Gar Alperovitz is a historian, political economist, activist, and writer. He has written many books, including The Decision to Use the Atomic Bomb, and, more recently, What Then Must We Do? Straight Talk About the Next American Revolution. He grew up in Racine, Wisconsin, and has contributed to numerous efforts at economic reconstruction, including in Youngstown and Cleveland, Ohio. All of which he discussed with n+1.
n+1: What is the Cleveland Model?
GA: The idea is to set up an institution, not a corporation, but something else, within a geographic community. And then on that structure you build worker-owned and multi-stakeholder firms that cannot be sold off, which is critical. This means that any growth that happens is distributed more equally because everybody collectively and individually owns a piece of the asset whose value is appreciating, whose revenue is growing.
Then you’ve got these anchor institutions I was talking about earlier: hospitals and universities—Case Western, Cleveland Clinic, University Hospitals. Medicare, Medicaid, education efforts—lots of public money in the area: Those three Cleveland institutions alone purchase $3 billion in goods and services a year. That’s leaving aside salaries and construction—just what they buy. And, until now, none of it from that area. So the model directs some of that purchasing power to the multi-stakeholder firms and co-ops.
Now, these are not your traditional small-scale co-ops. The model draws heavily on the experience of the Mondragon Cooperative Corporation in the Basque Country of Spain, the world’s most successful large-scale cooperative effort, which now employs around eighty thousand workers in more than 250 high-tech, industrial, service, construction, financial, and other largely cooperatively owned businesses.
In Cleveland now, there are three such firms. The Evergreen Cooperative Laundry [ECL] is the flagship, and it capitalizes on the expanding demand for laundry services from the health-care sector, which is huge, something like 18 percent of the national GDP and growing. After a six-month initial “probationary” period, employees begin to buy into the co-op through payroll deductions of fifty cents an hour over three years (for a total of $3,000). Employee-owners build an equity stake in the business over time—a potentially substantial amount of money in a tough neighborhood. Also, it’s totally green, with the smallest carbon footprint of any industrial-scale laundry in northeast Ohio. Most industrial-scale laundries use four to five gallons of water per pound of laundry; ECL uses eight-tenths of a gallon to do the same job.
The second employee-owned enterprise is Evergreen Energy Solutions, which does large-scale solar panel installations on the roofs of the city’s largest nonprofit health, education, and municipal buildings—again, those anchor institutions I was talking about.
The third enterprise is Green City Growers, which operates a year-round hydroponic food production greenhouse in the midst of the Glendale neighborhood in east Cleveland. The 230,000-square-foot greenhouse—larger than the average Walmart superstore—will be producing more than three million heads of fresh lettuce and nearly half a million pounds of (highly profitable) basil and other herbs a year.
Does Cleveland Know the Secret to Building Wealth Without Gentrification? – Next City.