5

THE PRINCIPLE OF GOOD WORK

PUTTING LABOR BEFORE CAPITAL

The worker- centered economy of Cooperative Home Care Associates

“I never knew how many case hours they would give me each week, and I never had enough hours to make a decent paycheck. They gave me no health insurance, and no benefits.” That’s how Octaviea Martin, the mother of two young children, described conditions at the Bronx- based agency where she worked for four years as a home health aide, caring for the disabled and elderly. Her experience is typical of the 1.8 million people who work as home health aides. These workers are 90 percent women, predominantly women of color, most often from immigrant communities. They’re commonly on welfare or just off it, often haven’t completed high school, and hold jobs of low status in the healthcare system. They face what many millions of workers face today: unstable part- time hours, few or no benefits, little respect.¹

Then Octaviea found work with Cooperative Home Care Associates (CHCA) in the South Bronx, which is a worker- centered, for-profit company. The difference was stark. At CHCA, she enjoyed steady income, health insurance, personal days off, and people to turn to when she needed help.²

CHCA was launched in 1985 as a social experiment in creating good work for home health aides—and, in the process, creating higher- quality care for low-income, frail clients. It’s succeeded to a remarkable extent, both as a business and as a model of a democratic economy. It has revenue of more than $65 million and has been in operation for 33 years, with all but three of those being profitable. The company is a cooperative fully owned by its workers and employs a massive 2,300, about half of whom are now owners. And the company is a certified B Corporation, which means it has a mission of serving the common good embedded in its governing framework.

In a community plagued by generations of unemployment, the company recruits and trains more than 600 workers every year and supplies them with a job at the end. Once employed, workers get case managers and peer mentors to help find childcare or navigate immigration concerns and work demands. Workers exercise voice through a union, a labor-management committee, and voting power over 8 out of 14 board seats—seats held by workers themselves. Benefits are generous, and the company is committed to creating full-time work of at least 35 hours a week.

The work is hard and not high paying. Yet workers stay. CHCA’s turnover rate, at 20 to 25 percent, is less than half the industry average of 66 percent.³ The certifying group B Lab has singled out CHCA as one of a small handful of companies deemed “Best for the World,” for creating positive social impact.⁴

THE CRISIS OF GOOD WORK

“An island of human decency,” CHCA has been called.⁵ It is indeed an island in a global extractive economy increasingly hostile to worker prosperity. Pay to workers, even with recent small upticks, has long been stagnant in Europe, the US, Japan, and other wealthy nations.⁶ In the US, secure work has given way to insecure, part-time, contract, gig- economy–type labor, with more jobs threatened by advancing automation. The result is a dissolving middle class and the swelling of the working poor. Those lucky enough to retain full-time jobs often face crushing workloads and meaningless work—with bleak prospects ahead for the next generation. We’re in the midst of a massive crisis of good work, a degradation of work and workers that’s been advancing silently for decades.

Economists scratch their heads over why wages have barely budged in decades, even as unemployment has plummeted; there’s little agreement among them on the reasons. The New York Times has called it a “mystery” and an “economic puzzle.” Researchers point to the decline of unions, globalization, outsourcing, the Uber economy, automation—all seemingly disparate forces. At the 2018 gathering of the European Central Bank in Sintra, Portugal, a telling comment was made by Aviv Nevo, a professor of economics at the University of Pennsylvania. Summing up economists’ uncertainty about wage dynamics, he said, “We’re all drunks looking under the lamppost.”⁷

That’s the old joke about looking for missing keys where the light is better rather than where the keys were lost. If we step outside the brightly lit areas of mainstream dialogue, we find the darker fact of increasing extraction by capital and how that’s driven by the bias lying hidden behind stagnant wages, bias in favor of capital, and bias against labor, which is part of the logic and rules of the game.

BALANCING MISSION AND MANAGEMENT

CHCA is driven by a different logic—the principle of good work. The company mission is emblazoned on a chartreuse wall in its entryway: “Committed to delivering quality care by creating quality jobs.” Stepping into CHCA’s spotless offices in the gritty South Bronx, one sees on the faces of the receptionists a subtle something. The absence of fear, perhaps. Or the presence of belonging.

