In Newark, Immigrant Entrepreneurs Put Their Own Spin on Starting a Business – Next City
The Equity Factor

In Newark, Immigrant Entrepreneurs Put Their Own Spin on Starting a Business

The bustling Ferry Street corridor in Newark's Ironbound neighborhood (Photo by Oscar Perry Abello)

For nine years, Mariana Nuñez has lived in Newark’s Ironbound neighborhood, full of densely-packed houses along tree-lined streets. Currently about 60 percent foreign-born, the Ironbound has always been an immigrant neighborhood, from German and Irish, to Italian and Polish, to Spanish and Portuguese, and now many from countries in Central and South America. Nuñez came to America for the same reason many others before her did.

“We came here because we need more opportunity for my children,” Nuñez says.

Hiara Mota moved to the Ironbound only around three years ago, but she first arrived in the U.S. with her mother and sister nearly three decades ago. Like many others from the Dominican Republic, they found a home in uptown Manhattan, in the Washington Heights neighborhood that just helped elect the the first Dominican-born representative in U.S. Congress, Adriano Espaillat, who is also reportedly the first member of congress who arrived in this country undocumented.

“They came to give us a better life,” Mota recalls of her family. Her mother still lives in Washington Heights.

Like many immigrants, Nuñez and Mota recently decided to start a business. According to the Kauffman Foundation, immigrants are twice as likely to start a business as native-born Americans; and 28.5 percent of new entrepreneurs in 2014 were immigrants, up from 13.3 percent in 1997. And of course, there is the famous statistic that foreign-born Americans have founded around 40 percent of Fortune 500 companies.

But the extent to which foreign-born Americans have used cooperative economics to support each other remains a mostly untold dimension of the immigrant economic experience. From the very first credit union in the U.S., St. Mary’s Bank, which Catholic immigrants used to save and borrow money, immigrants have found ways to cooperate economically. Nuñez and Mota continue that history, as two of 18 founding members of Green Magic Cleaning Cooperative, a 100 percent worker owned and operated business. It incorporated just last month.

“People that want to do a business, they should inform themselves about co-ops. It’s an alternative to regular business,” says Mota. “With a co-op you gather people that have the same vision as you, so it’s better than doing it alone.”

It’s cheaper, too. The founding worker-owners of Green Magic chipped in $100 each up front for startup capital, and found other ways to raise additional startup funds during their formation period, including selling meals to each other or other community members and donating the sales to the cooperative. Altogether, they raised about $5,000 in startup capital. One of the reasons they choose to be a cleaning business was because of the relatively low startup costs. They even create their own cleaning product in-house, instead of relying on a potentially expensive supplier. The product is a blend they experimented to come up with during the formation phase. It took months of preparation and thinking and research and testing in their own homes, Mota says.

To potential clients, Green Magic is similar to other cleaning companies. For a negotiated fee based on the size of the space, they come in and clean the space. Unlike many cleaning companies, their cleaning product is organic and eco-friendly, hoping to capitalize on that trend as well as promoting their health as well as the health of their clients. Some of Green Magic’s founding worker-owners, including Nuñez, have worked in factories before, to the detriment of their own health. The Ironbound, once a home for thousands of factory workers who walked to work, remains in close proximity to large industrial areas, and walking around one can often catch a whiff of chemical smells.

Other recently-formed worker cooperative cleaning companies in the NYC area, such as Damayan Cleaning Cooperative and Apple Eco-friendly Cleaning, also started by mostly immigrant women, have chosen to use eco-friendly cleaning products for many of the same reasons.

Like the other worker cooperatives, Green Magic’s worker-owners have pledged to make important business decisions as a group, and they pay each other based on how much each member has worked for the business.

Rather than an hourly wage, the group collectively assigns a compensation amount for each job site or task associated with the business, and they pay each other based on who contributes to each site and task, including scheduling, marketing, accounting, mixing cleaning product and other functions. It’s a way of maintaining equity and avoiding competitiveness between each other, while still paying fairly for all the work that needs to get done. Once they have enough clients, most members including Nuñez and Mota plan to work full-time with the co-op.

The unorthodox pay structure and decision-making process are just some of the many ways the worker-owners have shaped Green Magic Cleaning Cooperative to reflect the values they share as a group.

“I feel like I’m working with my family,” says Nuñez.

Constant communication is key to the family dynamic, Mota adds. Other than weekly meetings every Monday morning at 10 a.m., the group’s main virtual communication tool of choice is a group messaging thread on WhatsApp, which everyone already knows how to use from their personal lives, communicating with family in other countries.

“It’s hard if we do emails. It’s faster through WhatsApp. Some of the ladies in the co-op don’t have computers,” Mota explains. She even showed me a few recent group messages, including business-related memos interspersed with birthday party photos.

One of Green Magic’s first big clients will be Ironbound Community Corporation (ICC), the 47-year old community-based service provider that incubated the co-op as part of its community development and environmental justice programming.

“One of the things we kept realizing is folks need incomes, yet they have amazing talents,” says Drew Curtis, director of community development and environmental justice at ICC. “They may have been dentists or travel agents or other professionals in their original countries, but here they’re not authorized to work.”

Two of Green Magic’s founding worker-owners were accountants in their original countries, for example, giving the group an easy source of technical skills on that front.

Ironbound Community Corporation headquarters in Newark, NJ (Photo by Oscar Perry Abello)

In preparation to incubate a worker cooperative, ICC sent staff to the Center for Family Life (CFL), in Brooklyn, NYC, to attend their co-op developer training program. It’s part of CFL’s support for worker cooperatives funded by NY City Council. One staff member was ICC’s economic empowerment program manager, the other was its leadership developer, Maria Lopez-Nuñez, who has a background in group dynamics and conflict resolution.

“It’s underestimated how hard that part is. I’ve noticed a lot of my colleagues are really concerned about the business development aspect, like are they going to know how to balance a checkbook, the traditional how to start a business mindset,” says Lopez-Nuñez. “What I’ve noticed is just how people don’t have practice working in groups.”

Originally from Honduras, Lopez-Nuñez knew a lot of women in cooperatives and collectives growing up. “Everybody knows somebody in a cooperative in our village,” she says.

Lopez-Nuñez recently took a trip back, and was catching up with a lifelong grandmother figure. “She was telling me cooperatives shouldn’t work in the U.S., cooperatives are for poor people, everything is so individualistic, cooperatives shouldn’t work,” she says. “I was just explaining what my job is.”

Lopez-Nuñez and ICC took Green Magic’s founding worker-owners through a 12-week course, focusing a lot on group dynamics. “Even if you were perfectly in love with someone and they were your soul mate, you would still fight. You’re still going to have conflict. Now you bring in 17 people,” Lopez-Nuñez explains.

Ultimately, Lopez-Nuñez says, Green Magic aims to become one of the largest cleaning companies in the area, putting other companies out of business and recruiting new members from among their workers, often currently in exploitive situations with low pay and hostile working environments. “Green Magic has already had offers for clients that are bigger than they could take,” she adds.

ICC is also already considering other worker co-op development opportunities, such as home-based childcare or construction. “A lot of the women, their husbands work in construction,” says Curtis.

The Equity Factor is made possible with the support of the Surdna Foundation.

Oscar is a Next City contributing writer, and was a Next City 2015-2016 equitable cities fellow. A New York City-based journalist with a background in global development and social enterprise, he has written about impact investing, microfinance, fair trade, entrepreneurship and more for publications such as Fast Company and NextBillion.net. He has a B.A. in Economics from Villanova University.

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Tags: small businessnewarkworker cooperatives