Taking power back: Cooperative futures and Earthworker’s ‘Green New Deal from Below’

Earthworker Cooperative March

Earthworker is working towards a cooperative-centred Green New Deal in Australia, socialising energy production and ensuring workers in the industry are empowered and reap the benefits of the energy transition. Though not a top-down Green New Deal, but a ‘Green New Deal from Below’.

Australia’s federal election results could finally be the catalyst for a nation-wide consensus to rapidly transition our economy towards renewable energy and a sustainable economy. This offers a unique opportunity to cooperativise the new green economy. Key industries and entire supply chains could be directly controlled and owned by its workers and consumers, directly and democratically answerable to the community and local environment. This is the goal of Earthworker, a community of unionists and environmentalists building ecosystems of worker-run cooperatives across Australia. 

Modelled on the Mondragon Corporation of worker cooperatives in Spain’s Basque Country, which employs over 80,000 worker-owners in hundreds of mutually supporting enterprises and service providers, Earthworker’s worker co-ops emphasise direct democratic ownership and management of an enterprise through the principle of one worker, one vote. Each worker in the co-op is afforded a single equal share in the enterprise, with a corresponding vote to elect board members and management, union reps and set up committees and collectively manage their day-to-day duties. Worker-owners are empowered to distribute their collective surplus (profits) as they see fit, often reinvesting back into the co-op, distributing as dividends or bonuses, or donating to social justice causes. Earthworker supporters hail from across the left ideological spectrum but are united in agreement that worker co-ops offer a practical and demonstratable alternative to a late-stage capitalism reliant on incessant and unsustainable growth, ecological exploitation, and precarious working conditions.   

Although unusual to Australia, worker co-ops are common in the Basque Country and can be found across the globe.  Perhaps surprisingly, the United States has seen rapid take-up of worker co-ops, including the unique ‘Union Co-op Model’. Developed by international representatives of the Mondragon Corporation and the United Steelworkers, this model blends co-op business structures with trade union support, oversight, and organisation. Successful worker co-op movements often emerge in response to crisis or adverse circumstances. Cooperatives in the Basque Country and the Emilia Romagna region of northern Italy emerged from isolated and poverty-stricken regions devastated by war and fascist persecution. Here in Australia, Earthworker is responding to both energy and climate crises and the steady decline in workers’ power since the late 20th century.

Not content with striking out a small cooperative island in a sea economic of competition and antipathy, Earthworker co-ops are building cooperative archipelagos of mutually supporting enterprises, each run democratically by its workers. Two fledgling co-ops, Earthworker Smart Energy Cooperative and Earthworker Construction Cooperative have just been founded. They join the growing community of Earthworker affiliated co-ops, including Redgum Cleaning Cooperative, HOPE, an asylum seeker worker co-op, and the flagship, Earthworker Energy Manufacturing Cooperative, which manufactures electric heat-pump hot water systems in the coal mining town of Morwell in Gippsland’s Latrobe Valley.

Earthworker Cooperative, the coordinating ‘mothership’, is a community co-op of civil society and supporters of the worker co-op model, which serves to continue the expansion of the co-op movement and works to support and promote affiliated cooperatives. Earthworker Cooperative is also a founding member of Cooperative Power, an energy retailer consumer cooperative formed by trade unions and climate action organisations. CoPower’s customer base has expanded rapidly since the acquisition of Powershop by Shell Energy Operations. The buyout of Powershop by a subsidiary of a company directly responsible for the global climate crisis triggered thousands of customers to vote with their feet and switch retailers to a socially conscious organisation to supply their energy needs.

CoPower is not a worker cooperative, but a cooperative of founding organisational members. These organisations collectively own the enterprise, however every CoPower customer is afforded a vote and encouraged to make submissions and debate over how CoPower’s surplus should be distributed. Later this month, CoPower’s customers will vote on how to distribute $100,000 of surplus, with spending priority areas awarded to First Nations solidarity efforts, ecological regeneration and investing in just transitions, to name a few.

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Although Earthworker closely models itself on the Mondragon cooperatives, North American efforts to cooperativise the energy market have inspired Earthworker activists and organisers to socialise the energy market. US president Franklin D. Roosevelt’s New Deal development programs in the 1930s and 40s established a large network of electricity cooperatives in the US which currently power 21 million customer members in forty-eight states. Sixty-three US co-ops produce and wholesale electricity into the grid and have tripled renewable energy capacity in the last decade.

