May 28, 2019; Washington Post
Could worker ownership of corporations hit mainstream US politics in 2020? Some Democratic presidential candidates are making that case, reports Jeff Stein in the Washington Post.
A brief digression: It’s worth noting these are very early days. We are so accustomed in the US to permanent campaigns that we fail to appreciate how absurdly long they are. (In 2015, for example, many Canadians were horrified at their so-called “long campaign”—which lasted 78 days.) Still, early days though they be, a growing number of policy proposals suggest that maybe something is shifting in US politics. Making workers into owners may be going mainstream.
Senator Bernie Sanders (I-VT) was an employee-ownership advocate long before that became popular, and he has proposed the most far-reaching measure. Stein reports the Sanders campaign’s plan would “require large businesses to regularly contribute a portion of their stocks to a fund controlled by employees, which would pay out a regular dividend to the workers.” Over time, employees’ ownership stake in their companies would rise, “making the workers a powerful voting shareholder.”
Sanders has also said he will introduce a plan to force corporations to give workers a share of the seats on their boards of directors. Senator Elizabeth Warren (D-MA) had already outlined a detailed proposal on the matter last year.
Stein adds that, “Warren, Sanders and Sen. Kirsten Gillibrand (D-NY)…have increasingly pitched ways to address soaring wealth inequality by giving workers a bigger ownership stake in their companies, pushing to give employees increased authority over the profits and decisions made by their employers.”
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“There seems to be a virtuous competition setting in between these candidates in reexamining the fundamental relationship between capital and labor,” observes Robert Hockett, who teaches law and finance at Cornell University. “The idea here is to make capitalists of the laborers, and I think it’s one that could catch on as we get closer and closer to the 2020 election.”
Sanders, notes Stein, has also reintroduced in the Senate two measures to make employee ownership more common. One bill would fund a $500 million bank to finance company transitions to worker cooperatives. The second bill would create $45 million in federal funding to support employee ownership centers in all 50 states that would encourage employee-owned businesses. Gillibrand is a cosponsor of both measures and Warren is a cosponsor of the employee ownership bank bill.
There is less support for these measures on the Republican side of the aisle. “Still, the idea to increase the number of worker cooperatives and employee-owned businesses has a degree of bipartisan support, at least for less radical measures,” Stein reports. He adds, “A number of GOP lawmakers, including Sens. Pat Roberts (R-KS) and Thom Tillis (R-NC), have pushed legislation to encourage technical assistance and other help to boost employee-ownership firms.”
Last year, too, Congress passed the Main Street Employee Ownership Act, which boosts federal Small Business Administration lending assistance to finance conversions of existing firms into worker cooperatives and ESOPs.
As Joseph Blasi and Douglas Kruse of Rutgers University’s Institute for the Study of Employee Ownership and Profit Sharing note, wealth inequality drives a lot of these new policies. According to Blasi and Kruse, the wealthiest 10 percent of Americans currently own 97 percent of all capital income, including capital gains, interest payments, and corporate dividends.
“With real wages being flat, looking at employee ownership and profit-sharing is a compelling way for the middle class to get a share of the benefits of ownership,” Blasi said.—Steve Dubb