CENTRAL FALLS, R.I. (WPRI) — Rhode Island Gov. Gina Raimondo signed legislation Wednesday that creates a statutory vehicle for the creation and functioning of workers’ cooperatives.
According to a General Assembly spokesperson, the bill creates an incentive for workers to create enterprises that are democratically controlled and operated by their own employees.
The legislation was sponsored by Rep. Shelby Maldonado, D-Central Falls, and Sen. Donna Nesselbush, D-Pawtucket.
“Workers’ cooperatives increase productivity by empowering workers,” Maldonado said. “This is a good business model for the community because it provides a system more concerned with the welfare of its workers than in short-term profits. It’s also better economically for the state because we’ll have more people employed and making more money.”
The lawmakers said the new law also allows any corporation to elect to become a workers’ cooperative by stating in its certificate of incorporation, or in its amendments to its certificate of incorporation.
“This legislation is about empowering workers and lifting hard-working people toward the American Dream,” Nesselbush explained. “Worker cooperatives strengthen the community and provide workers with a direct means of bettering one’s life by having a true financial role and stake in their daily jobs. Our state could use more of these innovative corporations and I fully support any effort to establish more of these employee-owned corporations.”
The worker-owned cooperatives are business enterprises that are owned and governed by their employees, according to Maldonado and Nesselbush. All worker cooperatives have two common characteristics:
- Member-owners invest in and own the business together
- Member-owners share the enterprise’s profits and decision-making
Advocates for worker-owned cooperatives believe that if workers themselves control their own economic destiny through worker co-ops, the jobs created would provide living-wage, quality jobs to those who are most vulnerable to income inequality.