Community Wealth Building: A New Paradigm of Sustainable Economic Development St. Louis Federal Reserve Bank – Exploring Innovation Week Memphis, TN – May 13, 2013 Ted Howard The Democracy Collaborative

Sources—Edward N. Wolff, Recent Trends in Household Wealth in the United States, Levy Economics Institute, March 2010; Politifact, “Michael Moore Says 400 Americans Have More Wealth than Half of All Americans Combined,” moore/michael-moore-says-400-americans-have-more-wealth-/ moore/michael-moore-says-400-americans-have-more-wealth-/ Wealth Inequality in the United States

The Prevailing Economic Development Paradigm Some of its characteristics and elements include: Subsidies and tax breaks to entice corporations to relocate ($80B) Workforce training not linked to actual jobs ($37B) Regional trickle down strategies that do not reach low- and moderate-income neighborhoods Growth & GDP – toward what end? Low-wage (non-living wage) job creation, often without benefits Exclusion of ex-offenders and others with barriers to employment Gentrification and dispersal of traditional residents “Throwaway cities” and their infrastructure Privatization of publicly owned goods

What is the Community Wealth Building Paradigm? A New Approach to Economic Development that: emphasizes democratization of wealth focuses on place & local economy promotes broader ownership of capital anchors jobs locally stops the leakage of dollars from communities supports individual & family wealth building reinforces stewardship over capital generates revenues to finance public services leverages anchor institutions for local benefit contributes to local economic stability total cost accounting of economic decisions

W omen’s A ction to G ain E conomic S ecurity (CA) Home cleaning industry notoriously pays low wages & has bad working conditions Coop founded in 1995 Mostly Latina immigrants who own the business 5 coops with 100 members Wages of $15/hour plus health Environmentally friendly cleaning techniques

New Community Corporation of Newark (NJ) Founded in 1968 by Monsignor William Linder Employs 1,300 residents of local neighborhoods Community-based business ownership Developed shopping center that houses community-owned business and services Assets exceed $500 million Income recycled to support day-care and after school programs, health services, Youth Automotive Training Center

Washington Electric Coop (VT) Serves 10,000 customers in 41 towns in Vermont Community owns the shares In 2002, 1/3 rd of its power came from nuclear Today: 2/3rds of power is generated from landfill methane 100% from renewable energy sources The New Williamstown Solar Farm: A Sizable Presence on WEC’s Power Lines Tom Garden

Market Creek Plaza(CA) Community-designed mixed-use development; $65 million commercial and cultural complex in low-income neighborhood Community ownership: 423 residents own shares worth $500,000; 20% of equity; will increase to 50% equity Neighborhood foundation owns 20%; will increase to 50% Former brownfield site; adjacent to trolley line; TOD

Namaste Solar (CO)  103 “team” members; one-half are owners  4 to 1 maximum salary ratio  One owner, one vote  #1 market share in CO  2,000+ systems installed  $15 million in revenue

Pioneer Human Services - Seattle (WA) Nonprofit founded in 1962 to serve clients – ex-offenders and drug abusers Initially nearly 100% grant funded Today employs 700 people, most from their client base, in network of their own for-profit businesses (hotel, catering, manufacturing) $55 million revenue; almost no grant funding Anchored in the community

Anchor capital so it doesn’t get up and leave Promote asset accumulation Stop $$ from leaking out of NE Ohio Stabilize and revitalize neighborhoods Develop a model for national impact GOALS

MONDRAGÓN 100+ networked cooperatives

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