Employee Stock Ownership Plans (ESOPs)

A discussion on ideas for bringing democracy to the workplace commends the Democracy Collaborative's work in promoting comprehensive economic change. 

As small-business owners retire, their employees may lose their jobs. New legislation, though, encourages that retiring small-business owners sell to their employees in the form of ESOPs or cooperatives. As Marjorie Kelly, Executive Vice-President and Senior Fellow at the Democracy Collaborative points out, many business owners would prefer to ensure that their employees remain secure. 

Marjorie Kelly is interviewed about the Fifty by Fifty Network, with the goal of reaching 50 million employee-owners by 2050. The aim of this Network is to expand democracy into the workplace in a way that will transform the economy. 

In this article for The Hill, Democracy Collaborative Executive Vice President and Senior Fellow Marjorie Kelly describes the growing movement toward broad-based ownership and how communities are coming together to take control of their local economies. Kelly highlights some of the innovative strategies used by communities on the ground, such as the cooperative ownership business conversion, which is poised to achieve expanded scale in the near future:

This report from the National Center for Employee Ownership synthesizes research on the impact of employee ownership on economic outcomes for young workers, ages 28-34. The authors find that compared to non-employee owners, these workers have higher household net wealth, higher median incomes, increased job stability, and greater access to benefits such as childcare, retirement plans, and tuition reimbursement.

As cities wrestle with the growing challenge of wealth inequality, more and more leaders are looking to broad-based ownership models as tools to create jobs and build community wealth. These models are highly effective, with a positive impact for low- and moderate-income individuals and communities. This report looks at six such models—ESOPs, Worker Cooperatives, CDFIs, Social Enterprises, Municipal Ownership, and Emerging Hybrids—with examples of best practices, and explores how these models can be used in community economic development.