By 2027 half of the workforce will not have an employer. You read right, half of the workforce would be part of the "gig" economy.
Imagine what this does to our social fabric and the giant shift this places on our expectation of employers. From health care to retirement funds. Not to mention worker protections. When you add this to the growing wealth gap and increased accumulation of wealth to the top 1%, it does not bode well for our communities and the demand this will place on our safety net programs.
I heard this statistic at the 2018 Worker Cooperative National Conference in Los Angeles, CA. And yet, just as daunting as that was it was followed up with a conversation about the possibility of what this could mean - a radical shift that places democratic business ownership as the force to stabilize work and organize labor.
The idea is that we can explore and scale different ownership models that share business profits across workers to address accelerating wage gaps and provide a greater distribution of wealth. This more equitable distribution of wealth will then help support stronger communities by such things as expanding the tax base and minimizing the need for safety need programs such as rental and food assistance.
The challenge then is how can this model get to scale? Consider the number of small to medium size businesses and the fact that many are owned by baby boomers. Baby boomers who will be retiring in the next 10 to 15 years. We can capitalize on the exit of single proprietorship and enable those businesses to be sold to their current employees. Thereby keeping local successful businesses and jobs while moving employees to greater wealth by becoming owners. This might not be for everyone, but considering the volume of businesses and jobs that will be at the table, it may just be enough to create a shift needed.
It is the vision of the possible that made many technology platforms a force in creating a gig economy, and it may just take that same energy and imagination to structure new business models that make the future of work one that contributes to our communities well-being instead of creating more problems.
As Community Ventures embarks on a journey to help build a community investment fund, one that supports our locally owned and democratically run businesses, I was inspired by others who share those same goals and offered their help to make this happen in Santa Cruz - a community filled with hope, love, and the daring vision of a much better world. I invite you join me and others who are making a $10, $25, $50, or even $100 monthly donation to support our work in making this vision of our future a reality.
Maria T. Cadenas
Happy Mother’s Day from the Community Ventures team! We want to take a moment and recognize the hard-working mothers in the community. You are an inspiration to us all and we admire your strength and devotion.
We are inviting you to join Community Ventures and UC Santa Cruz’s Blum Center on Wednesday, May 30th at UCSC! The team will discuss Mamás con Más, local Latina moms’ experiences with financial services, including traditional and alternative lenders.
Let May 30th be an additional day of appreciation for mothers and learn how you can support and give back to the women that matter most.
Save the date! More information to come.
By Brando Sencion, Program Coordinator of Community Ventures
For many entrepreneurs trying to start their own business credit is essential. Lacking credit can be a major setback for entrepreneurs willing to start businesses. The lack of credit means no access to loans, business wholesale accounts, leasing equipment or space, and more. So where should you start? Here are 3 ways to establish and improve credit.
OBTAIN CREDIT REPORT
Before you start to build your credit, it is important to obtain a copy of your credit report. Your credit report has information on where you live, how you pay your bills, and more. The report helps creditors, employers, and other businesses evaluate if you are a good candidate. Make sure the information is accurate, complete, and up-to-date. If you find any inaccuracy or incomplete information, be sure to correct it. Corrections of errors can help improve your credit history.
APPLY FOR A SECURE CREDIT CARD
We all have to start somewhere, and a secured credit card is a great option. A secured card is backed by a cash deposit you make when opening the account. The deposit will determine the credit limit on the card. You’ll use the card as any credit card. There will be interest and payment dates. However, the only difference is you opened it with a deposit to secure the account. After a few months, the financial institution will remove the safety net and offer you a credit card with no deposit required. Now that you have learned to use a credit card and have built history with a financial institution, you can continue to build your credit with other lenders.
