New Report on Employee Ownership from the Center for American Progress

Last week, the Center for American Progress released a second policy-oriented report on employee ownership, this time focusing on understanding the scope and policy implications of risks associated with retirement-based employee ownership. In Mitigating Risks to Maximize the Benefits of Employee Ownership, Karla Walter and Danielle Corley argue that employee ownership "could promote broad-based wealth creation, thereby fostering sustainable economic growth and reducing inequality."

They note that one of the major impediments to stronger support from policy makers is a concern about risks associated with employee ownership, and their report is intended to both investigate the extent to which this concern is legitimate and to propose three policy solutions: limiting company stock in 401(k) plans, allowing early diversification when an ESOP involved wage or benefit conditions or when a company's only retirement plan is an ESOP, and better-targeted regulatory oversight of ESOPs. Walter and Corley note that their recommendations are "targeted to address the minority of companies with employee ownership where workers face undue risk. In sum, this report aims to start a dialogue about how to better protect workers while still offering the benefits of inclusive capitalism."