New Study Measures Employee Ownership's Potential

Research Associate Matt Mazewski from the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers has completed an analysis of US Census data on how many privately held firms in the US are “good candidates” for conversion to employee ownership through an ESOP or worker cooperative. He draws upon the US Census Bureau’s Annual Business Survey, County Business Patterns, and Economic Census.

Specifically, he defines candidates for ESOP employee buyouts to be privately held firms with (a) 50 or more employees and (b) an owner aged 55 or older who is not likely to pass on the business to a relative (assuming that 10% of retiring owners will ultimately have a family member take over for them).

He defines candidates for coop employee buyouts to be those privately held firms with (a) at least five but fewer than 50 employees and (b) an owner who meets the same criteria as above.

The calculations show that, as of 2022, about 140,000 firms employing around 33 million workers would have been suitable candidates for ESOP employee buyouts, and nearly 1.1 million firms employing over 25 million workers would have been suitable candidates for cooperative employee buyouts. Collectively, these firms accounted for roughly $25 trillion in total revenue (in 2024 dollars).

You can read the full report here.