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The Employee Ownership Update

Loren Rodgers

June 1, 2017

(Loren Rodgers)

NCEO Research Links ESOPs with Better Economic Prospects

On May 22, the NCEO issued a special bulletin announcing new research. In Employee Ownership and Economic Well-Being (see www.ownershipeconomy.org or download the full report as a PDF), NCEO research director Nancy Wiefek, PhD, examines data on workers aged 28 to 34 and finds that the employee-owners simply are economically better off than their non-employee-owner peers. What's new in these findings is the connection between employee ownership and the fortunes of individual workers: for example, the employee-owners in the study have 92% greater median household net wealth than the non-employee-owners.

Another groundbreaking aspect of this paper is that the dataset is powerful enough to allow analysis of demographic groups no one has been able to study before with regard to employee ownership. The strongly positive patterns of economic benefit extend to groups such as those without college educations, parents of young children, people of color, and single mothers.

You are welcome to share this research with others at your company, with journalists, with policy-makers, and anyone else who should know! The NCEO has a press kit and other resources to make it easy, and more will be following soon.

This project was funded by the W.K. Kellogg Foundation as part of a $200,000 grant covering the period from May 1, 2015, to March 31, 2017.

Colorado Governor Signs Pro-Employee Ownership Legislation

On May 18, Colorado Gov. John Hickenlooper signed into law H.B. 1214. The bill, passed by the state legislature on April 25, creates a revolving-loan program to be operated by the Colorado Office of Economic Development and International Trade (OEDIT), to be funded by gifts and donations. The bill also requires that the OEDIT train its employees to be sufficiently knowledgeable about employee ownership to be able to recommend it when appropriate and to promote it in their materials.

The bill was sponsored by state Rep. James Coleman (D-Aurora) and Rep. Jack Tate (R-Centennial), who stated, "Anything we can do to encourage ownership helping facilitate getting folks on the path of wealth creation, I think it's a good thing." The Rocky Mountain Center for Employee Ownership helped promote the bill.

New York City Considers Support for Employee Ownership

Letitia James, the public advocate for New York City, has proposed that the city both provide education for business owners about employee ownership and facilitate financing for employee ownership transactions. In a policy brief, she writes:
New York State loses approximately 60,500 jobs a year when small businesses with fewer than 100 employees close their doors for good. While many businesses close because of rising rents or failed business plans, in New York State we estimate that 3,700 businesses close each year simply because of the owner's retirement. As a result 13,260 New Yorkers lose their jobs annually. New York City could avoid some of these job losses through a little-known but proven strategy to retain jobs and build assets for workers: transitioning to employee ownership.

Minneapolis Star-Tribune Columnist on Employee Ownership

Columnist Lee Schafer wrote on May 24 about employee ownership as a possible answer for baby boomers selling their businesses, noting that "this big generational shift in business ownership could provide an opportunity for even low-wage workers to get ahead."

Rutgers and CEPI Host Employee Ownership Meetings

The Rutgers School of Management and Labor Relations' New Jersey/New York Center for Employee Ownership is hosting an employee ownership event on July 31 designed to introduce business owners to ESOPs, equity compensation, and the new state center being hosted at Rutgers.

At the same venue the following day, the Certified Equity Professional Institute (CEPI) at Santa Clara University will host its second annual East Coast Equity Compensation Symposium on August 1.

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