Top Biden Economist: Encouraging Employee Ownership Could Improve Job Quality, Increase Workers’ Wealth & Productivity

Home Reports Top Biden Economist: Encouraging Employee Ownership Could Improve Job Quality, Increase Workers’ Wealth & Productivity

A study by Jared Bernstein – who was recently named to President Joe Biden’s White House Council of Economic Advisors – 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. The study, conducted with support from the Employee-Owned S Corporations of America (ESCA), uncovers obstacles to the creation of ESOPs and urges policy and private sector leaders to take steps and find new approaches to remove these barriers. Bernstein, who is currently Senior Fellow at the Center on Budget and Policy Priorities, finds that “education and awareness about private ESOP structures, both for owners and their professional advisors, are the most frequent hurdles to ESOP creation,” and that other hurdles include what he calls “opportunity costs of owners” who may not want to invest the time and resources needed to set up an ESOP as they plan their exit strategies.

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