Spreading the Good News of Worker-Owned Businesses in D.C. – Next City

Spreading the Good News of Worker-Owned Businesses in D.C.

Tightshift Labor Cooperative workers at a job site. (Photo by Allison Basile)

For Juan Reid, starting a worker cooperative opened the door to legal work, business ownership and healing from trauma after incarceration. A new local initiative promises to help scale the business so it can offer the same to others coming out of the criminal justice system.

Growing up in a Washington, D.C. neighborhood where “there was nothing but drugs and violence,” Reid says he was in and out of the criminal justice system for most of his early life. Starting at age 18, he spent 14 years in prison — the last seven in solitary confinement.

Once out, he was ready to work, but the cards were still stacked against him.

“The system was locking people like me out of the economy,” he says.

Someone Reid knew helped him get a job in food service. He was good at it, so good that his supervisor was eager to promote him quickly. But days after receiving this good news, he was fired. “The info got out that I had come out of prison,” he says.

That setback pushed him back to the streets for a time. He was living in a van when his mother called him one snowy night in early 2015. Having spotted his social media posts boasting of a job and a life he only wished he had, she said she was proud of him. The moment galvanized Reid to jump back into the job hunt.

“I went on Craigslist, answering every ad for moving jobs, yard work, washing cars, even cooking hot dogs, basically doing anything to keep from falling back to hurting people,” he recalls.

That array of successful freelance gigs laid the groundwork for Tightshift Laboring Cooperative, the worker-owned moving, hauling, landscaping and cleaning business that’s now giving Reid a chance to provide employment for others re-entering society after prison.

The idea of forming a co-op came when he met his future business partner, Allison Basile, a longtime grassroots organizer and “solidarity economy” enthusiast who in 2015 was living and working in Reid’s neighborhood, spreading the word about worker-owned cooperatives.

“It resonated immediately,” Reid says. “A business where all the people own it? I didn’t even know that existed.”

It’s not uncommon to find that cooperative economic history has been lost. Much of it has been unearthed relatively recently by political economist and author Jessica Gordon Nembhard, contained now in her book, “Collective Courage: A History of African American Cooperative Economic Thought and Practice.”

Basile cites a deep history in D.C. around co-op development, from 19th-century mutual aid, taxi and food co-ops to former Mayor Marion Barry’s 1980 proclamation of a “Commission for Cooperative Economic Development.” In recent years, a group of grassroots organizers convened at the Emergence Community Arts Collective in D.C. to learn together about co-op history and incubate new co-op efforts, according to Basile. From that emerged a Coop Conference at the University of the District of Columbia in 2012, a Solidarity Economy Summit in 2014, several new start-up co-ops and the creation of Coop DC, an online directory, discussion forum and network for co-ops and like-minded individuals.

Reid and Basile joined forces, and, with the help of a $5,000 grant, secured the necessary licensing, insurance and legal paperwork to form an LLC. They purchased some basic landscaping equipment, and revenue from Tightshift’s services covered per-job truck rental. A lot of sweat equity and a spate of 5-star Yelp reviews have kept the business going, Basile says. But scaling up, acquiring more assets and working toward their larger vision of a wraparound live-work-heal community for returning citizens will require additional resources, even if their current GoFundMe campaign is successful.

Startup and early growth phases are challenging for any small business, but worker-owned cooperatives face some unique challenges, as traditional lenders and small business assistance agencies often lack familiarity with employee ownership models.

Whether fledgling co-ops like Tightship, or older traditional businesses whose owners seek to preserve their legacy as they retire, the DC Employee Ownership Initiative, launched this week, promises to help businesses transition into stable worker-owned businesses.

With $150,000 from Citi Community Development and on-the-ground business expertise from the Washington Area Community Investment Fund (Wacif), the initiative is meant to bolster support in and around D.C. for employee ownership, with an overarching goal of building and preserving community wealth — in the form of business ownership and the jobs it provides — in the city’s communities of color.

Wacif has been a presence in D.C. since 1987, supporting housing cooperatives and community land trusts and, for the past 15 years, assisting low- and moderate-income entrepreneurs with financial capital, technical assistance and coaching.

“We’re thinking through new approaches to reduce barriers to small business success. We believe that small businesses are key to asset and wealth building,” says Harold Pettigrew, Wacif’s executive director. “And in D.C. specifically, we have an intentional focus on racial wealth disparity.”

He adds, “Creating an ecosystem that supports employee ownership can help create more success stories like Tightshift. They are one model of what success can look like locally.”

Policymakers and grassroots groups increasingly see employee ownership as a pathway out of poverty, an avenue to employment for groups typically shut out of the economy, and — with an impending wave of baby boomer retirements — as an important tool for preserving community businesses when aging owners retire or fall ill.

There are approximately 2,650 business owners of color near retirement in D.C., according to Wacif, citing research from the Democracy at Work Institute. Besides providing assistance to emerging or existing co-ops, the new initiative will direct education and coaching about employee ownership conversion options to these older owners, with the goal being to keep neighborhood anchor establishments from shutting down or being scooped up by investors who may not have local ties.

Employee ownership options include selling the business to employees to run as a cooperative — owned and democratically managed by its workers — or creating an Employee Stock Ownership Plan (ESOP), under which companies are wholly or partially owned by employees through a trust, and employees cash out upon retiring or leaving the company.

“With 40 percent of [D.C.’s] African American business owners getting ready to retire, we felt this was a necessary investment to preserve those businesses, and also to preserve community wealth,” says Robert Burns, senior vice president and greater Washington market manager for Citi Community Development.

D.C.’s local government is not part of the initiative, but the city has been supportive of employee ownership efforts. Mayor Muriel Bowser’s 2017 economic strategy specifically calls for building a “business/worker cooperative learning community” and raising co-op awareness in procurement offices and financial institutions. Pettigrew expressed optimism about the city’s potential for support, mentioning in particular a monthly series of stakeholder convenings, organized by the city’s Department of Small & Local Business Development since Bowser took office in 2015, including one such monthly convening thread focused on cooperatives.

Tightshift has been operating for nearly two years now. They’ve hired some 20 workers over the first two years, most of them formerly incarcerated. Seven are now in a 1,000-hour apprentice program that will lead to an opportunity to buy into the cooperative as owners. While training, Tightshift workers earn $15 to $17 per hour — D.C.’s minimum wage is $13.25 — and take part in company decision-making.

Reid spoke at the DC Employee Ownership Initiative launch event. He made a passionate case for the value of a cooperative workplace and mindset.

“We’re bigger than a business. We’re a family,” he said to the assembled crowd, which included city officials. “[In a cooperative] you are workers, but you own it too … We value humans over money. If you get up every day and come to work, you own this company. And when that profit comes, we should break bread with you.”

Tightship has rented a house in D.C. for its workers to share and has plans for creating a healing center on 70 acres of community-owned land in Virginia. The vision is that ex-convicts will be able to spend a year close to nature, working through the trauma that Reid knows so intimately, before moving into a shared house and starting training with Tightshift.

“You’ll come out of prison, get healed up. Then you come to D.C., and you own your business,” Reid said. “You don’t work for nobody [besides your fellow workers].”

Sandra Larson is a Boston-based freelance writer covering urban issues and policy. Her work has also appeared in The New York Times, Guardian Cities and the Bay State Banner. See her work at sandralarsononline.com.

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Tags: jobswashington, d.c.worker cooperatives