New parents know the dilemma: Good child care is hard to find. But Janet Filante found it — and more — when she put her trust in her own neighborhood.
In the late-1980s, Filante was seeking a developmentally nurturing space for her young daughter. She heard from friends about Childspace, a new daycare center in Mount Airy near her home. After joining the inaugural “class” of parents, Filante liked it so much that she sent her second child there a few years later. Then, she began working at the center; and today, more than 30 years later, she holds another title: owner.
In fact, Filante has been a worker-owner at Childspace Daycare Centers for decades. And she’s not alone. Every staff member at its centers becomes eligible for worker-owner membership after one year of employment. A cooperative government, which is made up of those members and is non-hierarchical, has been running Childspace as a business since its founding in 1988. Other than members and nonmembers, Filante says, “there’s no difference between the owners and the workers, and that’s the nice thing about a worker co-op.”
Worker cooperatives are businesses that are democratically governed and owned by their employees — a model that’s been gaining popularity across the country in recent years. According to the Democracy at Work Institute, a think tank dedicated to advancing the model, there are at least 751 worker co-ops operating in the U.S. at last count — triple the number that existed a decade ago. That growth has been increasingly coming from conversions, in which owners of an existing business transition or sell it to the workers.
Childspace is a rare example of a co-op in the notoriously difficult childcare industry. It’s really just a rare example of a longtime center, full stop. (How many daycares are approaching a 40-year anniversary?) But Filante believes the business structure and the longevity of Childspace are intricately tied together.
“From the beginning, the mission was to provide both quality care and quality jobs — and they’re connected,” she says. “Worker ownership helps to retain the workers, because they have some say in their working conditions — even in a particularly challenging industry like childcare.”
“It is important for government to see that cooperatives are strong alternatives to traditional corporate structures, and ones that build a much more resilient city in the long term.” — Councilmember Nicolas O’Rourke
Between the end of 2019 and September 2024 in Pennsylvania, employment in the childcare industry dropped roughly 40 percent. There was a mass exodus of professionals from the field driven by a mix of Covid-19 and underlying issues in the workforce, like low pay and a lack of job security. Some early-childhood learning centers had to lay off or furlough staff at the start of the pandemic, only to find that those former employees had changed careers by the time they were ready to reopen.
That never happened at Childspace, which had a relatively swift return to normalcy after the pandemic. “When we went through the pandemic, we kept our workers employed, even while we had to close for a while,” says Filante. “There was a commitment to the workers, and it paid off. You know, we didn’t lose as many of our teachers as some other programs did.”
If a worker co-op business model can succeed amidst the broken economics of the U.S. childcare sector, then where can’t it work?
The year of the co-op?
That’s some of the thinking behind a recent City Council resolution declaring 2025 as the Year of Cooperatives in Philly. While praising the existing co-ops like Childspace, the resolution called on the City “to explore all options to support the development and resilience of local cooperative businesses.” Advocates say that worker cooperatives offer a path to inclusive wealth-building and lower the burden to entry of being a first-time business owner. They also point to statistics about worker cooperatives, compared to all businesses, which suggest that they tend to have more longevity, less turnover, and better rates of employee satisfaction.
Filante points out another selling point, one that stretches beyond the workplace. “You know, just like in a union, it’s a form of democracy,” she says. “Having a positive experience with participating in a democratic institution is really valuable for society at large, because people get to be an active participant in decision-making, which we all need to do as citizens. You know, to get off our phones and pay attention and get engaged.”
Prior to the City Council resolution, the United Nations had proclaimed 2025 as the Year of Cooperatives, recognizing them as drivers of social and economic development. While that decision was made with a global audience in mind, it came at a time of transition in the U.S.. During his first month-plus back in office, President Trump gutted the National Labor Relations Board, unilaterally fired thousands of employees, and is now openly calling himself a king. Prior to entering or reentering the White House, Trump established a long history of attacking and circumventing protections for workers.
Businesses that are run as cooperatives offer a form of resistance to those headwinds, strengthening the civic glue and resiliency in our backyard. “Right now, down in Washington, we are seeing what happens when we overemphasize a kind of entrepreneurship that treats a CEO as supreme dictator,” says City Councilmember Nicolas O’Rourke, who introduced the ceremonial co-op resolution. “We need to be mindful of where democracy shows up. Not just in the ballot box, but also in the places where we spend most of our time. A lot of people spend most of their time working. Why would democracy not be present in the workplace?”
The bones of a co-op
Cooperatively-run businesses have deep roots in Philly. In 1752, Benjamin Franklin’s Philadelphia Contributionship, which protected against fire loss, became the first mutual insurance company in the U.S., one of a long list of historical moments that took place here. Philly was home to the first cooperative store in the United States (established in 1829) and the first cooperative banking and credit union (1831), to name a few.
Today, the Philadelphia Area Cooperative Alliance (PACA) — a nonprofit that is a cooperative itself, run by members (other co-ops) from the region — is the torchbearer of that legacy, even if it’s not one that many people are familiar with yet.
“We need to do more education on what cooperatives are, because I think one of the biggest barriers is that people don’t really understand them,” says Corey Reidy, the development director of PACA. Or, Reidy says, people tend to think about co-ops narrowly. For example, they associate the term with food co-ops — such as Mariposa in West Philly or Weavers Way in the Northwest — which are consumer co-ops. (They are still democratically-run, but not operated and owned exclusively by the workers.)
“There is a whole world of cooperatives out there,” says Reidy. “I’m a fan of all of them. But my real love is worker cooperatives.”
