Some Illinois lawmakers want to make it easier for worker cooperatives to grow.
Co-ops allow their employees to also be the owners. But state law doesn’t recognize them as a business entity, which makes it hard to get financial backing.
State Rep. Carol Ammons, a Democrat from Urbana, is sponsoring legislation that would change that.
“It’s very difficult for traditional banking institutions to work with a cooperative model, unless we correct the legal definition of cooperatives,” Ammons said.
Advocates say worker co-ops create dignified jobs with living wages in areas with low employment.
“We have seen that worker cooperatives are a proven model for communities of color to own and grow their businesses democratically, generate a healthy income and learn how to work together.” said Ana Guajardo Carillo, executive director of Centro de Trabajadores Unidos (United Workers Center).
More than 60 percent of new co-op members are people of color, according to the Illinois Coalition for Cooperative Advancement. More than two-thirds of new members are women.
One of those members is Socorro Paz, who co-owns a catering business called Cooperativa Visionarias.
"We can have our own and dignified work, and be able to change the vision of owner to employer... and all of us be owners,” Paz said. “We want our community in the Southeast Side of Chicago to be able to unite forces and be able to show our talents as we transform our mission.”
Illinois law already recognizes some producer and consumer co-ops, like agricultural producers. But advocates argue it could better support worker-owned and controlled models.
Camille Kerr is an executive fellow with the Rutgers Institute for Employee Ownership and Profit Sharing and a co-op member.
“Many of these businesses are start ups and are trying to build,” Kerr said. “The current bills don’t serve the needs of these businesses — to create access to capital, to have the flexibility they need, to grow to the size where they can have hundreds, if not thousands, of employees to serve these local communities.”
The legislation is House Bill 3663.