Green Jobs with Roots
For the founders of Cleveland’s Evergreen Coops, putting a handful of people to work at minimum wage isn’t worth it. They are aiming at nothing less than a ground-up economic transformation — one owned by the very people it’s intended to help.
By Miriam Axel-Lute Posted on October 17, 2010
In a couple years, residents of some of the poorest neighborhoods in Cleveland will be the collective owners of the largest collection of solar panels in the state of Ohio. Next door, sixty locations on the Cleveland Clinic’s campus will be serving salads made from locally grown lettuce year-round—where local means not “a farm closer than California,” but a greenhouse staffed and owned by neighborhood residents on a former brownfield mere miles away.
A few years after that, laundry workers in those same neighborhoods will have not only living wage jobs but equity ownership accounts in a green business worth tens of thousands of dollars each.
These are heady things to contemplate for the six neighborhoods surrounding Cleveland’s University Circle, where the current median income is $18,500, unemployment is at least 30 percent (and underemployment another 20 percent), and foreclosure rates are among the worse in the city.
But the Evergreen Cooperative Initiative, which launched Ohio Cooperative Solar and Evergreen Cooperative Laundry in the past year and expects the Green City Growers greenhouse to be operational by 2011, is no pipe dream. Though its ambitions for economic transformation are high, so are its standards for practicality.
The Cleveland Model
Evergreen was launched in 2007 by a working group convened by the Cleveland Foundation and including the Cleveland Clinic, University Hospitals, Case Western Reserve University, and the city of Cleveland. The heart of the Evergreen strategy is the marriage of for-profit worker-owned cooperatives and local procurement.
As part of the formerly industrialized Midwest, Cleveland knows only too well that one of the problems with creating jobs is that sometimes they leave again—outsourced overseas or tempted away by subsidies offered by other desperate regions. Evergreen’s worker-owned cooperatives model sidesteps these issues. Worker-owners are unlikely to vote to offshore their own jobs. Plus, without money being siphoned off to corporate overhead or a profit-minded entrepreneur, cooperatives are in a better position to pay living wages and still be competitive.
The local procurement angle means that the coop’s customers are likely to stay put as well. Rather than launching businesses based on workforce skill sets or entrepreneurial ideas, the Evergreen working group started by looking at the $3 billion per year that the 40 some University Circle anchor institutions already spend on goods and services and asking what parts of that spending they could redirect locally.
They hired Ted Howard of the Democracy Collaborative to do an inventory. From the results, he created a matrix of 30 potential services for which there was high demand among multiple anchor institutions that might reasonably be served through a local cooperative.
Because Evergreen’s founders were interested in long-term transformative effect, they picked from this list based on whether the business could:
- employ at least 50 people, at at least $10.50/hour plus healthcare;
- be competitive, not rely on only one customer, and not displace existing jobs;
- be in a growing sector where they can stand out by creating the most sustainable business in that sector in Northeast Ohio; and
- be profitable enough for worker-owners to accumulate $65,000 in their equity accounts in six to seven years while returning some profits to a collective fund for use in starting new cooperatives.
And they would have to do this while hiring only from within the targeted neighborhoods.
Looked at through these lenses, three business ideas floated to the top:
The first was laundry. Even a single hospital needs 15 million pounds of laundry washed per year, and there are about 50 hospitals and 250 nursing homes in a 50-mile radius of University Circle. There was huge potential for greening with the introduction of water- and energy-efficient equipment and low-toxicity cleaners. And the timing was right as well: Some of the institutions have been working with a vendor that is closing. Many nursing homes have been doing laundry in house but are looking to outsource because their equipment is aging and they want the space to expand. The VA hospital has been driving its laundry 30 miles roundtrip to another VA with an in-house laundry, but that facility is scheduled to close.
Evergreen Cooperative Laundry, which launched in October 2009, is the greenest commercial scale laundry in Ohio, and expects to employ 50 people. The first groups of workers made it through their trial period and became full worker-owners in Summer 2010, and they are on track to be turning a profit by Fall 2010 as planned.
Ohio Cooperative Solar (OCS) was actually the idea of some of the institutions, who came to the Evergreen planners and said they were worried about energy costs and eager to deploy solar on their rooftops as part of their greening efforts. The problem was, as nonprofit institutions, they couldn’t benefit from federal tax credits for solar installation, and so couldn’t quite make the investment pencil out. OCS is the solution: OCS installs, owns, and maintains the panels, gets the tax credits, and sells the energy to the institutions. To avoid seasonal unemployment, in the winter OCS does weatherization.
At the moment OCS is doing most of the installation work, calling in master electricians for the final hookups, but all the workers are in training to be certified to do the entire installation. OCS’s first installation on the Cleveland Clinic is meeting all expectations and the clinic is eagerly waiting in line for a second. OCS has already revised its employment projections from 50 to 75.
Local food is a sexy topic these days—but it often involves farmer’s markets or home-based specialty food businesses, which don’t fit Evergreen’s models. Instead, Green City Growers is building the largest urban greenhouse in the country. The five-acre greenhouse, on a former brownfield near good public transit, will grow lettuce and herbs year-round, incorporating numerous innovative energy-efficiency measures, such as a wind turbine, double insulating curtains, and LED lighting. They have been told by the institutions and distributors that they will be able to sell as much as they can grow. They hope to break ground in Fall 2010.
Miriam Axel-Lute is editor of Shelterforce and associate director of the National Housing Institute. Her email is miriam at nhi dot org.