Santa Clara To Help Local Businesses Create Worker Cooperatives

By Robert Haugh

Last year, the City held a study session on worker cooperatives. The idea started with Kirk Vartan, the founding owner of A Slice of New York (ASONY), who approached Mayor Lisa Gillmor. ASONY became a worker cooperative recently.

Now the City will help other small businesses do the same if the owners and employees have an interest.

“Small, locally owned businesses are essential to Santa Clara’s economy and community vitality,” said Santa Clara Mayor, Lisa M. Gillmor. “Now, more than ever, solutions are needed that create economic resiliency for workers and local economies.”

Project Equity and the Democracy at Work Institute will run the effort.

Here’s what a City press release shared about the research they’ve done:

“Project Equity analyzed data on privately-held businesses located in the City of Santa Clara that have employees and are 20 or more years old to illustrate the impact if these businesses are not retained. With COVID-19, more owners might accelerate their exit from a business because it could take months to return to a normal level of operations.”

“The study found that there are 1,138 companies in the City of Santa Clara that have been in business for 20 or more years, yet they employ an estimated 33% of the City’s private-sector employees (20,000) and generate about 57% of small business revenue ($6.2B).”

That’s less than 20 percent of the total businesses in the Mission City. But that’s still a lot of people and dollars.

“This data study, along with previous research that estimated 80% of business owners do not have succession plans, demonstrates the importance of reaching Santa Clara’s small business owners to help them understand their succession and selling options,” said Hilary Abell, co-founder, Project Equity.

A study conducted by Rutgers University found that, during the COVID-19 pandemic, worker cooperatives were more likely to retain staff, maintain worker hours and salaries, and protect their worker’s health and safety standards.

“People are looking for solutions. The worker cooperative sector has a solution,” said Melissa Hoover, Executive Director for Democracy at Work Institute. “In supporting succession pathways which include worker-owned cooperatives, we also support an economy where working people own their jobs, communities own their assets, and we all participate in the decisions that matter. This solution must be integrated into long-term recovery efforts.”

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