Instead of purchasing energy from corporate retailers with a history of animosity to renewable energy, millions of North Americans have benefited from being supplied with affordable, community-owned electricity generators, which, like the communities they service, have an interest in transitioning to renewable and sustainable energy production. Similarly, cooperatives in the Philippines have pioneered efforts to transition to communities towards renewable and sustainable energy. There, local renewable energy cooperatives (LRECs) meet the needs of its members and community, often in isolated areas, by financing and constructing local community energy projects. As consumer cooperatives supplying renewable energy to local communities, LREC’s can address developmental neglect, energy poverty and inequality.  Union Aid Abroad – APHEDA, the global aid and justice wing of the Australian union movement has assisted LRECs to build ‘energy democracy’ and a just transition on Masbate Island, in the middle of the Filipino archipelago. The Masbate Electric Cooperative (MASELCO) now supplies power to 60% of nearly one million residents on the island. As a publicly owned cooperative, MASELCO delivers electricity at an affordable rate to the community, and is expanding renewable energy production on the island, at a time when coal powered energy generation still dominates the national grid.

Earthworker’s coordinated worker co-op model is working towards a cooperative-centred Green New Deal in Australia, socialising energy production to ensure workers in the industry are empowered and reap the benefits of the energy transition. Though crucially, this is not a top-down Green New Deal, but a ‘Green New Deal from Below’, where individuals and communities take it upon themselves to realise a transition to renewables and a safe climate. By building a common cooperative ecosystem, Earthworker can begin to socialise not just energy supply but also the ways in which energy is consumed.

I am a founding member of Earthworker Smart Energy Cooperative (ESEC). Since start-up in January this year, ESEC has been conducting no-cost draught proofing assessments and retrofits of low-income homes in inner Melbourne. This project is assisting targeted households to reduce their energy bills and improve household comfort and health outcomes. The project has potential to be scaled up through a revolving fund model of financing efficiency services for low and middle-income households, wherein local or state governments, energy retailers, financial institutions and large social organisations fund the often-substantial upfront costs of home retrofits.

Full or partial subsidies can be allocated to low income and public and social housing, whilst middle-income households make incremental repayments to the fund through council rates payments, energy bills or affordable credit agreements. In the future, further expansion of the Earthworker ecosystem will start to link energy production into energy services, with community owned generation wholesaling energy to CoPower. A first step in this direction is to assist Victorians to understand and maximise their household energy efficiency and management, at an affordable price, whilst empowering workers through worker ownership and democratic control of their workplace. Astronomic energy costs and extreme weather temperatures only reaffirms the need for cooperatives like ESEC to offer these services to households in-need.

The growth of the Earthworker model and ecosystem creates opportunities to connect goods and services provided by co-ops to anchor institutions and industries.

Evergreen Cooperatives: working with anchor institutions to build community

As I mentioned earlier Earthworker has modelled itself on the Basque transformative project led by Mondragon, but another significant example is the Evergreen Cooperatives, a workers’ cooperative initiative in Cleveland, Ohio (USA).

Evergreen has set itself the task of creating cooperative ecosystems linked to local ‘anchor institutions’ in Cleveland’s Greater University Circle (GUC). This initiative aims to bridge gaps between local anchor institutions (hospitals, universities, government services) and nearby communities. Neighbourhoods surrounding the GUC are home to 43,000 people whose median household income is less than $18,500 (25,000 AUD). Unemployment rates are now well over 25 percent.

Born in response to the spiralling impoverishment and human and capital flight from Ohio’s ‘rustbelt’, the Evergreen model has been a remarkable success in sustainable job creation, worker ownership, poverty reduction and community development. 

Workers are recruited from economically distressed neighbourhoods surrounding Cleveland’s GUC. The initiative supports local businesses that promote sustainable enterprise and create new jobs. Evergreen Laundry Cooperative provides an ecologically friendly and sustainable contract laundry service for hospitals, hospitality, and hotels in the area. Ohio Cooperative Solar has weatherised houses in low-income communities through Cleveland’s Home Weatherization Assistance Program, and installs solar panels throughout the greater Cleveland area, including major contracts with local hospitals, city halls and libraries.

