In today’s House Ways and Means hearing, Reaching America’s Potential: Delivering Growth and Opportunity for All Americans, Rep. Dave Reichert (R-Wash.), Rep. Mike Thompson (D-Calif.), Rep. Earl Blumenauer (D-Oreg.) and Rep. Ron Kind (D-Wis.) each commended employee stock ownership plans (ESOPs) for their ability to reduce income inequality and improve economic growth. The four Representatives, have also sponsored the Promotion and Expansion of Private Employee Ownership Act, which currently sits before the Committee. Additionally, Rep. Thompson cited Recology, a California-based ESOP, as an example of employee ownership improving the U.S. economy.
Rep. Mike Thompson: “The last point I want to make is on the issue of employee stock ownership plans. I’ve got a number of those in my district and I have another number of people who would like to get those going. I am particularly interested in the idea that it would reduce wealth inequality, as was referenced in your article Mr. Bernstein. I think it’s a great way to move forward something positive – doesn’t cost us any money, doesn’t add to the debt, puts more people to work. And talk about looking into the eyes of your workers, the company Recology in my district, it’s a municipal waste and recycling company, and when I go in to meet with them, they sit around that conference table and you’ve got mechanics, you’ve got truck drivers, you’ve got recycle gatherers or picker-uppers, and they are just very, very proud of the fact that they own part of this company, and I think we could do a lot more to improve our economy.”
In response to the hearing, ESCA Executive Director Stephanie Silverman said, “This morning’s House Committee on Ways and Means hearing reminds us that economic opportunity remains out of reach for many Americans. Fortunately, Congress has a number of options before them, including the promotion of S Corporation Employee Stock Ownership Plans – or S ESOPs.”
While workers across the country face stagnant wages and retirement insecurity, S ESOP employees enjoy qualified shareholding plans that provide ownership stake in their companies, improving their financial future and retirement outcomes,” she added.
Below are other mentions of ESOPs from the hearing:
Rep. Dave Reichert: “Finally, our committee considers policy ideas that will deliver growth and opportunity for all Americans. We focus on individual policies that are working such as employee ownership.”
Rep. Ron Kind: “I want to commend you for the recent article that you wrote on ESOPs entitled ‘Employee Ownership, ESOPs, Wealth, And Wages.’ I’ve believed for a long time they can be a tool when it comes to addressing income inequality – Representative Reichert and I have had this ESOP modernization bill pending before this committee, and Mr. Chairman I think that would be a very nice vehicle for us, as a committee, to move forward on. It doesn’t cost anything, it makes it easier to convert to the ESOP model. I visit a lot of the ESOP shops in my congressional district and throughout the state, and the pride of ownership, the productivity, the loyalty, all of these factors come into play so I commend you for the article.”
Rep. Earl Blumenauer: “I appreciate Mr. Bernstein’s work on ESOPs, I’m going to defer, I think, to my friend Mr. Kind who might want to talk about it, but I think those are such a powerful tool to stimulate economic growth and align the interests of workers in a corporation in very powerful way.”