RELEASE: REP. KHANNA INTRODUCES BILL TO SUPPORT AND EXPAND WORKER CO-OP BUSINESSES

Washington, DC – Today, Representative Ro Khanna (CA-17) introduced the National Worker Cooperative Development and Support Act -- a bill that invests in worker-owned cooperative businesses by endowing the Small Business Administration (SBA), Internal Revenue Service (IRS), and numerous federal agencies with the authority to expand and implement policies supporting the business model. 

Worker cooperatives are a business model that provides employees shared ownership and democratic control of a company. Rather than maximizing returns for outside shareholders, worker co-ops aim to share profits, benefits, and decision-making power with the workers who make the business function. Studies show that employee-owned companies tend to have higher productivity, more job stability, and increased worker satisfaction compared to conventionally owned firms.

The legislation will launch a coordinated federal effort to provide funding, technical assistance, education, and an improved regulatory environment for worker co-ops as well as establish a United States Council on Worker Cooperatives, led by the Department of Labor. The council will report to Congress with a federal worker cooperative strategy, designed through identifying regulatory barriers, proposing solutions, and coordinating research and educational initiatives. 

It also creates a small business lending pilot program through the SBA specifically for worker-owned cooperatives, providing $60 million in loans over 10 years and funding through the Community Development Financial Institutions Fund for education and services to create and manage worker co-ops. 

"Employee success is the backbone of small business success. It is time we help empower employee’s voices with worker cooperatives and help ensure they share in the wealth they help create. I’m proud to introduce this bill that provides coordinated federal support and resources to make employee ownership possible and grant ordinary Americans a seat in the ownership economy,” said Rep. Ro Khanna

“Worker Cooperatives are a solution for business owners who want to retire, for community stability, and for worker empowerment...and of course wealth building. There are significant issues around the lack of understanding and awareness of what a worker cooperative is, how a business can transition to one, and the business needs. Thank you Rep. Ro Khanna for bringing the conversation of worker cooperatives to the front burner and prioritizing their creation and treatment at the federal level,” said Kirk Vartan, GM/Founder, A Slice of New York

“Decades of research have shown that employee ownership creates good jobs, strong businesses and a meaningful pathway for wealth creation through business ownership for hundreds of thousands of workers. The National Worker Cooperative Development and Support Act will remove major obstacles that inhibit the wider adoption of worker ownership as a critical tool for equitable economic and workforce development,” said Zen Trenholm, Senior Director of Employee Ownership Cities and Policy at the Democracy at Work Institute.

“We all know that in the last few years there has been an increase of economic hardships, especially within marginalized communities. Yet, incredibly,  in these very places of great strife, we have seen many seeds of organized  cooperation and community caretaking take root. Worker owned cooperatives are businesses where we see great resilience. In worker owned cooperatives, workers are empowered to make decisions that are best for themselves and for the business. The people closest to the work are the best positioned to make decisions about that work. Worker owned cooperatives provide dignified work that is inherently invested in the wellbeing of not only the workers but their community as a whole. We need more federal recognition and support so we can continue to grow the networks of worker owned cooperatives in this country,” said Itzel Nuño, Workplace Democracy Projects Coordinator, Sustainable Economies Law Center

“With federal support, worker cooperatives can play a critical role in reducing income and wealth inequality, retaining small businesses, and creating quality jobs. Our nonprofit has helped many business owners sell to their employees through worker coop transitions, and, as a result, workers’ pay, profit sharing, and job satisfaction are increasing dramatically. This bill complements recent employee ownership legislation by promoting the unique advantages of the increasingly popular worker cooperative model. And it couldn’t be more timely, with nearly three million job-creating businesses at risk of closing when their owners retire; many of these can transition to worker coops, rewarding the selling owner and new worker-owners alike,” said Hilary Abell, Chief Policy & Impact Officer, Project Equity

“The 1,000+ workers of the Network of Bay Area Worker Cooperatives (NoBAWC) — a network of over 40 worker-owned firms in California — have eagerly supported goals in addressing the various crises workers across California are facing. Namely, these workers are seeking interventions from the state and federal government to ease the creation of worker cooperatives in a fiscally responsible and socially just manner. Rep. Ro Khanna's National Worker Cooperative Development and Support Act will bring the needed focus on worker cooperatives at the federal level,” said J. Noven, Coordinator, Network of Bay Area Worker Cooperatives

