Cooperatives around the world: The United States

The United States is one of the countries with the largest number of cooperatives in the world. These cover many different sectors such as agriculture, finance, housing and public services, amongst others. However, carrying out a detailed analysis of the cooperative sector in the country could be complicated due to its constant evolution and the fact that legislation varies from one state to another.

According to data from the International Cooperative Alliance (ICA), in the U.S. there are 29,285 cooperatives with up to 350 million members.  

Healthcare cooperatives in the United States

Many North Americans find it difficult to pay their insurance premiums and medical bills. Healthcare cooperatives can be a solution, as they save patients money as they do not seek profits or have any external shareholders. 

Most healthcare cooperatives look after specific groups of people, such as United Ag for farmers in California or HealthPartners for small businesses in Minnesota. The more members the cooperative has, the more the costs are divided up, meaning greater savings for the patients. 

In 2012, the Affordable Care Act formed a framework for the creation of 23 healthcare insurance cooperatives. HealthPartners, with head offices in Minnesota, looks after 1.2 million members and employs 26,000 people all over the country. The United Ag network has over 1,000 partner organisations.  

The social impact of cooperatives in the United States

The United States shows a moderately high level of inequality, with a GINI index of 41.3, putting it amongst the five countries in the Organisation for Economic Cooperation and Development (OECD) with greatest inequality, alongside Colombia, Mexico and Chile.

The concentration of wealth in the country has been rising. In 2019, 1% of the families controlled 40% of the national wealth. On a federal level, the National Cooperative Business Association (NCBA) is the main organisation that represents cooperatives. The U.S. faces up to challenges such as the concentration of wealth, access to healthcare, equality in education and affordable housing, problems that have been worsened by a weak social security network.

Within this context, cooperatives play a crucial role in society. Their main aim is to serve the community in which they operate, as they are non-profit making organisations focused on meeting the social, economic and cultural needs of their members and of the local population.

Importance in the economy

The United States, the first world economy, generates a Gross Domestic Product (GDP) of approximately 25 billion dollars per year. Cooperatives contribute with around 700,000 million dollars, representing approximately 2.8% of the total U.S. economy, according to data from the U.S Bureau of Economic Analysis. Additionally, it is estimated that cooperatives generate employment for around two million people.

The agricultural sector has historically been the sector where cooperatives have had greatest impact. Currently, there are around 2,100 rural cooperatives with two million members, generating an annual income of approximately 6,500 million dollars.

Cooperative roots in the United States

Influenced by the development of the cooperative movement in the United Kingdom, cooperatives stated to appear in the U.S. in different ways, adapting to the different economic sectors. The first formal cooperative was established in 1752, when Benjamin Franklin founded the Philadelphia Contribution Fund to insure houses against fires, an organisation that continues working today.

Since then, the cooperative movement has expanded to different extents, in different sectors. To start with, many cooperatives were organised on a small scale to buy produce wholesale and sell it on at cost price.

The cooperative movement extended from the agricultural sector to other areas. In 1909, Massachusetts passed the first statute for credit unions. This type of cooperative experienced a significant growth thanks to the leadership of figures such as Edward Filene and Roy F. Bergengren, who promoted the passing of laws for credit unions, on both state and federal levels.

The crisis of the Great Depression strengthened support by the federal government for cooperatives, stimulating their development all over the country. Decades later, the civil rights movement also contributed to their expansion. Today, cooperatives are present in all the sectors of the U.S. economy.

Most of the healthcare cooperatives have their roots in the New Deal. During this period, money was lent to set up cooperatives and the most important ones, such as GroupHealth in Minnesota were founded at this time.