The National Center for Employee Ownership has just released results from the first phase of an ongoing research project that compares the economic well-being of employee-owners early in their careers with that of other young workers. The findings, based on data collected by the Bureau of Labor Statistics, are remarkable.
The dataset’s powerful sampling design allowed us to explore the impact of employee ownership on diverse groups of young workers ages 28 to 34.
Employee-owners have better outcomes across a wide variety of measures of economic well-being, and those differences apply to the respondents as a whole and to specific demographic groups.
Employee ownership—employees owning stock in the companies where they work—is a common but relatively unfamiliar aspect of the U.S. economy. The primary form of employee ownership in the United States is the employee stock ownership plan, or ESOP.
ESOPs allow workers to accrue stock in their company over the course of their employment and receive payment for their stock as a retirement benefit. Congress designed ESOPs in the 1970s to encourage owners of private companies to transfer ownership to employees in a non-discriminatory way and at no cost to the employees themselves; instead, the owners are paid the full value of their shares by the ESOP itself, which borrows the money if necessary and repays the loan from company earnings.
Today, 6,500 American companies have ESOPs. Many of these businesses use innovative management tools to closely engage their employee-owners in driving the company’s success.
In addition to the more detailed overview on this site, you can also learn more about ESOPs through articles and publications on the NCEO website. Infographics, interactive maps, videos, and more are at at www.esopinfo.org.
“When S&C Electric sold to us employees through an ESOP in 2007, I didn’t know what an ESOP was. Thanks to the ESOP I will be able to retire this year, a full two years ahead of schedule. More than just a financial benefit, S&C has really and truly treated me like a member of the family.”
“Recology has given me a great opportunity in life. I am a single mother of two beautiful girls, and being an owner at Recology has given me the tools I need to make them successful in life. People know that this is just not a company they work at, it’s a company they have ownership in.”