"The Worker-Owned Recovery California (WORC) coalition was spontaneously founded in response to the dire and immediate conditions of COVID-19 in April 2020. Worker cooperatives were the primary strategy we promoted to address the massive pending business closures in California, and create multiple state-level budget requests. Our volunteer group has identified many gaps in state and federal systems to effectively support worker cooperative formation and support. Rep. Ro Khanna's National Worker Cooperative Development and Support Act will bring the needed focus on worker cooperatives at the federal level. WORC Coalition enthusiastically supports this bill,” said J Noven, Acting Coordinator, WORC Coalition

“The California Center for Cooperative Development is a non-profit dedicated to empowering groups to improve their lives by working together to accomplish together what they cannot effectively do alone.  Worker Cooperatives offer a business model that empowers groups to own and control their workplace, and in so doing they also offer valuable, local-based goods and services to their communities.  We encourage support for this bill-- it benefits local economies, at both the worker-owner and consumer level,” said E. Kim Coontz, Executive Director, California Center for Cooperative Development

“Worker Cooperatives are one of the most successful and popular options for employee-owned companies in  America. The National Worker Cooperative Development and Support Act would go a long way to expanding this opportunity, benefiting both retiring business owners and their employees. Thank you Rep. Ro Khanna for advancing this great piece of legislation," said Thomas Dudley, CEO, Certified Employee-Owned

“We are seeing historic small business growth, with a record-breaking 5.5 million new business applications last year,” said John Arensmeyer, Founder & CEO, Small Business Majority. “The ‘National Worker Cooperative Development and Support Act’ will help sustain this growth by removing barriers to worker-owned business cooperatives, including access to capital, education and resources. We applaud Representative Ro Khanna for introducing legislation that will support the development of unique business models like worker ownership structures. Under this legislation, small business owners can pursue succession planning while ensuring they and their employees can build wealth in their communities,” said Richard Hobbs, Executive Director and a co-founder of Human Agenda

“Worker cooperatives put worker and community benefits at the core of their purpose and operations and help create long-term jobs and sustainable business practices. Increased awareness of and support for these businesses would positively impact many workers, families, and communities. Thank you Rep. Ro Khanna for working to support and expand the worker-owned cooperative business sector in the United States,” said Ashley Ortiz, Development and Support Cooperative member, Arizmendi Association of Cooperatives

“On behalf of the Smart Yards Co-op team, I’d like to express our deep appreciation for your work and introducing The National Worker Cooperative Development and Support Act. As you know worker-owned businesses make them compelling and innovative business models in many ways. For us at Smart Yards Co-op, there are many reasons to work cooperatively and dream of growing our business as a coop as there’s tons of work to transform outdoor living spaces into regenerative and life supporting ecosystems that also conserve water and energy. The strong commitment to ethical and sustainable business practices; considerations for the environment, social responsibility, ethical sourcing, resource conservation, diversity of ideas and skills leading to innovative solutions and creative approaches to challenges are key for us to be organized as a co-op. Unfortunately, the perception and lack of understanding of co-ops in our communities can be a challenge. The NWCDSA can indeed inspire action and move us toward the direction of a culture of more co-op businesses in Silicon Valley,” said Elizabeth Sarmiento, Manager/Founder, Smart Yards Cooperative

"The Tuttle Law Group has been focused on legal support for all types of California Cooperatives for over 25 years. And while cooperatives exist in many forms, providing members with benefits across economic sectors, worker cooperatives provide unparalleled opportunities for their worker owners. There is a significant information deficit in the United States about this unique corporate form, and its importance to our national security, which depends on local control of workplaces and resources. Systemic changes are needed at the federal level to adequately support these self-help business solutions; so it is great to see Rep. Ro Khanna using his position on the national stage to make worker cooperatives more understood, prevalent, and supported. We fully endorse this bill and hope it is implemented quickly,” said Therese C. Tuttle and Paola Eisner, attorneys, Tuttle Law Group

“The City of Santa Clara became the first South Bay city to have a private retail business transition to a worker cooperative back in 2017. Our City was unaware of Worker Cooperatives, and in 2019, held a full city council and staff study session. Since that time, we are proud to have created and funded a first-of-its-kind Worker Cooperative Initiative to find ways we could help our small businesses and our city. It is clear that more awareness, education, and understanding is needed. Whether to provide solutions to our retiring business owners, provide a path to ownership for workers, or to make our cities more resilient, we need more worker cooperatives. I am proud to strongly support Rep. Ro Khanna’s National Worker Cooperative Development and Support Act,” said Lisa M. Gillmor, Mayor, City of Santa Clara