The Employee Ownership Update
June 17, 2019
Bernie Sanders to Promote New Employee Ownership PoliciesThe Washington Post reported on May 28 that Sen. Bernie Sanders would announce support for two new measures to promote employee ownership. Although he has not released details, Sen. Sanders said that he believes "we can move to an economy where workers feel that they're not just a cog in the machine — one where they have power over their jobs and can make decisions."
Sen. Sanders is working on a new proposal under which large businesses would make mandatory contributions of stock to worker-controlled funds, which would pay annual dividends to workers. The mandatory ownership fund echoes a similar proposal by the UK Labour Party. Sanders is also planning to propose that some corporations be required to provide board seats to workers, and on June 5 he attended the Walmart shareholder meeting to argue that the company should provide board seats to hourly workers.
Sen. Sanders has been a long-time advocate of employee ownership, and in addition to his new proposals, he is again a cosponsor in the current Congress of legislation that would create an employee ownership bank and employee ownership centers in all states.
Reactions to the Sanders ProposalIn its initial reporting on Sen. Sanders' new proposals, Washington Post reporter Jeff Stein noted that the new proposals are "expected to face significant opposition from the business community."
In a June 6 column (subscription required), the Economist argues that "employee ownership has a lot going for it. But not if it becomes over-politicised." The article notes that "America leads the way in the number of blue-collar capitalists. But even it still has a long way to go," and it cites the NCEO's research (Employee Ownership and Economic Well-Being) as reason to believe that widespread employee ownership would reducing the "gaping" wealth gap in the United States. The Economist concludes, however, that Sen. Sanders' new proposals use a mandate when an incentive is a better tool: "compelling rather than coaxing firms to give away shares to workers jeopardises a delicate compromise between progressives and conservatives that has historically helped advance the cause of employee ownership in the West."
Reporting in the New Yorker on June 7, Osita Nwanevu describes the delicate politics of support for employee ownership, citing cautionary reactions from Loren Rodgers of the NCEO and Joseph Blasi of Rutgers. On the other hand, he also notes a poll by the Democracy Collaborative that found 55% of respondents support mandatory stock contributions to employees by large company.
Mark Cuban: Entrepreneurs Should Give Stock to All EmployeesMark Cuban, the billionaire entrepreneur who founded two companies and is a regular on the television show Shark Tank, said, "We as entrepreneurs have got to make a point to give stock to everybody that works for us. Period. End of story. No exceptions, because that's the only way people are going to get any type of equity appreciation." Speaking during the Skybridge Alternative conference on May 9, Cuban addressed the issue of increasing inequality of wealth and income, noting that "if someone is only going to be paid by the hour...they're always going to fall behind."
The story ran in the CNBC program Make It, Cuban said that both companies he founded offered stock to all employees, and noted that when one of them, Broadcast.com, was sold to Yahoo in 1999, 300 of its 330 employees became millionaires.