“In the 1980s, this was a pretty rough business,” said Michael Elsas, seated in an office around the corner from reception. “No one cared about the workers.” This white man—with a halo of gray hair and a trim beard, dressed in blue jeans, blazer, and cowboy boots—came to CHCA as president in 2000, serving for 16 years as the firm quadrupled from 500 to today’s 2,300 employees. He served as a consultant to CHCA in 2017; today he’s retired.⁸

CHCA is now run by a woman of color, Adria Powell, the daughter of cofounder Peggy Powell. Adria began working at the company part-time while in high school. Now in her 40s, she’s been president since January 2017. Adria makes $200,000 a year, the same as Michael before her. “The president of the cooperative has never made more than ten times the lowest wage earner, and that continues to be the case for me,” she said.⁹

“A multiple of ten is where we should be as a society,” Michael said. He pointed, by contrast, to the largest 350 US businesses, where CEO pay today is 271 times that of the average worker.¹⁰

As strongly mission- oriented as CHCA is, it is first a business. “If you don’t manage the company well,” Michael said, “you’ll have all the bells and whistles of a co- op, but you won’t have a business.” Home healthcare isn’t an easy business, he continued. “There’s lots of investment in the workforce and the back office, billing and collecting properly, legal compliance. You have to have expertise.”¹¹

He emphasized that it’s equally true that “we’re much more than a business.” When management restructures processes, “we think: what would be in the best interest of a home care worker?” Michael continued, “It’s not that the workers run the place.” Cofounder Rick Surpin was emphatic on that point. As he once put it, his vision is management that is “participatory” but not “collectivist.”¹² (A collective is an organization managed without hierarchy in which every member has equal decision-making power.)

TRANSFORMING OWNERSHIP FROM EXTRACTION TO BELONGING

“It would be hard to take all these practices and put them in a publicly traded company,” Michael said. CHCA was incubated by the nonprofit Community Service Society (CSS), where Rick worked, which sought to create jobs by forming worker- owned firms. CSS absorbed the early risk, then when the business was stable, transitioned it to worker ownership to ensure workers’ interests remained top priority.¹³

Workers have a chance to build their skills, as 40 percent of administrative staff comes from the field. And as Adria said, “We have 300 workers trained as ambassadors, to go out into the community and talk about the co- op and why places should want to do business with us.”¹⁴

Workers have various forms of voice, including voting for the board and serving on the labor- management committee, a key place to resolve conflict. But most important is the sense of community they feel. As cofounder Peggy put it, “It’s about feeling like an outsider, and this place helps you feel like an insider.”¹⁵ In a book-length study of CHCA’s culture done years ago by oral historians Ruth Glasser and Jeremy Brecher, staffer Betsy Smulyan told them that the sense of ownership CHCA aides feel comes less from having a vote in governance than from informal interactions—coming to the office, chatting with people. That lived sense of community is important in the isolating work of home care.¹⁶

At CHCA, in play is a subtle shift in the unconscious view of what a company is. In an investor-centered enterprise, firms are viewed as objects; that’s the perspective of owners who stand apart from a firm, seeking to extract wealth from it. When owners stand inside a company doing its daily work, the nature of the firm is transformed: from object to community. Ownership is transformed from financial extraction to human belonging.

BUILDING A POWERFUL ECOSYSTEM FOR MISSION

A business seeking to maximize profit would have chosen a different niche in the home care market. CHCA primarily serves clients on Medicaid, who are the poor and persons with disabilities—not the most lucrative clients.

A central aim is good wages, but that’s challenging. In 1997, CHCA prided itself on paying wages and benefits 10 to 20 percent higher than the industry norm—plus dividends of between $200 and $400 a year.¹⁷ Then public funding for home healthcare was slashed 40 percent and one in five provider agencies closed. CHCA survived with anchor support from places like Visiting Nurse Service of New York (VNSNY). Because of CHCA’s superior work, VNSNY—which accounted for 60 percent of the NYC market—was willing to pay more.¹⁸

