History of cooperatives in the United States facts for kids

A cooperative is a special kind of business or organization. It is owned and controlled by the people who use its services or work there. Instead of making money for a few owners, cooperatives work to benefit their members. For example, a food co-op is owned by the people who buy groceries there.

The history of cooperatives in the United States goes back a long time, even before the country became independent. While cooperatives are very common in places like Europe, they have played a smaller, but still important, role in the US economy.

Early Cooperatives (1700s)

Colonial Times

The very first group like a cooperative in the American colonies started in 1735 in Charleston, South Carolina. It was a mutual organization, meaning members helped each other. However, it closed down after a big fire in 1740 destroyed many buildings. The company could not pay for all the damage.

A more successful example is the Philadelphia Contributionship. This was a mutual insurance company started by Benjamin Franklin in 1752. It is the oldest mutual insurance company still running in the United States today.

Growing Together (1800s)

In 1845, the Boston Mechanics' and Laborers' Mutual Benefit Association was formed. This group was also a mutual organization. It was set up like the famous British Rochdale Pioneers, who are known for starting the modern cooperative movement.

Modern Cooperatives (1900s)

On May 20, 2019, two apartment buildings in Brooklyn, New York, were added to the National Register of Historic Places. These buildings, called Alku 1 and Alku Toinen (which means "Beginning 1 and 2" in Finnish), were built by Finnish immigrants. They are important because they were the first cooperative apartment buildings in the United States.

By 1920, there were about 2,600 consumer cooperatives across the US. Most of these were general stores, and 80% were in small towns. Together, these stores sold about $260 million worth of goods.

The Great Depression Era

The Great Depression was a very difficult time in the 1930s when many people lost their jobs and money. During this period, some people looked for new ways to help communities.

Upton Sinclair, a writer and politician, encouraged people to start "self-help cooperatives" in California. These were groups where people worked together to produce goods and services for themselves. Another person who supported cooperatives was Toyohiko Kagawa, a Japanese leader. He believed in "brotherhood economics" as a way for people to work together.

These ideas, along with President Franklin D. Roosevelt's "New Deal" programs, helped many cooperatives start. New cooperatives were created in places like Berkeley, California, and Greenbelt, Maryland. Some of these early cooperatives are still active today.

Credit unions are a great example of cooperatives that grew during the New Deal. A credit union is like a bank, but it's owned by its members. They offer financial services to their members, often with better rates than traditional banks. Credit unions became very popular and are still a strong part of the US economy.

Cooperatives Today (2000s)

In recent years, cooperatives have continued to be important. During debates about healthcare reform, some people suggested creating health insurance cooperatives. These would be insurance companies owned by their policyholders. Some states did set up these types of cooperatives when the Affordable Care Act (ACA) became law.

In 2009, the United Steelworkers union made an agreement with a large cooperative group from Spain called the Mondragon Corporation. Their goal was to help create and expand worker cooperatives in North America. In a worker cooperative, the employees own and manage the business.

Today, the National Cooperative Business Association reports that there are over 29,000 cooperative businesses in the United States. These cooperatives employ more than 2 million people and bring in over $650 billion in sales each year. This shows that cooperatives continue to be a significant part of the US economy.