Reidy is eager to debunk the idea that cooperatives are too idealistic or only workable under ideal conditions. For one thing, PACA’s membership includes businesses from a variety of fields, including restaurants (TacoTaco), data analysis for clean energy (Catalyst), and in-home care (Home Care Associates). The ownership of those businesses tends to be highly diverse as well, coming from communities with lower rates of business ownership. More than two-thirds of worker-owners are women and more than half are people of color.
“Worker ownership helps to retain the workers, because they have some say in their working conditions — even in a particularly challenging industry like childcare.” — Janet Filante, worker-owner
“We see it in the data: The majority of cooperatives are owned by communities which have historically been economically extracted from, and are currently economically extracted from,” says Reidy. “We’re always going to have to have an economy but it doesn’t have to look so extractive and competitive. It can be one of solidarity and care and mutualism.”
And, perhaps the most important rebuttal to doubters is the fact that studies, like this one from Rutgers, have suggested that cooperative models are on average more profitable than traditional businesses.
With that being said, unlike many businesses, co-ops are rarely focused on maximizing wealth. Instead, they’re focused on minimizing inequality. Co-ops often have higher compensation than industry averages, but also, a payscale that’s intentionally flatter. According to the Economic Policy Institute, the highest-paid employee at a co-op typically earns about $1.45 for every $1 earned by the lowest-paid employee. At traditional firms, that ratio is roughly 344-to-1 for the highest earners.
What can be life-changing about co-ops, proponents usually focus on, is how they build wealth, rather than how much wealth they build — which is done in a way that’s fair, equitable and transparent for workers.
However, worker co-ops do confront unique challenges, especially when it comes to funding. For example, the Small Business Administration has rules that strictly prevent the federal agency from helping out co-ops. Other forms of government support require a single signer on paperwork, especially for loans, which can exclude co-ops as well. “That’s really not great for a cooperative, because it creates a power imbalance when one person takes on the debt,” says Reidy.
It’s one reason why a large piece of PACA’s work is assisting members with capital. They partner with Seed Commons, a national financial organization that specifically supports co-ops. They also offer a range of technical assistance for entrepreneurs who want to either start a co-op or convert their existing business into one.
“There is so much opportunity for conversions, because the majority of businesses that people are trying to sell, they go unsold,” says Reidy. “I think it’s something like 70 percent go unsold, a huge percentage.”
More recently, PACA has also been pushing elected officials to consider increasing the City’s financial support for co-ops, like other cities have done.
Democracy beyond the ballot box
Fittingly, the City Council resolution on co-ops was presented on the same day that a Super Bowl pep rally filled up the chambers. Most of Council members and their staff were decked out in green — to celebrate a team which exemplified cooperation on the field — in the room when O’Rourke spoke into a microphone, praising co-ops as “anchor businesses in the community, allowing profits to be equitably re-circulated to local stakeholders, and provide a stable source of jobs and wealth across generations.”
Just a couple days prior to that, O’Rourke, in his City Hall office, talked — and how — he sees him and his colleagues doing that. Though he knew about co-ops before 2020, when his first term in City Council began, his interest in them accelerated while he was engaging with disaffected voters throughout last year.
“We are in a time where people are talking breathlessly about the fall or the decline of democracy in the Western world, certainly here in the U.S.,” says O’Rourke. “I think that we ought to be serious about fortifying it in all the ways that are not just about the ballot box.”
“We’re always going to have to have an economy but it doesn’t have to look so extractive and competitive. It can be one of solidarity and care and mutualism.” — Corey Reidy, Philadelphia Area Cooperative Alliance
Already, the Commerce Department makes a modest contribution to local cooperatives, to the tune of about $160,000 each year. But the majority of that money goes toward helping co-ops enroll and participate in broader Commerce initiatives, such as its tax preparation services and the Business Training and Assistance Program (BTAP). That money also supports co-op development at The Welcoming Center, which is dedicated to working with immigrant communities on these issues.
“What we wanted to do is continue to add to that,” says O’Rourke.
Over the past decade, prominent city halls around the country have stoked the rise of co-ops in a number of ways. In 2014, New York City allocated more than $1 million in its operating budget for the development of co-ops, a funding stream that has since more than doubled. Madison, Wisconsin has managed a public loan fund for co-ops for years. In 2023, the City of Denver passed a sizable tax credit for employee-owned businesses, which came on the heels of a $10 million funding pool established at the state level in Colorado. Within its first year, the fund supported more than 27 existing businesses in their conversion into co-ops.
“The different funding sources that cities like Madison, New York and Denver have done are absolutely incredible examples of what can happen when a city says we are going to put capital investment into our cooperative economy,” says O’Rourke. “Their cooperative economies have boomed, and so we are absolutely looking to them as models.”
Co-ops are never going to supplant the traditional American business model. It’s hard to imagine a world without middle-class jobs that promise a steady track of promotions and benefits. But they can certainly be a part of reducing the harms of wealth and income stratification, especially in a city like Philly.
Outside of O’Rourke’s window was a view of Market East, where Macy’s is now shuttered and the infamous “Disney hole” remains. In the wake of the Sixers nixing their City-approved plans for an arena nearby — O’Rourke was one of four members of Council to ultimately vote against those plans — the Councilman believes that cooperatives can be part of a prosperous economic future in the city, and one that’s more shared.
“Government officials should not chase after every corporate entity that comes in and sells us a wolf’s ticket about what they can do,” says O’Rourke. “It is important for government to see that cooperatives are strong alternatives to traditional corporate structures, and ones that build a much more resilient city in the long term.”
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