CHCA also set out to shift the market itself. The company created Paraprofessional Healthcare Institute (PHI), a nonprofit policy and consulting arm that handles training for CHCA and has helped raise the wage floor for all home healthcare workers.¹⁹ And CHCA founding president Rick Surpin left to launch a third organization, the nonprofit Independence Care System (ICS), a Medicaid managed long- term care plan serving adults with disabilities and the elderly, which by 2018 had grown into a massive $450 million enterprise. ICS over 20 years proved to be a major engine for CHCA’s growth, contracting in 2018 for more than 1,100 CHCA aides. But in spring 2019, ICS began a major restructuring, closing down and reopening in a smaller new form—including a shift of CHCA clients to VNSNY. The long- term impact on CHCA is uncertain.²⁰

Today the engine for growing this model is a movement to replicate CHCA, with 15 worker- owned home care agencies now in existence or in formation.²¹ A leader of this movement is ICA Group, founded by Steve Dawson, which aided CHCA’s launch through technical assistance and loans from what is now the Local Enterprise Assistance Fund. ICA has helped develop home health companies in five states. For three years, there’s even been an annual conference for this movement—the National Home Care Cooperatives Conference—organized by the Cooperative Development Foundation.²²

The possibilities for growth are immense. Home health aide jobs are projected to expand by 1 million by 2024. “Employee ownership has a unique value- add to the sector,” David Hammer executive director of ICA Group told us, because the model creates competitive advantage through higher quality service and lower turnover. Worker cooperatives could dominate this niche, David believes—and Adria agrees.²³

Private sector players tend to avoid low- profit sectors like this—as was true with rural electrification, where consumer- owned electric cooperatives now dominate. It’s telling that the national conference for home care co- ops is held at a finance company owned by 900 rural electric co-ops. The size of this one lender—the National Rural Utilities Cooperative Finance Corporation—is greater than anyone might guess, with assets of $25 billion. ²⁴ That hints at the scale possible when co- ops dominate in a niche.

THE RIGGED GAME OF WORK

Throughout this movement to make more CHCA- type companies, the shared aim is good work. That’s an aim in contrast to the extractive economy that has been systematically expelling workers and worker income. Unemployment is reported as low—in 2018, around 4 percent in the US. Yet this figure only counts the jobless who’ve looked for work in the last four weeks. When the jobless- and- looking period is extended to a year—including part-time workers seeking full- time work—unemployment doubles to 8 percent.²⁵

The underemployed are vaster still. The Government Accountability Office, in a 2015 report, estimated that contingent workers—people getting by with temporary, part-time, self-employed, contract, or Uber- economy–type employment—were a jaw- dropping 40 percent of all workers.²⁶

It’s little wonder that in recent decades income has been rising slowly for the 117 million adults on the lower half of the income ladder.²⁷ The fruits of productivity have flowed to capital. The slice of GDP going to corporate profit doubled in recent decades—from 6 percent to 12 percent (see Figure 1).²⁸

FIGURE 1. Corporate profits vs. GDP vs. labor income since 1970.²⁹ The Index places the three trends on the same scale so that relative growth can be compared. (Source: U.S. Bureau of Ecomomic Analysis)

What’s at work is the shattering of human lives. Among the many ailments suffered by the jobless are shortened life spans, demoralization, increased chronic disease, and opioid addiction. It’s harder to recover from a period of joblessness than from the death of a loved one or a life-changing injury. Good work brings us not only income but a sense of identity, a feeling of self-worth, the energy from having a purpose, the sense of pride in playing a productive role in the community.³⁰

In favoring capital over labor, our economy works against the wellbeing of most people. A key reason is our notion of ownership. The tenuous relationship shareholders have with public corporations—with shares held for minutes by those who do not know the names of “their” corporations—is dignified by the name ownership. Workers who go to a company every day, producing its wealth, are dispossessed.

An economy designed for the flourishing of all is an economy centered significantly on labor. It’s a social order where labor deserves full membership in the economy, much as blacks and women won full membership in the polity. In the words of Thomas Paine, a key principle of democracy has to do with the common person and “whether the fruits of his labor shall be enjoyed by himself.” Paine’s vision was of “every man a proprietor.” The modern equivalent is every employee an owner.³¹

Asset ownership is foundational to creating a worker- centered economy. As the CHCA ecosystem shows, other approaches are also needed, including minimum wage increases, unions, policy protections, and anchor institution support.

