History Bites · 7 min read

The U.S. Federation of Worker Cooperatives didn’t appear overnight. It was built by workers, organizers, and cooperative developers who believed that worker ownership needed a national voice — and decided to build one themselves. This is the story of how that happened, why it matters, and what it means for the movement today.

450+ business & organizational members · ~1,300 worker co-ops estimated nationwide · 20+ years of building the movement



What Is the USFWC?



The U.S. Federation of Worker Cooperatives (USFWC) is the national grassroots membership organization for worker-owned cooperative businesses in the United States. Its mission is simple and radical at the same time: build a thriving cooperative movement by supporting worker-owned businesses and advocating for policies that make worker ownership more possible.

It is the connective tissue of the American worker cooperative movement — providing education, technical assistance, peer networks, and a collective political voice to worker-owners from every industry and every corner of the country.

Illustration of hands from different backgrounds reaching over a U.S. map, holding a pen, whisk, stethoscope, gear, and hammer, connected by a network of lines.



The Roots: A Movement Without a Center



For most of the 20th century, worker cooperatives in the United States existed in isolation. There were pockets of activity — the Mondragon-inspired cooperative developers of the 1970s and 80s, like the ICA Group, founded in 1977 specifically to bring the Mondragon model to American industrial worker buyouts. There were the worker-owned businesses that emerged from union struggles, like the Rath Packing Company in Waterloo, Iowa, where in 1980 the United Food and Commercial Workers local negotiated an employee buyout to save the plant rather than let it close. But there was no national organization connecting them.

Each cooperative was an island. When one failed, the lessons died with it. When one succeeded, the model rarely spread. The movement had energy but no infrastructure.

That began to change in the late 1990s, when a loose network of cooperative developers, academics, and worker-owners started asking a question: what would it look like if we organized?



The Founding: 2004



The USFWC was formally founded in 2004 at a gathering of worker cooperative developers and advocates in San Francisco. It wasn’t a top-down creation — no government program, no foundation grant drove it into existence. It was built from the bottom up by people who were already doing the work and needed each other.

The founding brought together cooperatives from wildly different sectors:

  • Tech and creative cooperatives from the coasts
  • Food and agriculture cooperatives from the Midwest and South
  • Home care and healthcare cooperatives serving immigrant and low-income communities
  • Construction and skilled trades cooperatives from across the country

    What united them wasn’t industry — it was ownership structure and values.



What the USFWC Built



In the two decades since its founding, the USFWC has built the infrastructure the movement had always been missing:

Education and Training. The USFWC runs training programs, workshops, and the Worker Cooperative Academy — giving worker-owners the skills to govern their businesses democratically and sustainably.

Policy Advocacy. The federation has become a credible policy voice in Washington, pushing for real, on-the-ground wins:

  • Inclusion of worker cooperatives in Small Business Administration lending — the Main Street Employee Ownership Act (2018) requires the SBA to guarantee loans specifically to worker cooperatives, not just ESOPs, and directs the agency to build outreach and technical assistance through its Small Business Development Center network.
  • Federal and state tax policy reform — Colorado’s HB25-1021 (2025) lets worker cooperatives subtract up to $1 million of federal taxable income from their state income taxes each year, described as a first-of-its-kind measure designed to bring co-op tax treatment closer to parity with how S-Corp ESOPs are already taxed.
  • Support for cooperative conversions — Colorado’s Employee Ownership Tax Credit covers up to 75% of the professional, legal, and consulting costs of converting a business to worker ownership. The state’s Employee Ownership Office has already supported 57 business conversions, including 27 worker cooperatives, marketed directly to business owners as a succession-planning alternative to selling to private equity.

    The Main Street Employee Ownership Act. One of the USFWC’s most significant recent wins was advocacy around this act, signed into law in 2018, which for the first time directed the SBA to support worker cooperative development. It was the first federal legislation in U.S. history to explicitly recognize worker cooperatives as a legitimate business model.

    Network and Community. The USFWC hosts a national Worker Cooperative Conference — one of the largest gatherings of worker-owners in the United States — and maintains peer networks that let cooperatives share resources, knowledge, and solidarity across sectors and regions.



Want stories like this delivered to your inbox?



New posts every week on cooperative history, worker ownership, and the solidarity economy. No spam — ever.

Subscribe at solidarityecono.my →



Who It Serves



The USFWC represents worker cooperatives across virtually every sector of the economy:

  • Home care and healthcare — including Cooperative Home Care Associates (CHCA), the largest worker-owned cooperative in the United States, employing over 2,000 caregivers in the Bronx
  • Food and grocery — from small urban food co-ops to large regional distributors like Equal Exchange, the country’s largest worker-owned fair trade food company
  • Tech and design — coordinated in part through USFWC’s own Tech Worker Co-op Peer Network, a group of technology-focused worker cooperatives that collaborate on projects and share expertise across the co-op ecosystem
  • Construction and skilled trades — worker-owned contractors and builders like South Mountain Company on Martha’s Vineyard, an integrated architecture, engineering, and building firm that converted to worker ownership in 1986 and now holds one of the highest B Corp scores ever recorded
  • Professional services — law firms, accounting firms, and consulting cooperatives, connected through USFWC’s own Service Provider Directory of cooperative-friendly lawyers, accountants, and consultants who are themselves USFWC members

    The common thread is worker ownership — the legal and governance structure that gives workers democratic control over their workplace and a share of the surplus they create.



The USFWC and the Broader Movement



The USFWC doesn’t operate in isolation. It’s part of a growing ecosystem of organizations building the solidarity economy from the ground up, including Cooperation New Orleans.

Its members range from small, single-location businesses people encounter directly in daily life to larger regional players. Rainbow Grocery Cooperative has run as a fully worker-owned grocery store in San Francisco’s Mission District since 1975, with about 170 worker-owners today. Arizmendi Bakery — a small chain of worker-owned bakeries across the Bay Area — grew out of the original Cheese Board Collective and is named after the same Basque priest who inspired Mondragon.

The USFWC is also connected internationally — to Mondragon, to the International Co-operative Alliance, and to worker cooperative federations in Canada, Europe, and Latin America.



“Worker cooperatives are not a niche experiment. They are a proven, scalable model for building wealth and power in working-class communities. The USFWC exists to make sure that model spreads.”



Why It Matters Now



We are living through a crisis of worker power. Union density is near historic lows. Wage growth has lagged productivity for decades. Wealth inequality is at levels not seen since the Gilded Age.

Worker cooperatives are not a complete solution to that crisis. But they are a proven, scalable part of one. Every time a business converts to worker ownership, every time a new cooperative is formed, every time a worker-owner votes in a general assembly — the balance of economic power shifts, even if only slightly, toward the people doing the work.

The USFWC exists to make those shifts happen more often, more successfully, and in more places. That is not a small thing. That is the work.



Keep Going





This is part of our History Bites series — bite-sized stories from the history of cooperative and solidarity economics. Want more? Join the Solidarity Economy platform and be part of building it.



Written by the Cooperative Codebase team — Aaron, Israel, and Jamie. Part of the Solidarity Economy Marketplace. Last updated: July 2026.