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Community Wealth Building:A New Paradigm of
Sustainable Economic Development
St. Louis Federal Reserve Bank – Exploring Innovation WeekMemphis, TN – May 13, 2013
Ted HowardThe Democracy Collaborative
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1.27 1.22
00.20.40.60.8
11.21.4
Top 400 individuals Bottom 185 million
U.S. Wealth (Net Worth in Trillions)
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,” http://www.politifact.com/wisconsin/statements/2011/mar/10/michael-moore/
michael-moore-says-400-americans-have-more-wealth-/
Wealth Inequality in the United States
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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
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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
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Women’s Action to Gain Economic Security (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
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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
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Washington Electric Coop (VT)
• Serves 10,000 customersin 41 towns in Vermont
• Community owns the shares• In 2002, 1/3rd of its
power came from nuclear• Today: 2/3rds of power
is generated from landfillmethane
• 100% from renewable energysources
The New Williamstown Solar Farm: A Sizable Presence on WEC’s Power Lines
Tom
Gar
den
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Market Creek Plaza (CA)
• Community-designed mixed-usedevelopment; $65 million commercialand cultural complex in low-incomeneighborhood
• Community ownership: 423 residentsown shares worth $500,000; 20% of equity; will increase to 50% equity
• Neighborhood foundation owns20%; will increase to 50%
• Former brownfield site; adjacent to trolley line; TOD
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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
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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
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• 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
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MONDRAGÓN100+ networked
cooperatives
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For more information:www.Community-Wealth.org