ICYMI: ‘Employee-owned businesses foster loyalty, pride’

Home ICYMI: ‘Employee-owned businesses foster loyalty, pride’

WASHINGTON – In case you missed it, The Bulletin (Bend, Ore.) reports that the opening of a new store by ESCA member WinCo “has offered more than just a new option for grocery shopping, for the 140 people working there, it’s a chance to own a slice of the company,” and “the arrival of WinCo in Central Oregon puts a spotlight on a little-known business model.”

When it comes to employee stock ownership plans (ESOPs), the paper reports, “[t]he benefits are pretty simple, really. It offers financial security for employees who stick with the company for the long haul. The potential is there for six-figure payouts and even a comfortable retirement.”

The report continues: “In addition to company shares that can be cashed out, WinCo and most other employee-owned companies also offer a 401k plan. For those edging toward retirement, the combination of the 401k plus the ESOP account creates a nice nest egg. ‘So many people I know struggle to save for retirement,’ said [WinCo manager Steve] Corbin ‘There was a time I was the same. At WinCo, the worry is removed, and it’s as easy as punching in and doing your job.’”

recent study by economist Jared Bernstein, now a member of the White House Council of Economic Advisers, examines the benefits of employee stock ownership plans (ESOPs) and, given that there are still relatively few U.S. ESOPs, proposes ways to encourage the formation of more employee-owned businesses.

In a previous study, Bernstein demonstrated that employee ownership helps to close the wage and wealth gap between managers and workers in ESOP-owned companies. “Employee ownership — and ESOPs in particular — should be part of our national discussion on ways to reduce inequality,” Bernstein said in releasing the 2016 analysis.

Since Congress created the S corporation ESOP structure through bipartisan legislation over 20 years ago, more than 3,000 private U.S. companies have become S corporation ESOPs, enabling one million workers to have an ownership stake in the businesses where they work.

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