The National Cooperative Administration: A Job Creation Proposal

A cooperative in the South Bronx. (photo: theregeneration)

With unemployment still high and job growth anemic, finding jobs for Americans should be the top priority of our elected officials. To deal with this serious crisis, I propose the creation of a National Cooperative Administration to encourage the creation of worker-owned businesses.

Basic design

The NCA could provide free advice and low interest loans to newly created cooperatives and small cooperatives looking to expand. The NCA could provide assistance in areas such as acquiring insurance, running retirement programs, regulatory compliance and other administrative functions.

In addition, the NCA could administer a program under which individuals currently receiving unemployment and wishing to form a new worker-owned and -operated business can receive special matching funds. The individuals could temporarily remain qualified for some assistance programs or get an advance on the value of their unemployment compensation to help start the new businesses.

Practicality

The federal government currently runs both the Farm Credit Administration and the National Credit Union Administration to deal with specific types of cooperatives. There are now over 8,000 credit unions in the country, making them the most common and successful form of cooperatives in America. This is likely in no small part due to the existence of the NCUA to assist them. I believe the NCA could serve a similarly successful role in fostering worker-owned cooperatives instead of credit unions. [cont’d.]

Both parties in theory should support it

In this cut-frenzied political climate I doubt the Republican party would support this modest proposal, but if they were true to their rhetorical claims (I’m aware they aren’t), they would. It is designed to create small businesses and encourages the unemployed to create their new jobs. Cooperatives are the ultimate expression of the “ownership society.” While the program would cost some new money, the amount would be modest. Mostly, the NCA would be providing advice and loans. It would be redirecting money that the government would be spending anyway.

Cooperatives have, for a variety of reasons, always held an appeal for people on the left. Not only would the program be a way to help deal with our unemployment crisis, but also the hope would be that an increase in worker-owned businesses would be a step toward dealing with wage stagnation in an era of huge corporate profits while promoting companies that take the long view.

Laying out ideas early

This is a modest proposal with a minimum funding requirement that would be a fraction of the cost of TARP or the stimulus bill, but unfortunately the window to try even small new ideas seems to have been closed by a wave of deficit hysteria. Still, the past few crises have taught me that progressives need to come up with ideas not just during a panicked, narrow window of opportunity, but to lay out proposals to possible problems well in advance. By creating proposals early, you shape the debate. Sometimes, by being the first option, your proposal turns out to be the only one on the table and is ready for the moment that it is needed.

The National Cooperative Administration: A Job Creation Proposal

A cooperative in the South Bronx. (photo: theregeneration)

With unemployment still high and job growth anemic, finding jobs for Americans should be the top priority of our elected officials. To deal with this serious crisis, I propose the creation of a National Cooperative Administration to encourage the creation of worker-owned businesses.

Basic design

The NCA could provide free advice and low interest loans to newly created cooperatives and small cooperatives looking to expand. The NCA could provide assistance in areas such as acquiring insurance, running retirement programs, regulatory compliance and other administrative functions.

In addition, the NCA could administer a program under which individuals currently receiving unemployment and wishing to form a new worker-owned and -operated business can receive special matching funds. The individuals could temporarily remain qualified for some assistance programs or get an advance on the value of their unemployment compensation to help start the new businesses.

Practicality

The federal government currently runs both the Farm Credit Administration and the National Credit Union Administration to deal with specific types of cooperatives. There are now over 8,000 credit unions in the country, making them the most common and successful form of cooperatives in America. This is likely in no small part due to the existence of the NCUA to assist them. I believe the NCA could serve a similarly successful role in fostering worker-owned cooperatives instead of credit unions.

Both parties in theory should support it

In this cut-frenzied political climate I doubt the Republican party would support this modest proposal, but if they were true to their rhetorical claims (I’m aware they aren’t), they would. It is designed to create small businesses and encourages the unemployed to create their new jobs. Cooperatives are the ultimate expression of the “ownership society.” While the program would cost some new money, the amount would be modest. Mostly, the NCA would be providing advice and loans. It would be redirecting money that the government would be spending anyway.

Cooperatives have, for a variety of reasons, always held an appeal for people on the left. Not only would the program be a way to help deal with our unemployment crisis, but also the hope would be that an increase in worker-owned businesses would be a step toward dealing with wage stagnation in an era of huge corporate profits while promoting companies that take the long view.

Laying out ideas early

This is a modest proposal with a minimum funding requirement that would be a fraction of the cost of TARP or the stimulus bill, but unfortunately the window to try even small new ideas seems to have been closed by a wave of deficit hysteria. Still, the past few crises have taught me that progressives need to come up with ideas not just during a panicked, narrow window of opportunity, but to lay out proposals to possible problems well in advance. By creating proposals early, you shape the debate. Sometimes, by being the first option, your proposal turns out to be the only one on the table and is ready for the moment that it is needed.