It’s dark days for the U.S. labor movement. Within weeks of taking office, President Trump fired National Labor Relations Board (NLRB) member Gwynne Wilcox without cause or due process—an unprecedented move that directly violates the statute establishing the Board as an independent agency. Although the District Court for the District of Columbia recently ordered Wilcox’s reinstatement, Trump’s attack on the NLRB signals a broader erosion of federal labor protections in the years ahead.

Worker cooperatives offer a light in the darkness. Unlike traditional corporations, which rely on government enforcement of federal labor laws to safeguard workers’ rights, cooperatives give workers direct control over their workplaces. And while they are no panacea, worker cooperatives can address root causes of economic inequality and provide a sustainable path toward worker empowerment and economic justice.

What Are Worker Cooperatives?

In a worker cooperative, employees own the business and share profits based on their labor contribution. They elect the board of directors and follow the principle of one worker, one vote. By contrast, workers in traditional corporations generally have no voice in major decisions and no right to a share of profits.

The impact of this structural difference is profound. While executives at conventional corporations earn 344 times the wages of their employees, the average pay ratio in worker cooperatives is just 1 to 1.45. Worker cooperatives can be more productive, more attentive to quality, and less likely to lay off workers in times of crisis. They also serve as community strongholds, hiring locally and reinvesting more into local economies. By building wealth in historically marginalized communities, worker cooperatives create opportunities for individuals who have long faced barriers to stable, quality jobs.

A Rising Tide

Worker cooperatives are on the rise. The Democracy at Work Institute estimates that there are approximately 1,300 worker cooperatives across the country, employing 7,000 people and generating over $550 million in annual revenue. The number of worker cooperatives has increased by 20% in the past two years and has tripled over the last decade.

In Cambridge, Massachusetts, this movement is taking shape in real time. In 2023, Circus Cooperative Cafe opened in the former location of Darwin’s Ltd., a coffee chain that had shuttered in the wake of heated union negotiations. A group of former employees stepped in to buy the business and reopen it as a worker cooperative. Through a combination of crowdfunding, personal investment, and a loan from the Cooperative Fund of the Northeast, they made their vision of a worker-owned cafe a reality. Now, every new employee at Circus joins on an ownership track. On the cafe’s website, worker-owner May writes, “I believe that everybody deserves to have democratic control over their work, their school, their homes, and their communities. Why does our agency stop when we work?”

The Ecosystem Enabling Worker Cooperatives

The rise of worker cooperatives is not happening in a vacuum. It is fueled by a burgeoning ecosystem of mission-driven funders, development and technical assistance providers, and advocacy networks. This virtuous cycle has led to policy wins that further accelerate cooperative growth.

The Cooperative Fund of the Northeast is just one funder in a growing network of investors dedicated to cooperative development across the country. Massachusetts is also home to the nonprofit Community Development Financial Institution the Local Enterprise Assistance Fund, as well as community based financing initiatives like the Ujima Project, a capital fund in which members from Boston’s working-class BIPOC communities collectively control and make decisions around investment.

Organizations like the ICA Group and Ownership Associates provide training, mentorship, and consulting to help worker cooperatives succeed. Since 1977, the nonprofit ICA has launched dozens of worker-owned businesses, helped dozens of companies convert to worker ownership, and created and preserved over 10,000 jobs. Ownership Associates, a private consulting firm based in Harvard Square, provides governance, training and organizational development services for worker-owned businesses. Meanwhile, groups like the Greater Boston Chamber of Co-ops and the Coalition for Worker Ownership and Power (COWOP) build the cooperative economy through mutual support and advocacy for co-op friendly policies.

In 2022, multiple states passed laws promoting employee ownership, and Massachusetts established the Office of Employee Ownership (MassCEO) as a permanent state office to support worker-owned businesses. For the fiscal year 2025, COWOP won $500,000 in direct support to fund MassCEO and $7.65 million in a small-business technical assistance program that makes small grants to worker-owned cooperatives.

The Road Ahead

Despite their growing success, worker cooperatives remain a fraction of the U.S. economy. The U.S. lags behind countries like Spain and Italy in the scale and scope of our worker cooperative landscape. Here, cooperatives struggle with financing because traditional banks often do not understand or trust the cooperative model, making public funding, loan programs, and tax incentives critical to their expansion. Few American schools teach students about cooperatives as a viable business model; integrating cooperative education into our curricula would help broaden awareness. States and localities can also facilitate the success of worker cooperatives by expanding programs like the Community Development Block Grant to support co-ops, amending Workforce Innovation and Opportunity Act regulations to include worker cooperatives, and establishing right-of-first-refusal laws that give workers the chance to buy businesses before outside investors.

Beyond traditional industries, worker cooperatives offer new solutions to modern labor challenges. Platform cooperatives can bring together gig workers or contract workers to pool their risks and resources. Fairbnb—a cooperative alternative to Airbnb—reinvests 50% of its 15% commission into community projects rather than corporate shareholders’ pockets. Guilded, a cooperative for freelance artists, guarantees workers payment from a shared pool of funds within 14 days of project completion—providing economic stability in an industry where late payments are common. The fashion brand Tuniq engineered its own supply chain and ensures that its artisan workers own their means of production and set their own schedules.

Moreover, worker cooperatives and unions can work hand in hand to advance the goals of the labor movement. While unions organize workers to uproot unjust power structures, cooperatives plant the seeds of an economy that prioritizes people over profit. Recognizing this collaborative potential, the United Steelworkers and Mondragon Corporation in 2009 partnered to develop unionized worker cooperatives—known as union-coops—in the U.S. and Canada. In 2012, they introduced a union-coop model that highlighted how cooperatives benefit from unions’ strategic guidance, funding, and expertise, while unions gain new members and further their mission of worker empowerment. In 2013, CUNY Law’s Community & Economic Development Clinic (CEDC) joined the initiative to develop the model’s legal framework and launched Clean & Green Laundry, an eco-friendly commercial laundry, in Pittsburgh as a new union-coop.

Reviving the American Dream

Critics may dismiss worker cooperatives as socialism in hippie clothes, but in reality, they are deeply rooted in American ideals. By safeguarding democratic representation and economic self-determination for all, worker cooperatives revive the promise of the American Dream.

The most pernicious illusion of our era of authoritarian corporate capitalism is that we are powerless to create a more just and equitable world. Yet the growing worker cooperative movement reveals the truth: a fairer, more inclusive economy is not a distant fantasy—it’s already taking shape.