Why was Cleveland Ohio founded

The Evergreen Cooperatives are a top-down public-sector initiative in cooperation with other public, semi-public and private institutions in the community. The focus of the regional development strategy is on the diversion of public investments into the creation of cooperatives. The initiative aims to create regional jobs and to maintain them in the long term. Further goals are to strengthen the purchasing power in the city and the demand for regionally produced goods and services. The institutions that ensure the demand for the goods and services provided in the cooperatives also play a special role in this strategy.
 


Starting position, development and current status

Cleveland, Ohio was one of America's largest industrial cities until the late 1940s and was once home to many major automakers and steel producers. However, gradually more and more companies migrated to low-wage countries. Especially when the largest steel mill (Youngstown Sheet and Tube) closed in 1977 and 5,000 jobs were lost in one fell swoop, the poverty rate in Cleveland rose rapidly. The population has since shrunk from 915,000 to 440,000 and at least 15,000 buildings are empty. [1]
Due to the suburbanization, which showed increasingly negative economic and settlement structural effects, the city of Cleveland gave more thought to how it can create jobs and bind them to the region in the long term. This gave rise to the idea of ​​founding the Evergreen Cooperative Association and its strategic connection with public institutions. The Evergreen Cooperative Association is based on the Mondragón cooperative concept1 and pursues the goal of economically integrating particularly low-income citizens in Cleveland and building local economic cycles. The strategy of the cooperative association is based on a) the founding of ecologically sustainable companies, b) their strategic networking with large public or semi-public institutions and c) the recruitment and training of citizens. especially from the low-income suburbs of Cleveland. [2]
The establishment of cooperatives appeared to be the most suitable option. Cooperatives are places of democratic learning and enable mutual wealth creation. The employees of the Evergreen laundry cooperative receive 8 dollars an hour for the first six months. If the employee is suitable for the job, the salary increases to 10.50 dollars an hour after six months, with part of the salary going to a separate account. After about seven years, each employee will have an equal stake in the cooperative for $ 65,000. [3] As owners, the cooperative members have an influence on the design of their workplace. The regional added value is strengthened through the involvement of public and private institutions as buyers of goods and services.

The Cleveland model

The Evergreen Cooperative Association has had three large cooperatives since 2010: the Evergreen Laundry Cooperative, the Ohio Solar Cooperative, and the Green City Vegetable Growing Cooperative.
The Evergreen Laundry Cooperative
Established in 2008, the laundry service is becoming a service provider for local facilities such as hospitals, hotels, nursing homes and restaurants in Cleveland. The laundry cooperative business model was developed by the Ohio Employee Ownership Center at Kent State University, the Democracy Collaborative at the University of Maryland, the ShoreBank Enterprise in Cleveland, and the Cleveland Foundation. [4] More than 50 jobs have been created since it was founded. [1]
The Ohio Solar Cooperative
The Ohio Solar Cooperative was founded in 2009 and supplies solar panels to local facilities. It develops photovoltaic systems and installs them on the roofs of state and municipal but also private facilities. The cooperative has already created 20 jobs and another 100 are planned. [2]
The Green City cultivation cooperative
The cultivation cooperative, founded in 2008, opened one of the largest hydroponic greenhouses in the country for year-round production of food in 2013. This cooperative supplies regional retailers and wholesalers with fresh vegetables. The aim of the cooperative is to contribute to the local supply of food and to steer the consumption of the residents of Cleveland in the direction of local and healthy food. [5] This cooperative created around 50 jobs. [1]
The city government is the economic partner of the Evergreen Cooperative Association and supports the development of other cooperatives. The following figure illustrates the structure of the Cleveland model:


Source: Overview: The Cleveland Model — How the Evergreen Cooperatives are Building Community Wealth [6]


Positive contribution to regional resilience

Greening and Autonomizing the City of Cleveland - Creating Regional Value

The example of Cleveland shows that it is possible to generate jobs and regional added value even in structural crises. Previously, public institutions in Cleveland such as hospitals, universities or nursing homes, but also private institutions (hospitality industry, etc.) spent several million dollars annually on goods and services outside Cleveland. Thanks to the Evergreen initiative, these funds are now circulating in their own region. [7: 6] Since the public institutions support the development of regional companies financially and at the same time become the main buyers of locally produced goods and services, regional added value is created. In addition, the profits generated by the established cooperatives circulate and remain in the region. Every Evergreen Cooperative is obliged to pay at least 10% of its pre-tax profits into the Evergreen Cooperative Development Fund. Through financial and advisory support, this fund creates incentives for the formation of further cooperatives that are oriented towards the vision and goals of the Evergreen Initiative. [1] The Cleveland model also actively counteracts the negative effects of suburbanization by promoting regional added value, which in turn makes the city more attractive and prevents urban evacuation. In addition, more than 200 jobs were created. When selecting employees / future members of the cooperative, residents from marginalized groups are given preference, which in the long term contributes to reducing the poverty rate. By founding companies and at the same time securing demand, regional autonomy of the city is promoted, which leads to a stabilization of the regional economy.

In addition, the evergreen initiative pursues the goal of making the cooperatives sustainable and ecological. The laundry cooperative is considered to be the most ecological laundry in all of Northeast Ohio. [1] The use of chemicals, water consumption and CO² emissions are minimized. [8] The ecologically sustainable orientation of the cooperatives, as well as the elimination of long transport routes through the creation of regional value chains, contribute to the greening of the city of Cleveland.

