More than three years ago, A Slice of New York—called ASONY for short—became the first brick-and-mortar retail business in Santa Clara County to invite their workers to become equal partners in the company.
Three years later, ASONY is still one of the few retail business in Silicon Valley to hold that distinction. If Kirk Vartan, who co-founded the pizzeria in 2006 with his wife, Marguerite Lee, has his way, a number of businesses will start making a similar transition to the cooperative model.
“We don’t want to be the only ones doing the co-op model,” Vartan said in an interview with San Jose Inside. “We want more businesses implementing this structure, and we’re going to do whatever we can to increase that number.”
Step one of that process begins at noon Wednesday, when Vartan will be part of a roundtable discussion to talk about how retiring Baby Boomer business owners—those born between 1946 and 1964—can turn to worker cooperatives rather than selling to a private investor or shuttering their company for good.
The event, called Worker Cooperatives: An Alternative Business Model in the Covid Economy and Beyond, will also include panelists Zen Trenholm, of the Democracy at Work Institute; Hilary Abel, of Project Equity; Santa Clara Mayor Lisa Gillmor; and Assemblymember Ash Kalra.
The event will be streamed via Facebook Live, hosted by Rep. Ro Khanna’s office.
“Worker cooperatives are a proven, effective tool for creating sustainable, dignified jobs in the modern economy,” Khanna said in a statement to San Jose Inside. “The worker cooperative business model empowers entrepreneurs to benefit directly from their hard work, the pinnacle of the American dream.”
Under the cooperative model, workers can become equal partners with the founders by becoming a member, gaining ownership and a vote in policy decisions. Worker proprietors also divvy up profits at the end of a business year.
“Cities all over the world have implemented this structure, but we don’t do it a lot here [in the U.S.],” Vartan said. “A big part of that is mostly due to a lack of awareness.”
So why would an owner transition to a cooperative model, and what benefit does it have to them and their employees? One of the biggest benefits, Vartan says, is it allows the business to live on, run by people who are already invested in its success.
“If I was an owner looking to get out and find something that is equitable, not just for employees but for myself, this works because I’m selling at a fair price to people I care about,” he said. “I know the business will be cared for and I’m making money off that transaction.”
Vartan is quick to admit the business co-op model may not be for everyone. To be most successful, a company’s culture should align with the co-op values of worker equity, empowerment, respect and decision-making, “which is part of the challenge—if these things are not part of your work culture, you can’t force that,” he said.
Race to Retirement
Baby boomers own close to half of the nation’s privately-held businesses, employing one in six workers nationwide, according to the National Cooperative Business Association.
That’s why the landmark Mainstreet Employee Ownership Act came at a pivotal moment in 2018, as a generation of Baby Boomer small business owners began to prepare for retirement. The law, which allows the Small Business Administration to guarantee loans to employees wanting to buy the company they work for, also gives the cooperative model some major credibility.
“That’s a really big deal because by that legislation passing, it takes kind of what is a formerly hippie fringe idea ... and makes it mainstream,” Vartan said.
Khanna has long championed worker cooperatives as a way to break down growing economic inequality in California and across the country.
“If we’re serious about tackling the dire income inequality in our country, we need to support alternative forms of corporate enterprise,” he said. “We’ve seen U.S. worker co-ops double in the last five years, and that number is only going to climb. Let’s put workers first and ensure our economy benefits every participant.”
Note: The roundtable discussion will be streamed live on Facebook.com/RepRoKhanna from noon to 1pm Wednesday.