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ASBC Applauds Congressional Legislation to Spur Worker Ownership of Businesses

ASBC applauds Senator Bernie Sanders (I-VT) for his introduction of two bills that place worker ownership of businesses front and center in the rebuilding of America’s economy from the bottom-up. ASBC calls on Congress to promote worker-ownership businesses with greater funding and smarter federal support.

ASBC supports the two Sanders bills, which are:

  • the WORK Act, S. 1081, which creates a Labor Department initiative to promote worker-ownership through grants to new and existing state programs, and
  • the U.S. Employee Ownership Bank Act, S. 1082, which creates a new bank to help traditional companies finance their transition to worker-ownership.

ASBC has been working with Sen. Kirsten Gillibrand (D-NY)—who cosponsored Sanders’s bills—as she crafts her own legislation to advance worker-ownership, and has been joined in this effort by 1worker1vote, the Rocky Mountain Employee Ownership Center, and the U.S. Federation of Worker Cooperatives among other groups.

Support for worker ownership is important to the economy, since worker-owned businesses pay higher incomes and provide better retirement plans. This enables them to support working-class communities hurt by market downturns and contract workers who live paycheck to paycheck without benefits. Moreover, they create a workforce committed to making their company competitive and profitable, helping them be more resilient during market downturns and more likely to survive as start-ups.

These strengths enable them to address two of our economy’s biggest crises:

  • The retirement-savings crisis: Median retirement savings are less than $3,000 for working-age households and just $12,000 for households near retirement.
  • The transition or succession crisis: Up to 20,000 businesses a year must be sold over the next decade as their Baby Boomer owners retire.

ASBC advocates for equal federal support on behalf of all worker and employee-owned companies whether ESOPs, worker cooperatives, or union cooperatives starting with tax policy parity regardless of structure.

In addition to Sanders’s bills, ASBC supports the Promotion and Expansion of Private Employee Ownership Act (H.R. 2096, S. 1212) currently before Congress. It would give S Corp ESOP owners the same capital gains tax deferral that C Corp ESOP owners already enjoy. ASBC believes that a similar benefit should be available to firms that become cooperatives, worker cooperatives and union cooperatives.

For more than a century, cooperatives have been an essential part of the success of U.S. agriculture. Today, they number more than 3,000, have a combined membership of 2.8 million, a net income of nearly $1.2 billion, and net business volume of more than $96 billion.

By 2013, there were an estimated 10,300 corporations with ESOPs and similar plans—mostly small- and medium-size businesses, with just over 10 million workers and almost one trillion dollars in total value, according to The Citizen’s Share: Reducing Inequality in the 21st Century.

The 2016 Republican Platform endorsed the creation of ESOPs, saying the future of work will be built on “employee empowerment and workplace flexibility,” and that stock ownership plans will enable workers to become capitalists, expand private property and energize the economy.

Source Author: 
Bob Keener