THE BLOG

A No-Brainer: Launching a Purchasing Co-op for Unions

02/22/2013 05:43 pm ET | Updated Apr 24, 2013

A no-brainer is an idea so simple, so easily understood, so quickly adopted that it requires no real thought. Everyone "gets" a no-brainer, except when they don't.
Over the course of the last year, I heard that phrase dozens of times. Each time I cringed. To me a no-brainer meant the exact opposite: an idea requiring more reflection, planning, effort and time to succeed.

The Cooperative for Union Services and Products (CUSP) is such an idea. It applies the American labor movement's core concept of Solidarity -- standing together in adversity -- to the commercial marketplace. Created solely by and for international unions and their allied entities, CUSP seeks to drive down their costs by aggregating their spending and achieving deeper volume discounts.

CUSP was a response to the financial pressures international unions face.
Last year, union membership fell to a 70-year low. Private sector unions, which once represented a third of the workforce, now represent only 6.6 percent. Public sector unions lost 250,000 members as governments at all levels slashed payrolls in the aftermath of the Great Recession.

For the last three years, sheer survival proved costly. Fending off legislation aimed at collective bargaining rights, fighting against right to work (for less) initiatives and battling for labor-friendly candidates absorbed tens of millions of dollars.

Organizing campaigns, sparked by a worker's complaints or a corporate merger, proved increasingly expensive as union avoidance lawyers and consultants fought to deny workers their right to have a voice at work. An employer's intimidation tactics may be pervasive but, by delaying elections and first contracts, their anti-union strategies absorb precious days and dollars.

Like the businesses they deal with on a daily basis, unions are paying higher prices for mundane items. Pens, paper, printer cartridges and computer costs continue to climb. The responsibility to their members to negotiate contracts, investigate grievances or prepare for arbitration hearings never diminishes. So doing more with less is standard operating procedure for unions.
Change comes slowly to institutions that have been around since the 1870's. Back then, the Knights of Labor supported "the establishment of co-operative institutions, productive and distributive." The Knights and its support for co-ops vanished as more conservative labor organizations sprang up after the Haymarket Riot in Chicago in 1886.

While cooperatives are not a new idea - 29,000 operate in the United States today - they're a long-forgotten concept for the American labor movement. In May 2012, the Steelworkers, working with the Spanish company Mondragón and the Ohio Employee Ownership Center, announced a detailed co-op model for worker owned and operated firms. But a press conference does not equal full acceptance of an idea, only the first step down a long road towards developing union co-ops.

So launching a purchasing co-op of unions was never a no-brainer. Having spent four decades working with unions, I knew that no new idea was self-executing or came without push back. No idea survived the test of time without confronting entrenched interests and the inherent inertia of institutions.

And yet, cooperating to cut costs, securing deeper discounts by aggregating spending, collecting data to compare pricing, relying on sourcing experts, renegotiating expiring contracts - all offered the American labor movement a way to do more with less.

Two international unions launched the Cooperative for Union Services and Products (CUSP) in December 2012. The International Union of Painters and Allied Trades (IUPAT) and the International Associations of Machinists and Aerospace Workers (IAM) concluded that a purchasing cooperative could save them money. Their due diligence included an independent feasibility study. Conducted by the MainStreet Cooperative Group, it found that a purchasing co-op could save unions at least $3.5 million across 16 categories of spending.

The Cooperative for Union Services and Products may prove those projections to be a tad too cautious. On office supplies, CUSP's apples-to-apples comparisons show 18 percent savings are possible. Personal computers purchases could see a 23 to 30 percent savings. A spending analysis on food service indicated a 23.8 percent savings might be possible. Cleaning supplies could be purchased with discounts as high as 45 percent. As more purchasing programs are rolled out each quarter and more unions join this nascent purchasing co-op, more savings will be identified.

CUSP now has over $5 million dollars in spending being analyzed. Not every one of those dollars will generate deep discounts. Some spending rewards corporations with a unionized workforce; some spending supports American and Canadian-made products; and some spending is tied to long-term relationships and contracts. Even so, there remains significant opportunities for savings.

A no-brainer? No way. No how.

A purchasing co-op of unions offers a complex solution to a perplexing problem -- how to strengthen unions financially in these perilous times. It is not a panacea. It simply must prove its value by saving significant sums for its member unions. And it is starting to do exactly that.