How Cleveland's Evergreen Cooperatives created jobs in some of the poorest neighbourhoods in the rust belt

Thirty times an hour a washing machine the size of a small flat spits out a fresh load of hospital sheets and blankets at Evergreen Cooperative Laundry in Cleveland, Ohio.

Each load travels overhead in an enormous blue sack, which opens like a giant pupae to dump the load on a conveyor belt. All around, workers in scrubs feed the robots: machines that fold, machines that sort, machines that press.

The air is hot and dry and you have to get close to hear people speak above the din. But everyone greets Tymika Thomas as she passes through and she greets them back, touching people gently on the arm, wishing them a good evening, or smiling over a private joke. Thomas is a supervisor at Evergreen, overseeing the work of 13 staff and managing a room that puts together surgical packs.

“This is my baby, guys,” she says proudly to a group of visitors who peer into the locked room where the blue packs are made. “If you go into surgery at Cleveland Clinic, everything that gets draped on your body has come out of this room.”

Thomas is so good with people, her managers are already thinking up ways to promote her. But she is just pleased to have worked her way up from the line, where one worker can feed a machine 5,000 blankets over a ten-hour shift, to become supervisor. “I’m in a good spot, I’m helping people every day,” she says with a big smile.

That wasn’t always the case. The Evergreen Cooperative Laundry employs 140 people, over half of whom might be considered hard to employ, because they have a criminal record or they have never worked in the US before. Thomas has a felony conviction and speaks openly about how the laundry gave her a second chance.

Not only has she held down a steady job, but like two-thirds of the laundry employees, she owns a share of the Evergreen Cooperative and receives dividends when the company makes a profit. Soon she will start on the road to home ownership, thanks to a scheme that helps cooperative members get five-year mortgages to take on distressed houses that were repossessed during the subprime mortgage crisis a decade ago, in which unsuspecting people were sold risky mortgages and tens of thousands of properties were left standing empty.

Over the other side of the city, past vacant lots and empty warehouses, 35-year-old Ernest Graham is showing another group of visitors the indoor greenhouse at Green City Growers, a second cooperative within the Evergreen Cooperative Corporation (the third is an energy retrofitter). Row upon row of perfect lettuce is growing on a board over the ponds, illuminated by pink lights. Everything is automatic, Graham explains, from the temperature to the amount of water, except harvesting the produce: “You can’t have full automation if you want to have jobs. So we use the automation to help us in our jobs.”

Graham applied for a job at Green City Growers after his grandmother, who lives in the neighbourhood, heard about the new facility that was being built to open in 2012. Employees are paid $10 an hour, compared to a national minimum wage of $7.25, and after a year they can sign up to become a part-owner of the cooperative for $3,000, paid in fortnightly instalments of 50 cents.

Once the businesses is profitable – and it is just now breaking even – worker-owners get a bonus dividend based on how much of their share they own.

“Not only are we trying to provide jobs for people who come out of incarceration or for new US citizens, but we try and be as clean as possible, using rainwater instead of city water in all but the hottest months of the year, and insects instead of pesticides to control pests,” Graham says.

The cooperative also works to build skills in the neighbourhood. If the roof needs fixing, supervisors seek out people to train worker-owners to do the work. Graham says: “Cooperatives like this one create wealth in the community by training people with new skills.”

The idea for the Evergreen cooperatives started in 2007. The Cleveland Foundation, a non-profit dedicated to improving lives in the area, commissioned a study to work out how to systemically tackle poverty in Cleveland. Like many of the northeastern cities in the so-called rust belt Cleveland has suffered from depopulation and widespread poverty since the decline of the steel manufacturing industry in the Eighties.

Ted Howard is the executive director of the Democracy Collaborative, the think tank commissioned to write the report. He says it quickly became clear that the future of the city was not downtown, but with the large health organisations like the Cleveland Clinic, which commissions $3 billion of services every year. The Democracy Collaborative set out to find out where that money was going: “How could there be $3 billion circulating and yet we are surrounded by six neighbourhoods where 40 per cent of people live below the poverty line?”

The Democracy Collaborative formed a strategy based on demand. It asked the big health providers what services they were buying from Chicago, or Mexico, and whether there was an opportunity to move the contracts back to the city. They coined the term “community wealth building” to describe the process of incubating and growing wealth using the city’s existing resources.

The Evergreen Cooperative Laundry now does all of the laundry for the Cleveland Clinic, which is one of the largest healthcare providers in the US. Meanwhile, Green City Growers has started to supply basil for a nearby Nestle plant that is making pesto.

Over 200 people are employed by the Evergreen Cooperative Corporation, while 137 are now worker-owners, with a stake in the future of the business. The Evergreen Cooperative Corporation is consulting with other cities in the US to replicate their success elsewhere. Howard, meanwhile, is a regular visitor to the UK where he has been sharing ideas with Preston in the north of England, and the the Centre for Local Economic Strategies, a Manchester-based think tank that is working with multiple local authorities on community wealth building strategies.

The biggest challenge for Evergreen is how to scale up its success at a time when cities urgently need solutions to stagnant wages and low employment. Evergreen itself is growing: the cooperative is planning a worker-owner internet service provider to address connection problems for the city’s poorest. But many agree that it hasn’t grown as quickly as investors had hoped. “We thought we’d have thousands of workers by now,” Howard says.

To speed things up, the corporation has started a fund for employee ownership that will acquire medium- and small-sized companies owned by baby-boomers approaching retirement, and turn them into cooperatives. “It’s slow, this anchor thing,” Brett Jones, vice president of business services at the Evergreen Cooperative Corporation, says. “Our approach is to build new cooperatives at the same time as connecting people to opportunities.”

The idea is to democratise companies by putting workers in charge, so they feel empowered to grow businesses and add jobs.

In the greenhouse, Graham says he hopes to move up from facilities manager in Green City Growers, to managing another Evergreen corporation somewhere else one day. “We go forth this way,” he says. “This is our company, this is our family.”