ESCA member companies are off to a busy start this month, hosting Members of Congress at their employee-owned businesses around the country, showcasing the positive results yielded from employee ownership.
This past Tuesday, Senator Chuck Grassley (R-IA), a senior member of the Senate Finance Committee, paid a visit to Griffin Pipe, a subsidiary of Amsted Industries, at their Council Bluffs, IA manufacturing facility for a meeting and tour. Senator Grassley spoke with Griffin Pipe’s employee-owners as he toured the facility, allowing them a chance to explain how their ESOPs (Employee Stock Ownership Plans) have affected them both personally and financially.
When asked about the policy issues surrounding S corporation ESOPS, Senator Grassley not only expressed his personal support, but spoke about the broad support ESOPs have in Congress.
Senator Grassley’s visit was well-timed, as Senate Finance Committee leaders Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) have recently released a tax-reform proposal that would start with a “clean slate,” and then provisions would be added back in.
Additionally, fellow ESCA member companies Inland Truck Parts and Jasper Engines and Transmissions hosted Members of Congress. Rep Lynn Jenkins (R-KS-02), of the House Ways and Means Committee, paid a visit to the Inland Truck Parts Overland Park, KS headquarters affirming her support for S ESOPS. She met with ESCA Board Chairman and CFO Greg Klein and Inland CEO Dave Scheer. Rep. Jason Smith (R-MO-08) visited the Jasper Engines and Transmissions’ plant in Willow Springs, MO. Smith, who is the newest Member of Congress, took a tour of the facility and met with employee-owners.
The S ESOP model has bipartisan support in Congress because it truly provides economic value from employee-owners saving for retirement to the broader economy as a whole. Economist Alex Brill, former advisor to the Simpson-Bowles bipartisan deficit reduction commission and a fellow with the American Enterprise Institute, released a study showing that private employee stock ownership plans (ESOPs) organized as S corporations increased employment over the last decade more quickly than the overall private sector.
Brill’s study also found that jobs within surveyed S ESOPs grew by 60 percent over the past decade, while jobs in the private economy remained relatively flat. According to the study, the unique strengths of employee ownership drove company gains and jobs in the past decade, while helping insulate S ESOP businesses from the adverse effects of the recent recession.