PAY AT LEAST THE MINIMUM, PAY ON TIME
If you already have credit history, but it is not enough to qualify you for the lines of credit you need. Focus on building your credit with good habits. Building credit is a slow process and can take up to 6 months or a year to get within a desirable credit range. A good habit is to pay at least the minimum due on your bills and paying them on time. Payments make 35% of your credit score and heavily weigh on your credit history. Furthermore, keep credit utilization low, the balance and your credit limit should be at a healthy ratio. If existing debt is a problem, work to pay down the debts of credit accounts with the highest interest or lowest balance. Additionally, always pay more than the minimum amount, this will pay debts down faster and reduce interest build up over longer periods.
By Brando Sencion, Program Coordinator of Santa Cruz Community Ventures
Beer is more than malt, water, hops, and yeast. Craft breweries provide us with economic models’ other businesses can use to their advantage to create strong local economies.
According to the California Craft Beer Association, in 2016, craft breweries contributed $7.3 billion to California’s economy and the industry supports 49,308 jobs across the state. More than 900 breweries are operating across the state of California, more than any other state in the country. I use this statistic to demonstrate breweries are able to flourish in numbers, even though there are many like them.
A key to their success are collaborations between breweries. This is a great example of businesses working together to support their local craft beer economy. Economic Networks, are a way to promote groups and businesses to interact with each other to benefit the whole community. Thus collaborations, allow breweries to exchange best practices, consumers, and strengthen their economic ties to each participating community. In my opinion this is key and diverts from conventional practices of competing businesses.
Small businesses can analyze these practices and think of innovative ways to help their own business and other potential partners. If businesses are able to create a collaborative culture the possibilities to help each other are endless.
2017 marked the end of a 27 year affiliation between Community Ventures and Santa Cruz Community Credit Union (SCCCU).
By Brando Sencion, Program Coordinator of Santa Cruz Community Ventures
“This land is your land, this land is my land.” I sing these words in my head as I think about employee owned business models. Employee ownership is a model which workers own a majority of their company’s stock and are able to say, “I am an owner of this company.” Benefits of this business model include improved company performance and employee wellbeing. Furthermore, a culture of democracy is created among employees to participate in company decisions.
Employee-owned companies help keep businesses locally owned and build community wealth. The economic impact for families participating in one of these companies is higher wages, asset building, and job security. Employee ownership is beneficial to all, but can particularly have positive effect on women financially. The Los Angeles Times reported, Latina women make 43 cents to the dollar compared to white men. Their ability to earn higher living wages as employee owners is higher due to increased company performance and fair distribution of wages. Higher pay means families have the ability to save, invest, and obtain financial security.
Apart from individual benefits, employee owned businesses are beneficial because they allow communities to build their own local economies within larger economies. According to Project Equity, small businesses provide 48% of jobs nationally and locally circulate three times more money back into the local economy compared to large firms and chain businesses. Keeping money locally is needed in communities because it allows small businesses to flourish, which in return creates jobs and personalized services.
As an employee this is the coolest idea you’ve heard in a long time. However, as an owner it may be difficult to like this business model. In my opinion, running an employee-owned company as an owner is difficult because you must give up a portion of your profits to share the wealth with employees. Maybe it is not the right route for you now, but for small business owners ready to retire, this may be a solution. Due to large amounts of baby boomer business owners ready to retire within the next few years, many local businesses can potentially close. This is because over 85% of business owners do not have a succession plan in place for their business. The reason may vary on why they do not have a succession plan but, converting towards employee-ownership can be the solution. This would allow the employees to become owners of the business and continue to serve the community, while at the same time keep their jobs and become owners.
By: Maria Cadenas, Executive Director of Santa Cruz Community Ventures
It’s about people. At Santa Cruz Community Ventures (SCCV) we want more local businesses, families able to afford to live here, and an equitable financial system. We want all of these because they are signs of a thriving community – where all people can live.
But we don’t have that quite yet. The wealth gaps are daunting and making it unaffordable for most families to live here. Parts of our county are facing up to 50% of households not using banking services. And the fast pace of change due to regional pressures like water and Silicon Valley are shocking. Not to mention the displacement and gentrification of our low-income communities.
