1.7 The Resilience of Coöperation

Across these different sectors, coöperationist enterprises have proven resilient, especially during economic downturns and despite the favored treatment of capital.

In the financial sector, credit unions entered the financial crisis of 2007-2008 in stronger shape than their for-profit peers and came out of the recession stronger as well. Before 2007, coöperative financial institutions were reported to have “comparable or slightly higher earnings than investor-owned banks and achieved higher return on equity,” and in this sense, entered the crisis with a “stronger capital base than their competitors.”143 In Europe, coöperative banks only suffered 7% of all banking industry asset write-downs and losses throughout the financial crisis, despite having 20% of the market. In large part, this was due to their limited exposure to subprime mortgages and investment activity.144 In the United Kingdom, mutual building societies suffered minimal losses.145

In fact, in the face of financial crisis, financial coöperatives often see an increase in “almost every facet of their business.”146 They see an increase in assets and deposits: for instance, 516 credit unions in Canada saw a six-month increase in assets in the second quarter of 2008; the Credit Union National Association in the United States saw deposits in credit unions increase by 10% in 2009; Rabobank in the Netherlands saw its share of loans increase to 42% of the total market.147 They see an increase in the volume of lending: for instance, loans by credit unions in the United States increased from $539 billion in 2007 to $575 billion in 2008, while 8,300 U.S. for-profit banks saw loans outstanding decrease from $7.91 trillion to $7.88 trillion.148 They see an increase in membership levels: for instance, in the United States, membership in credit unions rose to 90 million in 2008 from 85 million in 2004; Raiffeisen Switzerland had record growth in 2008 with 7.3% new members.149 And they offer better interest rates: in the United States, savings and credit coöperatives have better rates compared to their peers; favorable lending rates were also a major impetus for Brazilian owners and low-income families to form a savings and credit coöperative.150

Worker coöperatives have a record of actually growing during recessions. According to Johnston Birchall, author of “The Performance of Member-Owned Businesses Since the Financial Crisis of 2008,” in The Oxford Handbook of Mutual, Co-Operative, and Co-Owned Business: “Since the late nineteenth century, in countries where there are strong worker co-operatives, these have tended to increase in number during recessions, both as new start-ups and takeovers of ailing businesses.”151 As evidence for this, Birchall notes that the worker coöperative sector in France grew by more than 263 coöperatives in 2013 (an increase of 17% since 2009) and had a survival rate of 77% versus 65% for conventional firms.152 In addition, the “level of indebtedness of worker co-ops was lower than that of comparable enterprises,” and the job losses were less significant (e.g. in Spain, 6.4% vs. 11.9% in other types of enterprises).153 In the United States, in the decade after the 2008 financial crisis, the sheer number of worker-owned coöperatives almost doubled.154

Overall, the CECOP-CICOPA Europe (International Organization of Industrial and Service Cooperatives, Europe) has conducted annual surveys that highlight the resilience of coöperatives by contrast to conventional enterprises. Coöperatives demonstrate lower job losses and failures: in Italy in 2011, for instance, 68% of coöperatives kept the same employment number, 18% grew, and only 13% contracted.155 In France, the number of coöperatives increased throughout the 2008 crisis: In 2005, there were 1,612 worker coöperatives and that number continued to rise through 2010, ending with 1,822 coöperatives.156 Bruno Roelants and his colleagues offer several compelling hypotheses to explain the resilience of coöperationist enterprises.157