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:
Employee Stock Ownership Plans (ESOPs)
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.
Crossposted from Veris Wealth Partners
More than a decade ago, my colleagues and I at The Democracy Collaborative began using a term for a new kind of economic development – Community Wealth Building. For years, the term was so uncommon that it almost invariably appeared within quotation marks when used.
Today, a Google search identifies 124,000 entries and is growing daily.
The Market Basket situation is indeed, as many commentators have remarked, nearly unprecedented in the annals of American labor relations: When have we ever seen so many workers protest so vigorously for, rather than against, their boss! (For those new to the story, the New England supermarket chain has been wracked by massive employee protests, organized without any union involvement, after a faction of the family that owns the chain took control and ousted extremely popular CEO Arthur T. Demoulas. The mobilization in support of the former chief executive has resulted in nearly empty shelves and the mobilization of angry communities of formerly happy customers.)
But beneath the surface of the singular job action, in which workers and community have banded together to demand the reinstatement of the former CEO, the conflict in New England points toward something much more fundamental: the need to build institutions that can sustain the kind of community- and worker-friendly business leadership that earned "good brother" Arthur T. such incredible loyalty.
Happily, such institutions already exist, here in the United States. While undoubtedly not perfect as a form of workplace democracy, the Employee Stock Ownership Plan (ESOP) offers a proven template for making the interest workers have in a thriving business part of the discussions about a company's future.
Although the notion of building wealth through home ownership has taken a beating in recent years due to the Great Recession, ownership more broadly is still seen as a key factor in building wealth. So says the Greenlining Institute. So finds a recent study authored by Thomas Shapiro and colleagues at Brandeis University’s Institute on Assets and Social Policy. Even the Housing and Economic Development Commission of the National Baptist Convention agrees.
Crossposted from Policy Network, and later published on the London School of Economics website, this blog is part of a debate event hosted by Policy Network in London, UK, that was reviewed in OurKingdom by grassroots activist James Doran:
Five years after the financial crisis economic inequality in the United States is spiraling to levels not seen since the Gilded Age. While most Americans are experiencing a recovery-less recovery, the top one per cent of earners last year claimed 19.3 per cent of household income, their largest share since 1928. Moreover, income distribution looks positively egalitarian when compared to wealth ownership.
Last month, PBS NewsHour’s Business Desk featured an essay by Chris Mackin with the consulting group Ownership Associates entitled “The Alternative American Dream: Inclusive Capitalism.” Mackin uses the term “inclusive capitalism” as an ownership sharing proposition – one that is about creating a new relationship between employees and their workplace based not on a “sense” of ownership but on actual, tangible ownership.
Many of the benefits of employee ownership are quite apparent. Through owning a portion of stock in her or his company through an Employee Stock Ownership Plan, or ESOP, an employee is part owner and receives not just income, but has the opportunity to build wealth that would otherwise be unavailable in a traditional workplace. As a result, employee-owners have a greater financial stake in seeing the business succeed, which increases employee motivation and reduces the need for costly management oversight.