Bernie Sanders Announces a Sweeping Plan to Promote Employee Ownership
This is a developing story, and the NCEO will continue to update this post.
Today, Sen. Bernie Sanders released a position paper, Corporate Accountability and Democracy, that begins with the words “We will give workers an ownership stake in the companies they work for.”
Sanders writes: “The time has come to substantially expand employee ownership in America. Study after study has shown that employee ownership increases employment, increases productivity, increases sales, and increases wages in the United States. This is in large part because employee-owned businesses boost employee morale, dedication, creativity and productivity, because workers share in profits and have more control over their own work lives.”
Some of the proposals apply only to large firms, defined as corporations with “at least $100 million in annual revenue, corporations with at least $100 million in balance sheet total, and all publicly traded companies.” Sen. Sanders estimates that this would cover 22,000 corporations employing a total of 56 million people. There are three proposals that would apply specifically to these large firms:
- Ownership funds: Large corporations would be “required to provide at least 2 percent of stock to their workers every year until the company is at least 20 percent owned by employees.” Those shares would be held by “Democratic Employee Ownership Funds,” which would be controlled by a board of trustees that would be elected by employees.
- Board seats: Boards of these large companies would reserve 45% of their seats for directors elected by the workforce.
- Charters: Large companies would be required to obtain a federal corporate charter that “will require corporate boards to consider the interests of all of the stakeholders in a company – including workers, customers, shareholders, and the communities in which the corporation operates.”
Some of the other proposals would be actions to be undertaken by the federal government, including some that Sanders has previously proposed.
- Employee ownership bank: Sanders would create a $500 million bank to provide below-market loans and technical assistance to facilitate employee ownership buyouts.
- Right of first refusal: When a company goes on the market, the Sanders proposal would give the employees the right to buy the company.
- Worker ownership centers: Sanders would create centers to educate business owners and workers in all 50 states.
In addition to the provisions related to employee ownership, the Sanders proposal would dramatically rework many aspects of the economy, including corporate ownership and governance, mergers and antitrust law, corporate charters, employment contracts, and corporate tax.
Although reaction has yet to come in to today’s announcement, the NCEO has reported on reactions to a story in the Washington Post this June in which Sen. Sanders previewed these proposals.