Cooperatives in Spain as an instrument to face unemployment

Published on Current Concerns (Source: El País from 31 August 2012), by María R. Sahuquillo and Raquel Vidales, Nov. 19, 2012  (Translation Current Concerns).

… Do not wait for the state:

  • The history of the Gerena sports center is an example of how cooperatives take over various social functions which the welfare state no longer can fulfill due to the crisis. But there are more such examples: health services, care for the needy and disabled, financial services, education, renewable energies, cultural activities, agriculture … In Spain there is a total of 22,171 cooperatives, according to the Spanish Confederation of Social Enterprises Cepes.  
  • More than half of them are focused on services. These are cooperatives that will survive, although the total numbers have declined due to the real estate disaster which hit housing cooperatives. “The cooperatives that arise now, are working cooperatives, consumer and user cooperatives in education or work …”, says Francisco José Martín, a specialist in social economy. From January to March this year, 223 cooperatives of this kind have been founded according to the Ministry of Labor.
  • Cooperatives have been around for more than 100 years in different sectors of the economy worldwide. Now, particularly in difficult times, many of them offer innovative responses to the challenges posed by the crisis. “These are solutions that develop in the cooperation among people who do not wait that public administration solves their problems; however, they are looking for a solution within the specter of their own resources,” analyzed Iñigo Bandrés from the network for Social and Economic Alternative Reas. “Just like after the Civil War, when many villages had no electricity or running water and founded their self-supply cooperatives, this can serve as a model to cushion the impacts of government cuts in many social areas,” confirms Ana Isabel Ceballo, president of the Association of Consumer Cooperatives in Spain (UNCCUE).

An old people’s home, in which human beings count more than their money: … //

… Opening of a business in times of crisis:

  • Felix Martin, Secretary General of the Spanish Association of Consumer Cooperatives, confirms that cooperatives can not only fill the gaps caused by the cutbacks in the welfare state, but also provide a good opportunity to open a business in times of crisis. “It’s a more natural way to do that with more support, because there are cooperative members. And therefore it is bearing less risk”, he assures.
  • Cooperatives enjoy the same tax benefits as other types of companies, but they have to invest a part of their profits into a fund for the education and training of their members and in social activities for the promotion of cooperatives. However, according to the experts, one cannot count on the necessary public support. “There is neither any support nor any policy promoting social economy or cooperatives,” Bandrés says. Moreover, many cooperatives that have taken over the duties of the public service look helplessly on a large part of the funds being further reduced.
  • But despite all this, these and other cooperatives resist the impacts of the crisis. According to statistical data they can cope better than other types of businesses by simply tightening their belts. “They adjust their working conditions to maintain the jobs,” says the expert of Reas. Or they even try to create more. “We are not obliged to make profit and are not accountable to capitalist entrepreneurs. Our only objective is to gain our pay, 1,200 euro per month, by good management and to offer the community a good service”, says Francisco José Martín, president of the cooperative of Aquasport. Therefore, the sports center in Gerena is able to offer many more activities than the company which had held the license from 2008 to 2011 and which confined itself to sell subscriptions and keep the grounds in order. With the current management, they can handle the ups and downs of the economy much better: Their objective is not to grow, but to remain.
  • Joan Segarra, head of department for initiatives in the social sector of the Federation of Catalonian Workers Cooperatives, emphasizes other reasons why this type of business is growing in the midst of the crisis: the inexorable increase of the unemployment rate and self-employment as an alternative. “In recent times, all counseling seminars for young entrepreneurs have been fully booked out. Many participants have lost their jobs and decided to make the best of it and to found a cooperative,” he explains. And why do they prefer a cooperative to a private limited company? “In many cases, it happens for ideological reasons. It is a good model in which working for the benefit of the people and not serving the capital has the highest priority. It is one of the leading principles of the so-called social economy to reject the principles of capitalism, which have caused the crisis,” is Segarra’s answer.
  • The Spanish Association of working cooperatives Coceta claims that from 2009 to 2011 3,083 such cooperatives were newly established and hence 28,558 jobs were created. The report of the International Labor Organization ILO confirmed this growth according to which these companies were more resistant to crisis. Simel Esim, head of the Department for Cooperatives in the ILO, mentions the example of financial organizations: “The cooperative banks have improved their profitability during the crisis because their readiness to take risks is smaller and they are less profit-seeking. They strive not to freeze loans, they try to keep certain stability in interest rates, and their loan conditions are generally more bearable”.
  • The consumer cooperatives have also experienced a large growth in recent years. “Not so much, or not only, due to the crisis, but because many citizens would like to have access to products that they don’t find so easily on the market or that are too expensive if you buy them individually”, explains the Secretary General of Hispa-Coop. An example of a recently established cooperative is Som Energía. It was founded in 2010 in Girona with 150 members who wanted to buy 100% renewable energy without additional conventional energy. Today, the cooperative has 3,267 members already, and the group started its first production projects in addition to their marketing work.
  • In Almocafre they are already veterans. This ecological consumer cooperative has existed for 15 years now. Its task is the distribution of organic farming products; in addition to the direct sales of the producers to the 150 members of the cooperative they also market private people’s products. “It is a way to act ecologically sustainable with the help of the shopping basket, but also to support independent family farms that feel connected with the land and use artisanal methods”, explains one of the members of the cooperative, Miguel Navazo.
  • There are also mixed cooperatives in the fields of labor and consumption. For example Frescoop, headquartered in Manresa near Barcelona. The cooperative was formed less than a year ago. Farmers from the District of El Bages joined and searched for consumers who wanted to buy fresh products at a good price, “without any intermediaries, who increase the total costs, and without having to go to the local markets”, explains Alba Rojas, representative of the cooperative. Online purchases are processed through a platform and they offer various meeting places where customers can pick up their goods. 120 Consumer cooperative members and another 50 on the side of the producers have already joined. […]

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