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Building Economic Resilience in Buffalo: Interview with Aaron Tanaka

Updated: Apr 19

Aaron Tanaka is co-founder of the Boston Impact Investment fund and a leader in the formation of the Center for Economic Democracy and impressively involved with numerous other facets of a visionary economic movement. I spoke with Tanaka shortly after his visit to Buffalo to consult with Cooperation Buffalo, an incubator for worker-owned cooperatives. He had also just moderated a panel for the New Economy Coalition, which is composed of a diverse array of organizations seeking to “build a future where people, communities and ecosystems thrive” and fighting against barriers of oppression.


You moderated an online panel recently on worker cooperative models. Could you tell us the defining features of a worker cooperative?


A worker cooperative is a business model used in countries all over including the United States anchored by the idea that employees share in profits instead of profits only being owned by people with capital and also where the workplace is democratically managed. That can mean a number of different things. It could be non-heirarchical in structure, but also there are models of larger cooperatives in which higher management is elected. An example is Mondragon in Spain, which is one of the seventh largest corporations, which employs 84,000 people and has over 100 cooperatives as part of its network. It has its own hardware stores, bank, grocery stores.


Cooperatives have the potential to compete more successfully than traditional business forms. It makes sense, because employees who are owners give it their all and because they can make changes they are empowered to make it run more smoothly. They are more likely to look out for the business as opposed to the idea that they will get paid whether the business does well or not and it is not in their control.


What led you to the worker-cooperative model and what kept you there?


My professional background is in community organizing with the Boston Workers Alliance (BWA). At the BWA we organized workers facing barriers to employment, workers with underemployment and no employment, workers who were qualified, amazing, generous people who were barred from employment because of their criminal records.


My question has always been, how do we make the economy benefit those at the bottom? We had a campaign to ban the box [on employment forms, so that applicants did not have to disclose criminal records] and at the same time we realized we could sidestep that if people could start businesses. An entrepreneur with a record would be more likely to hire others with a record.


You have worked with no and low wage workers as well as impact investors. You just spoke about the influence of the former; could you speak to the experience of working with investment and what that can be like?


After I left BWA I helped start a place-based impact investment fund with a mission to invest capital in entrepreneurs and communities who have barriers to capital. I wanted to build business ownership in the places I was organizing and support entrepreneurs in the community. I am a fellow with the Business Alliance for a Local Living Economy (BALLE) and we used BALLE’s metrics; overall health of the local living economy, opportunity for all, ecological practice, place. One of the main things is ownership, both who is in ownership and who is not- are there people who have no ownership? For example, minority women, queer women. How do we allow for a larger number of people to also benefit from our success?


One of the challenges is to find businesses that are investment-ready, ready to build out as well as mission-fit; stable, mission-aligned businesses. For worker cooperatives you need the support of broader technical assistance. We offer loans, equity and grants. Some grant-making is oriented towards groups supporting the infrastructure, such as a worker cooperative incubators. We also support nonprofits so that their membership can understand the mission and they can work on policy campaigns.


You were just in Buffalo to work with Cooperation Buffalo, Buffalo’s new worker cooperative incubator. Why is the idea of an incubator important?


An incubator is an idea tried and tested in the mainstream business community. There are all kinds of incubators. The basic idea is that with any business idea, starting and being successful is not easy. Eighty percent of small businesses fail. The incubator is an important strategy of holistic support for those who are trying to get a foothold in the economy, especially low-income people and people with low educational backgrounds, people without money or privilege or access. It is an essential piece of community infrastructure that can offer technical assistance for legal matters, marketing, sales, human resources. A lot of our current economic strategy is to give tax breaks to multinational corporations who build a big box store, and then we see what happens: they can pick up and leave. We need to build our own economic resiliency.


What could the worker cooperative movement look like in Buffalo? What do we need to move it forward?


I am really excited to support Cooperation Buffalo. I think that there is a great amount of expertise and capacity and the possibility for a real community driven economy with the development of a robust ecosystem. One of the experiences of Buffalo is that of de-industrialization and there is the possibility to demonstrate a community-driven turnaround. An easy starting point is to support existing cooperatives: BreadHive, the Lexington Co-op. Instead of politicians putting money into big corporations, they can support an incubator. Small businesses can contribute to the development of worker-owned businesses because when there are more local alternatives money can circulate locally and stay in the community. Folks who have gone through the same challenges and people with business skills can contribute; people who are retired can not only share their skills but learn how they apply in a new way. Cooperatives are an exciting business strategy for those who want to retire. For those whose loyal employees represent their broader family or who want to express gratitude or care for their employees, selling the business to the employees can be a transformative experience that maintains a legacy.


Community wealth is a something that corporations have moved away from. Multinational corporations have little incentive not to offshore jobs but a worker-owned business is unlikely to sell jobs oversees. I see this as part of a broader movement for economic democracy, which can look like participatory budgeting, it can look like land trusts in which communities have control over the kind of development happening in their neighborhoods, and it can look like worker-owned cooperatives with democratic control and ownership.


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