Corey Rosen
A new bill introduced by Rep. Ocasio-Cortez and an amendment to the Defense Authoriziation Act would both encourage employee ownership. The two proposals come shortly after Sen. Ron Johnson (R-WI) advocated linking business support during the COVID crisis to employee ownership.
Nancy Wiefek
Our recent ESOP Topics Survey gathered data from 160 ESOP companies on how they’re handling the COVID-19 crisis and other issues, including questions about their turnover rates in 2019. The surveyed ESOP companies reported dramatically lower turnover than overall national averages. This difference persisted at the industry level in each of the industries with enough data to make comparisons: wholesale trade, manufacturing, and construction ESOP companies had turnover rates less than half of national averages for their industry. See tables below for details (national data is from the Bureau of Labor Statistics.)
Corey Rosen
Only a handful of people in Congress have actually worked for an ESOP company, but Sen. Ron Johnson (R-WI) is one of them. In an interview with Urban Milwaukee on July 3, Johnson suggested linking government assistance to employee ownership. “PPP on average probably provided a grant of around $11,000 per employee. So if we’re going to provide these grants, you know, restore capital, what I will say in exchange for the grant, a business that wants to reopen would then establish a new ownership structure, something like an employee stock ownership plan. I actually worked at one … and it’s a great form of ownership. Every employee participates. They participate in the earnings of the company, generally set up as a retirement type of plan. It’s a really good ownership structure for a capitalist society. I think it would also help alleviate the inequality gap as well.”
Loren Rodgers
On June 26, the United Kingdom observed Employee Ownership Day with celebrations in hundreds of companies across the country.
Nancy Wiefek, Corey Rosen
Timely research published by the American Economic Review conducted by Professor Robynn Cox at USC adds additional evidence of the potential for ESOPs to address income and wealth inequality. Her paper “The Role of Broad-Based Employee Ownership Opportunities in Prisoner Reentry” uses data from the National Longitudinal Survey that has followed a cohort of almost 9,000 individuals since 1997 through 17 waves of surveys. These data have previously been used by the NCEO to document the positive impact of ESOPs on lower wage workers and workers of color. (See our own research stemming from the same cohort at www.ownershipeconomy.org.)
Loren Rodgers
Two prominent writers, Timothy Wu and Robert Reich, have articles in the New York Times about COVID-19’s effect on ownership patterns among U.S. corporations.
Loren Rodgers
Here are three things I believe: ESOP companies are well-managed, they tend toward being open with information, and they are generous about sharing best practices with each other. If I’m right, then any group of ESOP companies is likely to have better-than-average risk profiles. And if that’s true, it should be possible to translate these characteristics into better insurance opportunities for ESOP companies.
Timothy Garbinsky
Vallejo, California-based Michael's Transportation Service, Inc., which has been employee-owned since 2009, announced that it will be adding all-electric Blue Bird school buses to its fleet, making it the first in the state to do so. Though the emissions-free buses won't hit the streets just yet due to the COVID-19 restrictions, the fact that Michael's has already received the delivery suggests that they are well ahead of the curve when it comes to environment-friendly transportation.
Corey Rosen
Update on July 16, 2020: Pursuant to a motion by the plaintiff-appellant, the Fourth Circuit has today dismissed the plaintiff's appeal of the district court's judgment.
