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Are Co-ops the Solution to Occupy Wall Street Woes?
Alternative business model called mechanism for democratizing the economy
It's a business model in British Columbia that controls more than $10 billion in assets, employs 13,000 people and returns all profits to members. The model governs enterprises in banking, housing, retail and health care. Fully one-third of British Columbians are members in at least one of the 700 operations operating in this model: the co-operative.
For John Restakis, executive director of the B.C. Co-operative Association, co-ops are a mechanism for democratizing the economy, something the folks participating in Occupy Wall Street or Occupy Vancouver could turn to as a solution to their grievances.
"The whole point of Occupy Wall Street is reacting against corporate structure and the fact that people have no control over the economy is what's at the heart of it," Restakis said. "Co-ops are a concrete way to address that."
Co-op Week in B.C. runs from today until Sunday and the United Nations has declared 2012 the international year of the co-operative to raise public awareness of this alternative business model and its contributions to poverty reduction and job creation.
"Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility," UN SecretaryGeneral Ban Ki-moon said on the UN website.
Anyone can start a co-op and any type of business could potentially be established as one.
Co-ops really do come in all shapes and sizes. Some, like housing co-ops, provide lowercost housing to their members through partnership with the government, which provides low-cost mortgages and sometimes rent subsidies.
Others, like credit unions, return their profits to the community in the form of grants or modest dividends to their members. Still others are owned by their employees, and still others are large, for-profit food growers such as Ocean Spray, Welch's or Sunkist.
Some are consumer co-ops like the East End Food Co-op, which is open to all shoppers, but provides specific benefits such as discounts to members.
All co-ops require a share purchase to become a member, all of them have a board of directors and must hold an annual general meeting, and the members always decide what to do with the profits.
Vancity and Mountain Equipment Co-op are two of B.C.'s largest co-ops. Vancity, Canada's largest credit union, has 417,000 members and boasts $15 billion in member assets. The credit union returns 30 per cent of profits to members or the community, where a bank owned by shareholders might return one or two per cent to the community, Tamara Vrooman, Vancity chief executive said.
"When I go and get service at a publicly traded company, I know that I'm buying a service, but the benefit of that service ultimately is accruing to someone else - to a shareholder," Vrooman said. "The benefits for our members as customers and the benefits for our members as owners are the same, and that allows us to be more flexible, it allows us to put more money back into the community more quickly and it allows us to be more responsive to individual members' needs."
Mountain Equipment Co-op is a consumer co-operative, celebrating its fortieth birthday this year. The business has $261 million in annual sales and has 3.3 million members.
Restakis says co-ops are often on the vanguard of new ideas, citing the local, organic food movement and alternative energy as two areas where coops have led the way.
"The co-op model is pioneering in some sectors; it's leading the field," Restakis said. "Co-ops are sort of like antennae where people actually get together to create a service or product that's not currently available."