Supporters see worker co-ops as way to spread the wealth

Published 4:05 pm Tuesday, January 28, 2020

How one housecleaning business joined the workers’ cooperative movement

By Jon Collins
MPR News/90.1 FM

It was three years ago that LA Luebbers drove nine hours from Missouri to Minneapolis for a job interview as a housecleaner. She got the job, drove back to Missouri and packed her bags.

Luebbers said she was drawn to this specific job by the workplace culture of the Happy Earth Cleaning Services.

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“I was fresh out of college, I was like, ‘That’s not how work is, that’s not how bosses are.’ I was super expecting to go to a place and just be a drone,” Luebbers said. “They just really seemed to care about us as people … and it made me never want to leave.”

With the support of the cleaning company’s founders, employees in January officially transitioned the company into the Happy Earth Cleaning Co-op — a cooperative owned and run by workers.

Employees at worker cooperatives get a say in how their business is run and a cut of the profits. As wealth disparities continue to increase in the country, some are hoping co-ops can make the economy more equitable and democratic.

Happy Earth was founded by Marion and Jesse Dunbar in 2010. Jesse Dunbar said they had both gotten burned out on corporate jobs.

“She was working at a local big box retailer and was miserable,” he said. “She basically had been treated very poorly, and was cleaning for somebody on the side, and came home and said, ‘If I have to put up with this crap, I might as well start scrubbing toilets for a living.’”

Ten years in, Happy Earth now hovers around 20 employees, with about 300 ongoing customer accounts. But the Dunbars were getting antsy to go back to the West Coast to be close to their families — both Jesse Dunbar’s parents are in their 70s. Jesse said he’s “ready to be an employee again.”

But selling the business outright to investors, who may have kept the client list and cut loose the employees, could have undone all the work the Dunbars had done in building the company where they believe employees were treated respectfully.

Marion Dunbar said just because the couple wanted to move didn’t mean their employees should lose their jobs or the perks. It’s the sort of company where employees released a collaborative comic book every year or had pizza parties on the weekends.

“Some of those things that make them feel more appreciated would have gone away because they would make us more profitable,” Marion Dunbar said. “Treating them with respect and having them feel like they’re a part of something is more important to me than having the biggest bottom line.”

That’s when the Dunbars and a core group of employees started to explore more seriously turning the business into a worker-owned cooperative. The owners and a core group of employees went through a course offered by the city of Minneapolis to help residents launch cooperatives. St. Paul has a similar program.

Longtime employees wanted to preserve the company how it was through a co-op, but it wasn’t clear right away how they could legally do that, said Rachel Battles, one of the new worker-owners and the new general manager.

She and the other cleaners also got help from California-based Project Equity and St. Paul-based Nexus Community Partners. Cooperatives can be a way to build and keep wealth that employees created in their own communities, said Theresa Gardella, a vice president at Nexus Community Partners.

“We see worker cooperatives as a way of, again, democratizing wealth. We think it’s a way of anchoring wealth,” Gardella said. “Although it might not be on a large scale at this time, this does have the potential to really shift the way local economies are.”

There are over 1,000 cooperatives active in Minnesota, which bring in $1.62 billion in wages annually, according to a study from the University of Wisconsin Center for Cooperatives. Nationwide, there are about 30,000 business cooperatives. Organizations that track cooperative businesses say there’s been increasing interest in cooperatives in recent years.

Gardella said her group started to support businesses transitioning to cooperatives as a way to build wealth in communities, especially for communities of color and others that historically have had wealth stripped from them.

“The No. 1 reason businesses don’t sell to their employees is because they don’t know of it as an option,” Gardella said. “And when we heard that, we thought, ‘Well, that’s a solvable problem.’”

Transitioning to a co-op is not all easy. It involved setting up a board, outlining a workflow and figuring out how to fund the purchase. Even with the Dunbars’ support and all the help from other groups, creating Happy Earth Cleaning Co-op took about three years from start to finish.

Five of the Happy Earth’s workers have bought into the co-op so far, which requires $1,000 investment over a year, including a down payment of at least $150. All other employees are eligible to join after six months of working at the company. Owners share in a cut of the profits, which they estimate could add up to thousands of dollars for each owner at the end of the year if the company does well.

Worker-owner and sales manager Tom Crouse said he hopes Happy Earth can serve as an example for other businesses that want to make the leap to a cooperative, especially as baby boomers look to retire from their small businesses.

”Instead of selling or dissolving any businesses, transforming into a cooperative can be a great alternative,” Crouse said. “It keeps the economy alive, hands the business down to a new generation.”

For the workers, the co-op is more than being about money or even preserving the culture of Happy Earth.

Worker-owner LA Luebbers said the experience has changed how she approaches her work life.

“When I first started working here, I was like, ‘Man, I don’t want responsibilities. That’s too much pressure,’” Luebbers said. “But now, I want to take on challenges and responsibility, I want to have something to work on that’s actually hard — because now I believe in myself.”

Happy Earth’s previous owners, Marion and Jesse Dunbar, said they’re amazed at how their employees have grown through the process of starting the co-op. As they prepare to move back to Seattle, they said it feels good to know that their family business is now the employees’ family business, too.

“Every company tells you to act like you own the company and take ownership, but they don’t ever give it to you,” Marion said. “So, we gave it to them.”