Applause accompanied the announcement that the Centene Corporation, a publicly-traded insurance company, would headquarter in Charlotte, hypothetically bringing thousands of jobs. Of course, they are not headquartering simply because they like the city or because St. Louis had too much crime, as was stated in a recent Charlotte Business Journal article. The Centene Corporation is only moving here only because our city and state officials have once again dangled millions of dollars in incentives in front of stockholder’s eyes — between $23-31.5 million from the city alone — which serves to remind us why member-owned companies should be the new priority for Charlotte’s leadership.
For a Charlotte native like myself, it feels like groundhog’s day. As we’ve learned, investors are loyal only to returns on their investment, not to cities. For example, Chiquita Brands International headquartered in Charlotte in 2011 after the city and county gave the corporation $20 million in incentives, but within three years, the company would be acquired by two other Brazilian companies and leave town as quickly as it came. Only $1 million came back to local government. The ensuing layoffs and financial strain on regional development is a common consequence of these policies.
Investors taking advantage of Charlotte is a theme that runs through our history. When Bruton Smith built the Charlotte Motor Speedway in Concord, he became the de-facto ruler of the town. When Bruton told Concord he wanted to build a loud dragstrip near the speedway, Concord officials voted against the dragstrip. In response, Smith threatened to move the speedway and the town of Concord caved. Not only is the dragstrip now in Concord, but Smith received an $80-million incentive package from the city. Concord also changed the name of the road leading from Highway 29 to Concord Mills to Bruton Smith Boulevard in his homage.
As most who live here are all too aware, Charlotte was named dead last in a recent study on social mobility of the 50 biggest cities in the U.S. All the “external investments” have done little to help the average person in Charlotte. We have bags of money here, but it’s not trickling down as policymakers once promised it would. The question then becomes, what is the alternative to external investors? How can we actually assist in local regional development? The alternative to investor-owned companies are member-owned companies.
Member-owned companies, like cooperatives, allow those who actually live and work here to have a stake in the companies they work in and use. In doing so, they promote a solidarity economy — an economy based from the bottom-up. Member-owned companies, like producer cooperatives, are already common in the U.S. For example, Land O’Lakes, Ocean Spray, and Sunkist Growers, Inc., are all farmer-owned cooperatives.
Policies focusing on promoting member-owned and locally owned businesses have become increasingly common in other cities. Organizations like the Democracy Collaborative and US Federation of Worker Cooperatives have been instrumental in getting policymakers to finally pay attention to the alternative. For example, in 2016, the city government in Madison, Wisconsin, invested $5 million in worker cooperatives. Several cities in the U.S. have also had success attracting networks that stretch between local governments and member-owned firms like the Evergreen model in Cleveland, Cooperation Jackson in Mississippi, and more recently, San Jose’s decision to transform the Pacific Gas and Electric Company into a consumer cooperative.
Member-owned companies such as worker co-ops have been found to be more sustainable in terms of growth and longevity. Further, they are guided by member satisfaction rather than returns on investments, focus more on long-term growth, and are less likely to fail in comparison to investor-owned firms. Research has also found that member-owned companies grow more sustainably, promote diversity, and actually grow larger in comparison to investor-owned firms.
There is also a wide range of industries that the city could assist in transforming into member-owned. For example, imagine if instead of a billionaire from California owning our beloved football team, the fans owned the team. As most football fans know, the Green Bay Packers are actually owned by their fans. In fact, the two most successful teams in soccer, Real Madrid and FC Barcelona, are both fan-owned. Nevertheless, our city government just gave $100 million in incentives to David Tepper so he could bring a new Major League Soccer team here. It’s a shame that the fan-owned alternative was never even discussed as a possibility. Apparently, our policymakers still firmly believe that financial investors are the key to growth.
Policymakers who actually care about Charlotte, and not just their personal careers, can help the city tremendously by encouraging local ownership of organizations instead of primarily aiding wealthy investors. History has proven time and time again that there is little to gain from financial investors coming together throughout the world to try to make money in any particular city. As soon as better returns on their investment enters into the picture, they inevitably will tear away from the investment they made.
It is time for us to actually take the time to figure out how to actually encourage local economic development that helps real Charlotteans instead of simply believing that attracting money, by itself, will benefit us. It is high time we abandon our hope that investors and our political parties are going to fix the problem and do it ourselves.
Cayce Jamil is a PhD candidate in Public Policy at UNC Charlotte. His current research utilizes unconscious indicators of status and solidarity in the human voice in order to overcome social inequality.
This work by Queen City Nerve is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.