Subsidiarity - sensible redefinition of regional self-sufficiency

The principle of subsidiarity is complied with by the fact that in Cleveland the relationship between external procurement and in-house production is being reorganized. The goods and services of the local cooperatives are consumed directly in the region. The laundry cooperative becomes a service provider for regional facilities, the solar cooperative ensures clean energy in the immediate vicinity and the cultivation cooperative supplies local retailers and wholesalers with regional food. The establishment of further cooperatives is in the planning stage. In this way, local supply structures are gradually being built up that ensure a higher degree of self-sufficiency.

Tight feedback through democratic participation and regional embedding

Companies with local roots in particular create secure jobs in the long term, as they are more geared towards the needs of the local community and adapt accordingly. Cooperative-run small and medium-sized enterprises also increase the demand-oriented production of goods and services, because the employees, who are also co-owners of the company, align their business activities more closely with satisfying the needs of their own living environment. The democratic orientation towards specific local needs ensures - in the chargon of resilience research - for tight feedback, i. H. the close, relocalized chain of causes and effects promotes greater responsibility for the immediate living environment. The regional embedding of entrepreneurial activity means that the (ecological) effects are perceived directly and are not passed on to the community as “external effects”. Probably no employee will vote in favor of polluting their own environment.

Strengthening the local community - building regional self-organization and developing local know-how

Everyone in the company can benefit equally from the company's success. Of course, losses are also shared. As a result, all employees are interested in the long-term existence of the company, as they are not only employees, but also equal participants in the company. The Evergreen Cooperatives thus enable shared ownership and democratic control, which encourages the motivation of employees to become self-active and promotes the development of regional self-organization.
By integrating people from low-income fringe districts, the Cleveland model has a socially integrative effect. The Evergreen Cooperatives offer educational measures to reintegrate people with a low level of education into the work process. [5] These integration measures promote and strengthen the local Cleveland community. In addition, local knowledge is developed and used.

Success factors

The central success factor of the Cleveland model is the strategic cooperation of different actors. The role of the public institutions, which in addition to the start-up financing also ensure part of the demand for the locally produced services and products of the cooperatives, is of central importance.
The founding of the respective cooperatives was made possible by the financial support of public institutions. A total of $ 5.8 million was provided by various Cleveland public institutions to build the laundry cooperative. The Department of Housing and Urban Development provided $ 1.5 million, $ 1.8 million in tax credits, $ 750,000 from the Cleveland Foundation, and $ 1.5 million from two Cleveland banks. [4] In addition to the start-up financing for the establishment of the cooperatives, the institutional supporters also become bulk buyers of the goods and services produced by the regional cooperatives. The individual cooperatives receive financial and advisory support from the local cooperative association.
Another success factor is the regional embedding of companies in the community and democratization. The cooperatives are perceived by both employees and other community members as “their” companies that do not work for external shareholders but for the common good.

Opportunities for public support

Cooperatives can have many positive effects: a more demand-oriented rather than profit-oriented economy, a dynamic adjustment to upcoming challenges, the creation of jobs, democratic learning, etc. It is therefore very sensible for such companies to be supported by the public sector. Tax breaks or subsidies can create targeted incentives for the establishment of cooperatives. The public sector should also act as a mediator and facilitator by networking strategically important actors, participating in agenda-setting and continuously supporting the network.
Ensuring the purchase of the goods and services produced is of particular importance for the success of such initiatives. A reorientation of public procurement and an information campaign about the benefits of such initiatives would also have a supportive effect.
The adaptation of the Cleveland cooperative model is particularly recommended for places that are peripheral, are affected by a strong migration of the population, but still have the appropriate infrastructure, spatial possibilities, diverse competencies of the population and relationships with smaller surrounding communities (such as Eisenerz ).


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[1] Alperovitz, G. / Howard, T. / Dubb, S. (June 5, 2009) in Yesmagazin: http://www.yesmagazine.org/issues/the-new-economy/clevelands-worker-owned-boom , last visited on November 10th, 2016
[2] Alperovitz, G. / Wiliamson, T. / Howard, T. (February 11, 2010) in The Nation: https://www.thenation.com/article/cleveland-model/, last visited on November 1, 2016
[3] Breckenridge, (October 20, 2009) on Cleveland.com: http://www.cleveland.com/business/index.ssf/2009/10/evergreen_cooperative_laundry.html, last visited on November 11, 2016
[4] Grassroots Economic Organizing, Geo Newsletter: http://www.geonewsletter.org/node/484, last visited on December 19, 2016
[5] Bradley, B. (June 12, 2013) on Next City: https://nextcity.org/daily/entry/clevelands-evergreen-cooperatives-finding-better-ways-to-employ-locals-keep, last visited on 11/10/2016
[6] Community-Wealth.org, Overwiew: The Cleveland Model — How the Evergreen Cooperatives are Building Community Wealth: http://community-wealth.org/content/cleveland-model-how-evergreen-cooperatives-are-building- community-wealth, last visited on December 17, 2016
[7] Institute for Sustainable Communities, Case Study at: http://sustainablecommunitiesleadershipacademy.org/resource_files/documents/Cleveland,%20OH_1.pdf, last visited on December 19, 2016
[8] Brodwin, D. (July 21, 2016) in U.S. News & World Report: http://www.evgoh.com/2016/08/10/a-cleveland-success-story-u-s-news-world-report/, last visited on December 19, 2016
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Written by Eleonora Wenzel
Category: regional resilience
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