Which is why our work, our willingness to innovate and try, is so critical. We know that as a world we don’t yet have the answers. But we have the urgency, the imagination, and the courage to try. We are unwilling to sit by the sidelines.
Over the past two years SCCV has reinvented itself to focus on building an inclusive economy. Our work has taken a thoughtful approach to innovation, community organizing, and economic development. From developing a toolkit to help immigrant families in danger of deportation protect their wealth to Youth Financial Capability models targeting middles school girls and youth entering the workforce.
We are doing this because our dreams of a thriving local inclusive economy are worth it. We are doing it because each one of us is worth it. And yes, it may seem a bit unorthodox to work with health providers to get them to use financial coaching as a health treatment or to view college saving accounts at time of birth as an economic strategy or to offer our fiscal sponsorship for a rapid response to facilitate supporting DACA recipients. But we are in an unorthodox time when eight men have as much wealth as 50% of the world’s population.
We may be dreamers, but we are also thoughtful and intentional doers. I hope you will join us in building the Santa Cruz County of tomorrow. Dare to dream with us and help bring our vision of sustainable and inclusive economy for all to life.
By: Brando Sencion, Program Coordinator of Santa Cruz Community Ventures
For years consumers have been “set up to fail” by short term lenders with services such as payday loans. Consumer Financial Protection Bureau (CFPB) has been calling for payday lenders to ensure that the borrowers have the ability to repay their loans, according to its terms and limit how much, customers can borrow.
Until today, payday lending was regulated by individual states policies. Some states had strict policy and others had no policies at all to protect families from these services. Thousands of store front payday loan services across the country, lend millions of dollars each year to families attempting to make ends meet. The inability of these families to repay the loans, more than often place them in a cycle of debt.
Under the new rules issued by the CFPB, payday loans will have to follow a complex set of guidelines to ensure the customer have the ability to repay what they borrowed. The lender is required to verify the borrower’s income and check other financial obligations such as rent, child support, student loans, etc. The short-term loans must be structured to allow the customer to gradually get out of debt. However, a short-term loan under $500, is not required to meet the affordability test. Additionally, the payday loan affordability test does not apply to lenders issuing less than 2,500 loans a year.
The newly issued policy is a great leap in the right direction, but there is more to be done. Other recommended policies for payday loans that need to be addressed are placing interest rate caps, limiting loan fees, limiting balloon payments and interest payments schedules.
By Maria Cadenas, Executive Director of Santa Cruz Community Ventures
Last week I had the privilege of being in our nation's capitol as part of the HOPE Leadership Institute (HLI). It was our last session as a fellowship cohort of 30 Latina Leaders from across California. To say that I am humbled by them is not giving them justice.
When I signed up for HLI, I was seeking a way to do more. And yet, as the days went by I realized that what I was actually getting was the words and tools to share my story and listen to stories of the women around me. It was in this finding and telling that I was given the strength to better partner with the communities I care so much about.
I was reminded of the power of stories. How its through our stories that we get to know each other as neighbors, coworkers, and friends. I was reminded that it is in this weaving of stories that we connect. How we forge relationships and dialogue. Where we find space for new ways and innovation.
Sometimes, in the day to day efforts to create policy and processes, we forget the very human journey and reason we do what we do. We persist on affordable healthcare because it is about keeping people living and thriving. We persist on fair immigration policies because it is about families being together and the communities we live next door to. We persist because not doing so dishonors the very shoulders we stand on.
Persistence means continued effort. A commitment to keep on keeping on. And today that means continuing to tell our stories on the value of the ACA and how it changed our lives and communities for the better - making us a #HealthierUS.
Today persistence means continuing to share the stories and value of our #DREAMers and immigrant families and neighbors.
Today is about taking the time to know each other's story, finding our care and love for each other as people, and remembering that the world we want can only happen if we work towards it.