RMEOC is a member of American Sustainable Business Council, and as we prepare to discuss employee ownership with Colorado legislators, we wanted to share ASBC’s recent white paper on worker ownership. Learn the facts.
Reduce Economic Inequality with Worker Ownership
Ever-increasing economic inequality has convinced millions of Americans the U.S. economy is failing them. Congress can reverse this decline and rebuild the middle class by supporting worker ownership of companies. It’s a proven way to increase wages, build wealth, strengthen companies and save communities.
Ownership is key: Exponential wealth increases for the top percentage of Americans are due to their ownership of capital and capital income. Bill Gates, Warren Buffett, and the Koch brothers alone have as much wealth as the 128 million people in the bottom 40 percent, according to Having a Stake, a new report from centrist think tank The Third Way.
Acting now is vital, as income inequality will only worsen the longer we don’t address two large crises:
- The business-transition crisis: Up to 20,000 businesses a year over the next decade will be sold or shut down as millions of their baby-boomer owners retire. Without buyers, these viable businesses will be forced to move, shrink, or close.
- The retirement-savings crisis: Nine out of 10 American households save too little to finance retirement, and millions have no savings at all. According to the General Accounting Office, among households age 55 and up, about 29 percent have neither retirement savings nor defined benefit plans.
Worker ownership can help. When employees buy a healthy business, they keep a viable company in the community and on the tax rolls – and earn higher wages and equity that boost household savings.
The American Sustainable Business Council (ASBC) is actively encouraging Congress to expand worker ownership. Through tax reform, Congress can create legal parity for worker-owned companies—starting with existing tax benefits and access to federal programs. Tax reform could:
- Make coops, worker coops, and union coops eligible for ESOPs’ tax benefits;
- Make worker-owned companies eligible for economic-development tax incentives;
- Create an incentive for owners who sell their companies to their employees.
Congress needs to know that worker-owned firms are strong and stable. During the Great Recession, worker-owned firms typically had fewer layoffs and higher survival rates than similar firms. And, as Having a Stake reports, they grew faster at Recession’s end.