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

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

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

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

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

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

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

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

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

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

• 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

MONDRAGÓN100+ networked

cooperatives

For more information:www.Community-Wealth.org

thoward1@umd.edu