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Employee Cooperatives May Help Narrow Racial Wealth Gap

While most wealth gaps are part of entrenched racial disparities from generations ago, employee-owned co-ops, like the Atlanta-based Pecan Milk Cooperative, allow employees to build assets within their work.

Nijil Jones (right) and Antonio Little pose outside Leaven Kitchen
Nijil Jones (right) and Antonio Little pose outside Leaven Kitchen on Thursday, April 13, 2023. They and another four members co-own a Pecan Milk Cooperative that produces milk for local markets.
(Miguel Martinez/The Atlanta Journal-Constitution/TNS)
(TNS) — Nijil Jones is practically giddy taking a large cardboard box out of an industrial fridge. Inside the chilled box are what Jones calls the best pecans in Georgia.

And Jones, 29, should know. In 2014, Jones, who uses they/them pronouns, started the Pecan Milk Cooperative, a Black, queer worker-owned co-op. They have been using different nuts to make plant-based milk since 2013, first just a batch of almond milk using their roommate’s blender, but then quickly turning to pecans.

The idea of running a traditional business did not appeal to Jones, which is what led them to create a cooperative where the employees also were owners in the company.

A new report from the Morehouse College International Comparative Labor Studies (ICLS) program highlights how the equity and wealth-building that comes from employee ownership can address current economic challenges for small businesses and ultimately help narrow the racial wealth gap.

The six members of the Pecan Milk Co-op all have equity in what they are building and make decisions about the business collectively.

“My own values kind of understood that employees are usually exploited,” Jones said. “Usually, the boss makes a profit off of employees’ work and so I didn’t see myself doing that.”

Atlanta has the highest income inequality among large U.S. cities, according to a recent Atlanta Journal-Constitution analysis of data from the United States Census Bureau. The median income for a Black household in metro Atlanta was around $61,000 in 2021, while the median income for white household was more than 50 percent higher — roughly $93,000.

Differences in the rate of homeownership, another marker of wealth, are also stark. In 2021, 53.3 percent of Black households in metro Atlanta owned their own homes, compared to 78.6 percent for whites, according to data from the U.S. Census Bureau.

These gaps, experts say, are part of entrenched racial disparities which took root generations ago.

According to the new Morehouse report, this inequality was fostered in part by successful businesses in Atlanta “built on a foundation of working poor – a form of the classic Southern ‘plantation’ economy.”

While there are different forms of employee ownership, like employee stock option plans, the Morehouse report focuses on employee-owned cooperatives like the Pecan Milk Co-op.

Cynthia M. Hewitt, founder and director of the Morehouse ICLS program and a co-author of the new report, said the greatest reported financial benefits of worker co-ops are in asset or wealth accumulation.

For the members of the Pecan Milk Cooperative, the wage they set for themselves of $15 an hour is much higher than the federal minimum wage of $7.25 an hour. The co-op members are now talking about raising wages to $17 an hour.

Some co-ops offer annual profit sharing and when workers leave a co-op, they can sell their shares back to the company.

Transitioning businesses to employee-owned cooperatives could also be a solution for the small businesses started by the “Silver Tsunami” of Baby Boomers who are now reaching retirement age but do not have a succession plan. Only 15 percent of businesses are passed on to the second generation, according to the report. Without a plan, the local establishments are closing or being bought by larger conglomerates.

“Communities are losing their foundational businesses,” Hewitt said. But transitioning a business to employee ownership allows the older owners to retire and is “an opportunity to fill a social need.”

Morehouse is also working to help business owners make those transitions. The Morehouse Innovation and Entrepreneurship Center runs training programs for local business owners. The center is working on including workshops on succession planning and transitioning to employee ownership in those programs, said Tiffany Bussey, the center’s executive director.

In the future, Morehouse could add a dedicated curriculum on employee ownership for its students.

“I would love to hope that one day we are perhaps the only school that offers an employee-ownership track,” Bussey said.

But being in business as a co-op also comes with its own set of challenges, like “finding dedicated and loyal people,” said Pecan Milk Co-op employee-owner Antonio Little. Little, 37, who’s known as Chef Sunni and who also uses gender-neutral pronouns, joined the cooperative in 2018 and helps run the kitchen.

“A lot of people don’t have a true passion, they’re in it just for money,” Little said.

Sometimes there are too many cooks in the kitchen when making collective decisions, literally.

“I remember a few years ago, Sunni and our other coworker-owner were in the kitchen, doing stuff, and then we had a meeting,” Jones said. “All these people trying to vote on what Sunni and our other co-worker should be doing, and they didn’t like that.”

As a group, they are now working on formalizing roles in the organization to make decision-making easier.

Ultimately for Jones, being part of a cooperative means having a set of values that guides all of their business decisions.

They source their pecans from New Communities, a 1,638-acre property near Albany that was once a slave plantation and is now owned by Black civil rights activists.

Jones said some companies will leave from where they started to seek cheaper labor. But Jones’ co-op won’t be one of those.

“Concern for community means caring about the Earth and the environment, the impact that we’re having as part of our values, and concern for community means sticking with the communities that we’re in,” Jones said.

©2023 The Atlanta Journal-Constitution. Distributed by Tribune Content Agency, LLC.
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