy is sectoral— cooperatives, credit unions, sustainable food systems, for example. What we haven’t really yet engaged in, is following the lead of other countries to develop framework legislation – comprehensive legislation – to create a supportive environment for the social solidarity economy. Countries that either have or are in the process of developing framework social and solidarity economy legislation include France, Luxembourg, Portugal, Spain, Greece, Mali, Cameroon, Quebec, Brazil, Mexico, Colombia, Ecuador, Argentina and Honduras. Some of these countries such as France and Brazil have government ministries for the solidarity economy and others such as Ecuador and Bolivia have included solidarity economy in their constitutions. It certainly would be powerful if in the U.S. we could start pulling together sectoral policies and knit them together into a more comprehensive platform that supports whole system change rather than sector by sector.

If you were to highlight the key accomplishments of your work to date that you are most proud of, what would they be?

Well, I’m very proud of being one of the founders of the US Solidarity Economy Network and being one of the initiators of Wellspring. The Solidarity Economy Network is very broad— trying to pull together various sectors of the solidarity economy together—to encourage the various practices to recognize each other as being part of a common project to build a just and sustainable world. That work is very broad and somewhat more abstract. And Wellspring is very concrete, very practical, and seeks to primarily benefit under-served, low-income communities of color. I love that combination of broad and concrete. It can be exhausting, but it’s great.

Anything else you would like to add?

The US Solidarity Economy Network is very deliberate about thinking about race and class. Right now, a lot of alternatives are relatively ghettoized in relatively privileged, well educated, white communities. If we do not deliberately make sure that these models are relevant and workable in poor communities and communities of color, we are not really creating the systems change that we seek to achieve. That is really, really important. We recently organized a webinar entitled “De-colonizing Our Solidarity Economy” that addressed exactly these kinds of issues. I believe that we had around 150 people participate in that webinar. So it goes to show that there is tremendous interest and it’s important to continue to discuss and strategize on these issues.

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