Texas, the Racial Wealth Divide and What Co-ops Can Do

After reading the first chapter of The Color of Wealth and the "State of the Dream" report, I wanted to write about the racial wealth divide here in Texas and what cooperatives can do.  My research is by no means exhaustive, but I think it's a good starter snapshot.  Research is cited to places that did the data analysis, but it's virtually all based on data from the US Census Bureau or the US Bureau of Labor Statistics.


According to a Center for Public Policy Priorities analysis of US Census Bureau data:  9.4% of the white population lives in poverty, followed by 12.5% of the Asian population, 25.1% of the Black population (more than twice the amount of whites).  The number for Hispanics living in poverty in Texas is nearly three times that of white people, at 27.8%.

The state of Texas has touted some of the lowest unemployment rates in the country, but even there we see inequality.  According to the Bureau of Labor Statistics, the unemployment rate in Texas was about 8.1% in 2010, but in the white population it was much lower, actually 5.9%, whereas for non-whites, the unemployment rate was higher, 9.9%.

However, another important factor to consider is that of low-wage work, which can have people employed at full time, but unable to cover their own basic needs.  Texas is no. 5 in terms of low-wage workers, where 

"'low-wage' is defined as below the wage that a full-time, full-year worker would have to earn to live above the federally defined poverty threshold for a family of four. (In 2011, this was $23,005 per year, or $11.06 when adjusted to hourly wages.)"

As this infographic shows us, in the state of Texas, you'd have to work 88 hours a week at minimun wage to afford a two-bedroom apartment at fair market rent.  Texas has been a leading state in minimum-wage job creation, which does fairly little to help the economy in the long run.  Here are living wage calculations for Texas, which show that even for a single adult, $7.25 (Texas/national minimum wage) is below living wage.  Here are more indicators pertaining to low-income families, with Texas having a poor showing in most categories.

Many people argue that a low-wage job is better than no job at all, and that we should do what we can to help the growth of small businesses in these trying economic times, but the fact of the matter is that allowing minimum wages that leave people in poverty mostly helps large corporations.  In fact, 66% of low-wage workers are employed by large companies, companies with more than 100 employees. 

Cooperatives can change this picture.  Worker cooperatives are, by definition, businesses owned and democratically controlled by the people who work at them.  This means that worker-owners vote to make the decisions that will steer the business.  Worker-owners will of course, make business decisions that will keep the business afloat and also benefit them, instead of decisions being made by a third party owner whose primary interest is to make a profit, often by keeping worker wages low.

Worker cooperatives tend to pay closer to living wages.  They are also more stable workplaces committed to smart growth instead of quick profits.  There is also higher participation from worker-owners, and a higher level of community engagement.

Cooperatives emphasize the "triple bottom line", that is, making decisions that will benefit the planet, people, and profit.  Worker cooperatives bridge the gap created in recent years between our workplaces and, basically, everything else about us.  Businesses are reframed as places where we work, and thus, places that are a significant part of our lives and that should be held accountable to us and to our communities.  By building local, cooperative economies, by actually owning some of the places we spend our lives at, we can make sure that our voices will be heard.