Administration creates funding and technical assistance program to support worker ownership and cooperative business models across city
Mamdani Unveils Cooperative Economy Strategy Aimed at Building Wealth in Working-Class Communities
The Mamdani administration has launched a $50 million Worker Cooperative Development Initiative providing capital, technical assistance, and regulatory support for employees to purchase and operate businesses as worker-owned cooperatives rather than traditional corporate enterprises. The program represents an ideologically significant policy advancement reflecting the mayor’s democratic socialist governing philosophy while attempting practical economic transformation in neighborhoods with limited wealth-building opportunities. The initiative partners with existing cooperative networks including the Federation of Southern Cooperatives and NEW CO, a Brooklyn-based cooperative business incubator, to identify candidates for cooperative conversion and support ownership transitions.
Worker Ownership as Wealth and Power Building Strategy
Worker cooperatives operate according to democratic principles where employee-owners share decision-making authority and profit distribution proportional to work performed. A worker earning $40,000 annually in a cooperative would theoretically receive a percentage share of business profits in addition to wage compensation. Over time, cooperative membership builds household wealth through equity accumulation, profit-sharing, and business asset ownership. In contrast, traditional employment concentrates ownership and profits with distant shareholders while workers receive only wages. The average worker in a cooperative earns 23 percent more than workers in comparable traditional businesses, according to analysis by the Democracy Collaborative. Cooperatives also demonstrate superior stability, with 90 percent survival rates versus 50 percent for traditional small businesses within five years.
Converting Existing Businesses and Creating New Cooperatives
The administration’s strategy involves two pathways: converting existing businesses where employees purchase majority ownership from departing founders, and creating entirely new cooperative enterprises through the incubator network. The program prioritizes neighborhoods with lowest household wealth: East Flatbush, Sunset Park, Washington Heights, Corona, South Jamaica, and Hunts Point. Initial focus sectors include food service, taxi and delivery services, childcare, home health aides, and retail. A $50,000 low-interest loan would support a founding member of a cooperative to purchase initial assets or contribute capitalization to business formation.
Policy Changes Supporting Cooperative Development
Beyond direct investment, the administration has changed city procurement policies to prioritize cooperative vendors for city contracts. Municipal purchasing for school meals, healthcare services, and office supplies will reserve percentage allocations for cooperative suppliers, creating steady demand supporting cooperative viability. The mayor’s office instructed the city’s small business development agencies to train cooperative organizers and provide technical assistance free of charge. Regulatory changes streamlined business formation processes for cooperatives, eliminating redundant licensing requirements that create barriers to entry. For cooperative business information visit Coops for America. Economic democracy analysis from Democracy Collaborative. Worker ownership resources at National Cooperative Business. NYC small business support at NYC Small Business.
