What Happens When Workers Own the Company?
Ensuring that workers fully share in the benefits of economic growth has been a major priority for policymakers and others concerned with economic opportunity and the fates of low- and middle-income workers. On Thursday, speakers at “Having a Stake: The Potential of Employee Share Ownership for Workers and Business,” an event hosted by the Aspen Institute, explored one possible solution: transferring ownership of companies to employees themselves.
The event came on the heels of recent congressional action on this issue and offered insight into both how these programs work in practice and how they could be implemented more widely. Employee ownership comes in a variety of models including granting employees a majority share of the company through stock options or allowing for ownership through other means such as worker cooperatives,
Congressman Erik Paulsen (R-MN) provided opening remarks, followed by conversations with business leaders from companies including EILEEN FISHER, AMSTED Industries, and King Arthur Flour, all of which have adopted some form of employee ownership.
“Employee ownership is about opportunity,” Paulsen explained, highlighting the strategy as a chance to help increase economic security and retirement savings for Americans.
Earlier this month, the House passed the Main Street Employee Ownership Act of 2018, which would provide financing to help facilitate stock ownership plans for workers and help the Small Business Administration better assist in their creation. Senator Kirsten Gillibrand (D-NY) has also introduced a version of the bill in the Senate.
Employee stock ownership plans (ESOPs), which provide free retirement savings through stock options, have garnered praise in recent years from conservative economists such as Alex Brill and liberals like Jared Bernstein. Debates remain about how best to implement these policies.
Panelists lauded the results of ESOPs in their own businesses and cited a range of benefits, including: improving worker performance, encouraging better management decisions, maintaining businesses’ connections to the local community, and providing for the long-term financial security of workers.
Amy Hall, vice president for social consciousness at EILEEN FISHER, argued that ESOPs have bipartisan support for good reason: they could be a powerful tool to reduce inequality.
“If more companies went this route, not only would we be supporting more people post-retirement in a way we can’t right now, but there would a closing of the wealth gap and it would help in supporting the democratic principles of this country,” said Hall.