Efforts had been underway for decades in attempts to rebuild Cleveland after steady capital and population flight as manufacturing moved offshore. Permanent and sustainable wealth building for the community that remained in Cleveland was proving elusive. “We have struggled to find ways over many, many years to help change people’s lives measurably,”said, Tracey Nichols, director of the Department of Economic Development for the City of Cleveland.“In economic development you create jobs by offering incentives to companies to relocate and a company is here for 10 years and then moves away, and you have to ask yourself, are these people measurably better off? They had a low paying job for ten years and they paid their bills, but they didn’t build equity.”

What has made Evergreen so successful in rebuilding its community is the very same reason that makes cooperatives so attractive for worker-owners: secure, empowering employment and higher wages.

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Like many other inner-city employment programs, both in the US and here in Australia, the Evergreen initiative focuses on the difficult task of building an employee base among those who have faced long-term unemployment, underemployment, and incarceration. What sets Evergreen apart from other attempts at job creation is that Evergreen system offer wages of at least $10.50 an hour, plus health benefits, and the opportunity to build wealth through ownership equity in the firm. Successful worker co-ops like Evergreen Cooperative Laundry and Ohio Cooperative Solar redistribute a portion of its annual profits into workers’ accounts, the cooperative equivalent of a dividend. This allows for the worker-owner’s savings and raises the value of their equity holdings, allowing them to build significant financial assets on top of their wages.

Wealth building at Evergreen is not only measured in terms of dollars saved in a worker’s account. It is also about the empowerment workers experience being part of an enterprise that is leading the country in sustainable practices and is a pillar of their community. “So many workers, without prompting, say how much they are attracted to this vision of being green and caring about the environment,” said an Evergreen leader. “They have lived in these neighbourhoods and seen the degradation and they are beginning to express themselves as leaders of renewal, as working for something that is inspiring hope. They are experiencing pride of place. This is about how we unleash the energy of people to become actors in history in their own lifetimes.”

Workplace culture and morale can be much stronger in a worker co-op than in a traditional enterprise. Adam Schwartz, founder of The Cooperative Way, an organisation supporting co-op development, argues that a focus on creating an organization of people who are passionate about cooperativism will “pay significant dividends. Engaged employees who believe they’re working for a cause, not just a paycheck, will accomplish more, be more content, and deliver better member service.” Cooperatives not only promote socially conscious development but also are democratic and people centred. The cooperative model allows for individuals and the wider community to control and influence key institutions in their lives. Cooperative centred development enhances community trust and connection, creating opportunities to pool economic, social, and political resources. As a result, worker co-ops often have a flow on effect to the wider community and beget the generation of further community-led wealth generation, through the establishment of new cooperatives and a larger and more robust cooperative economy.

The Evergreen model focused on the creation of networks holding local anchor institutions is an excellent example of why worker co-ops should proliferate here in Australia. Just like in the United States, worker co-ops in Australia have the potential to help mitigate the negative effects of growing income inequality and economic disadvantage. The Evergreen model is a promising example of how to leverage the emerging green economy, local assets, and public support for greater equity and sustainability. Worker-owners are able to provide secure, fair and empowering employment for themselves and the community.

The stability provided by supporting anchor institutions has become a successful model of building community wealth and resilience. Evergreen has proven that worker co-ops servicing and supporting key institutions can thrive, even within a hyper-individualistic late neoliberal society such as the USA.

Earthworker’s formation as a vessel to develop worker-owned economies was a real grassroots response to the lack of action and leadership from federal governments to transition Australia into an ecologically sustainable future. As unionists and workers, Earthworker activists are determined to ensure the transition doesn’t leave workers jobless or see their working conditions degraded. Through Earthworker co-ops like the factory in the coal town of Morwell, workers have been offered the opportunity to work in a democratically run cooperative and see the value they produce recirculated to themselves and their local communities.

The current energy supply and price crisis highlights the need for workers and communities to take grassroots action to protect themselves against rising energy costs and cost of living, ensuring workers are not left behind by policies that are too little, too late. Already, local sustainability groups in Naarm/Melbourne are pooling resources to bulk buy Made in Morwell Earthworker heat pump hot water systems, and have their homes assessed and retrofitted by Earthworker Smart Energy Cooperative to improve energy efficiency and comfort for the winter.

Earthworker’s mission to support and connect worker co-ops in the new economy is a transformative and radical yet practical response to the climate crisis in Australia. To make a sizeable impact and bring about change, community action, key industry and local anchor institutions are the key to providing the support and stability needed to expand the cooperative economy in this country.

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