Wednesday, May 24, 2017

Worker owned business is bipartisan approach to building wealth

Most are aware that there is a huge gap between the highest and lowest incomes. This is largely a consequence of traditional capitalism where "capitalists" with the money own the company and workers are viewed as an expense to be minimized.

But change one element in that equation and suddenly things become more equitable. Make employees owners. Then the employees can grow wealth. The Mondragon Cooperatives in Spain are the most famous example. But Cleveland has been turning around their blighted inner city with the Evergreen Coops. Those employees, some of whom used to be in trouble with the cops, are putting away tens of thousands of dollars, a nest egg that could make a big difference. And the pride that comes with this is priceless.

One caution. Government tax incentives have driven some companies to rush into ESOPs (employee stock ownership plans) but they kept their top down, paternalistic management style. Years ago I was consulting with United Airlines and I told them their effort would fail unless they shared real power, real decision authority with employees. They didn't and it did fail. Ownership won't make much of a difference if employees have no control over their workplace.

Anyway, there's a push in Congress to reenergize worker owned business. Check this out: Bernie Sanders and Ronald Reagan on the same side of on issue?

"There are more than 10 million employee-owners in the United States today who work and own a stake in companies like Publix Supermarkets, Wawa Convenience Stores, or New Belgium Brewing. And while there are a wide range of social enterprise approaches being piloted in communities across the United States, none can match employee ownership for proven, scalable impact, with models that are nationally vetted and that have been successfully deployed for decades."

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