WASHINGTON – After lawmakers in both the U.S. House and U.S. Senate introduced bipartisan legislation to promote employee ownership of private businesses through employee stock ownership plans (ESOPs), Forbes reports that “[t]he tax and economic benefits aren’t the only appeal of ESOPs.” They write:
“Retention is top of mind for many employers, and few businesses have retained talent better through the pandemic than employee-owned companies. A poll released earlier this month from John Zogby Strategies found that just 4.5 percent of people working at S-corporation ESOPs lost their jobs or saw work hours reduced during the pandemic, as opposed to some 30 percent of the general population.”
In fact, the findings of Zogby’s survey tell “a tale of two economies” during the pandemic, during which workers at employee-owned S corporations (S ESOPs) report being on significantly more stable financial ground than other U.S. workers.
Zogby surveyed a sample of mid- and lower-level employees at employee-owned private companies and a sample of other non-ESOP employees and “found a world of difference between the two groups” in key measures, including:
- Non-ESOP employees reported experiencing job losses or downsizing at six times the rate of their peers at employee-owned companies.
- Non-ESOP workers have been adversely affected by the pandemic economy at more than three times the rate of employees at ESOP companies.
- Twice as many non-ESOP respondents as ESOP respondents are concerned about their ability to pay down debt.
- Three times as many ESOP employees say they are able to cover an emergency $500 expense, compared with their non-ESOP counterparts.
- Twice as many ESOP workers expect to retire by the age of 60 compared with workers at non-ESOP companies.
- No ESOP respondents reported being behind on their rent or mortgage, compared to more than 25 percent of their non-ESOP peers.
Zogby’s findings support decades of research showing that working for a private ESOP company helps American workers be better equipped to weather financial challenges or economic downturns, and that ESOP companies tend to weather economic storms better than other businesses.
“Policy-makers would be wise to incentivize the ESOP structure for as many working Americans as possible so that financial strength and independence may be fostered and achieved,” Zogby writes in his report.
To read the full survey findings by John Zogby Strategies, CLICK HERE.