Co-ops and Wisconsin Communities

I - Wisconsin Cooperatives in the National Context

II - Co-ops and Local EconomiesIII - Cooperative Culture: Perception of Co-

ops in WI Communities

I - Wisconsin Cooperatives in the National Context

National Impact Report

In 2009, the USDA launched a Congressionally funded study of cooperatives across the country

It identified more than 29,000 cooperative businesses in the United States

Member-owned businesses generate more than $654 billion in revenue annually

They also provide $75 billion in wages for more than 2 million workers

And In Wisconsin

The Midwest features the highest concentration of co-ops in the country

2.7 million cooperative memberships in WI

Statewide, cooperatives generate over $5.6 billion annually in gross sales, support 30,000 jobs and more than $200 million in state and local taxes

National Impact Report

The report suggests that cooperative business is not merely viable, but highly successful, even in the business climate of a national recession

While individual cooperatives may be small (or large), their cumulative economic impact on communities is considerable

II - Co-ops and Local Economies

The Multiplier Effect

Non-cooperative businesses may provide products and jobs that stay in the community, but revenue is more likely to be spent in other communities (think of executives, international investors, etc)

Co-ops contribute to what is called the local multiplier effect

The Multiplier Effect

Here’s an example: M. spends $1,000 at a cooperative grocery store in Antigo in a year. Rather than $500 going to salaries and supplies and $500 being sent to pay owners in New York, all $1,000 is disbursed to cooperative members (employees, patrons, suppliers, etc.)

These Wisconsinites all choose to buy products from stores in their town, many of them cooperatives

The Multiplier Effect

M’s $1,000 of goods produced $1,000 of revenue, which immediately was used to produce another $1,000 of goods and $1,000 of revenue. Through the local multiplier effect, the community of Antigo enjoys $2,000 of goods and $2,000 of revenue from an initial sum of $1,000. From the perspective of the community, money seems to multiply as it cycles through local businesses

Cooperative business enacts the multiplier effect by keeping money within a community

“Study Shows Cooperatives VitalTo Rural Economic Growth”

A government report released in 2004 says that cooperatives are more likely than corporations to have positive economic impact on their community The report, measuring the Economic Impact of

Cooperatives in Minnesota, is a public-private partnership between the Minnesota Association of Cooperatives (now known as Cooperative Network), the USDA/Rural Development, the Minnesota Secretary of State and Minnesota State Colleges and Universities (MnSCU)-Mankato

“Study Shows Cooperatives VitalTo Rural Economic Growth” Why? The report explains:

Cooperatives are member-owned, with benefits to local patrons more likely to stay within the community. Other businesses, such as corporations, are more likely to have any benefits in the form of dividends distributed mainly outside the community, and local ownership is often missing

It concludes, “The cooperative form of business is an excellent tool in promoting rural economic growth as well as local leadership development”

Discussion

How does the structure of cooperative business encourage the positive economic impact described in this report?

What role might co-ops play in our community?

III. Popular Perceptions

St Norbert’s Co-op Attitudes survey According to a 2007 telephone survey of 400 residents of

Minnesota and Wisconsin, the first words people think of when they hear the term cooperative or co-op is

(1) Owned by people for the common good/shareholders - 43% (2) Farming/foods - 18% (3) Lower prices/competitive/quality - 13% (4) Local/community based and owned - 9% (5) Business/dividends/profit sharing - 8% (6) Gas/electric/phone - 4% (7) Other - 3% (8) Credit unions/banks - 2%

Discussion

How are popular perceptions important to a business?

What sort of words or concepts do you associate with cooperatives?

For more information

To find out more about cooperatives in Wisconsin, particularly those located in your community, please visit the Cooperative Network

This material is made possible by the CHS Foundation.