LABOR AS A COST TO BE ELIMINATED

Most basic is shifting our mindset about the nature of labor. British coal economist E. F. Schumacher, in his seminal 1973 essay, “Buddhist Economics,” invited us to challenge the assumptions we hold unconsciously about work and workers. We tend to view work as a necessary evil, he said. For employers, it’s “simply an item of cost, to be reduced to a minimum if it cannot be eliminated altogether, say, by automation.” From the point of view of workers, work is unpleasant, to be undertaken grudgingly, with leisure vastly preferred. “Hence the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view of the employee is to have income without employment.”³²

In a capital- centered economy, superior persons are those who possess capital, leaving them free from labor, while those forced to labor are socially inferior. Schumacher offered a corrective, observing that work potentially enlivens our highest selves, allowing us to produce the best we are capable of. To organize work so that it becomes “meaningless, boring, stultifying” for the worker, Schumacher argued, is “little short of criminal.”³³

Work as a way of developing human capabilities is what CHCA is about. “I’ve often felt invisible and I feel that most people who are born working class feel invisible,” cofounder Rick Surpin once said. With CHCA, the aim was to create a place “where invisible people can feel visible and valued.”³⁴

Building such empowerment in a workplace is complex. CHCA cofounders acknowledged the inevitable tension between running a viable business and realizing cultural ideals. Peggy recalled that, in the early days, “we painted this picture like everybody was equal,” and then when managers exercised their power, “we began to be distrusted as being hypocritical.”³⁵

Having equal dignity in an employment situation doesn’t mean there are no managers. Workers don’t vote on all decisions, any more than citizens in a city vote on which streets are paved. Any social order—a city, a nation, a workplace—requires competent management, selected based on skills and empowered to perform their jobs.

The genius of CHCA seems to lie less in worker voting power than in democratic purpose. This company places at the center of its concern the creation of good work, good lives, for low- income black women, Latina women, immigrant women. In the words of our colleague Ronnie Galvin, vice president of engaged practice at The Democracy Collaborative, “If we don’t have a movement that is fiercely centered on the reality” of such women—those who stand at the intersection of bias based on gender, race, and class—“then we will tinker at the margins” of the system. When we center our work on the most marginalized, he wrote, we can trust that this means “we all win.”³⁶

THE FIGHT OF OUR LIVES

Today CHCA is battling converging headwinds, even as it works to turn around a decline in worker- owners from prior years. Becoming an owner requires payment of $1,000, with most paying $50 upfront and the rest through weekly payroll deductions of $3.65. Workers get the $1,000 back when they leave, meanwhile potentially receiving annual dividends. But in four recent years, no dividend could be paid. On top of that, CHCA onboarded hundreds of workers from other agencies, with CHCA staff not always having time to educate them about ownership. From a high of 70 percent in 2007, the number of worker- owners dropped below 50 percent.

But that number has been rising for two years, Adria said. In 2017 and 2018 CHCA paid dividends, and 2017’s was a record high at $800 for the average worker. The number of worker- owners has now rebounded from a low of 850 to 1,100. “We went to human resources and said, this is part of our roots, we need to get back to this,” Adria emphasized. She added that the new organization Certified Employee- Owned (Certified EO)—which offers certification and branding for employee- owned companies—was also an “incredible” help in developing marketing materials for workers inside CHCA.³⁷

This year, 2019, the new mandated minimum wage for New York state kicked in, at $15 an hour. Reimbursement rates are not keeping pace, making cash flow a major challenge. Medicaid rates factor in the wage increase, but managed long-term care plans don’t necessarily pass that entire increase on to providers like CHCA, Adria said. CHCA can end up short on each hour. “With 3 to 5 million hours, every nickel, you feel it,” she said.³⁸ Other high-road employers and CHCA are working with Service Employees International Union (SEIU) Local 1199 on solutions, like ensuring full compliance by care plans. “For those of us organized by 1199, the union makes sure the legislation is carried out,” Adria said. “But not every organization has 1199.”³⁹

Meanwhile, there’s also the restructuring of ICS and the uncertainties it leaves in the air. “We’re in the fight of our lives,” Adria told us. The year 2019 will be pivotal. Yet as she put it, “We’re ready to do what it takes to be here at least the next 30 years.”⁴⁰