would Expand Employee Ownership
June 30, 2010
During the consideration of the Small Business Lending Act (H.R. 5297), Senators Sanders, Sherrod Brown, and Leahy will file two amendments aimed at increasing jobs through an expansion in employee ownership. H.R. 5297 will be considered by the full Senate sometime after July 13th.
The first amendment (S.AMDT 4439), the Worker Ownership, Readiness and Knowledge (WORK) Act, would create an Employee Ownership and Participation Initiative within the Department of Labor. This initiative would promote employee ownership and employee participation in company decision making by providing education and outreach, training, grants, and technical support for local programs dedicated to the promotion of employee ownership and participation.
The second amendment (S.AMDT 4440) would create the U.S. Employee Ownership Bank to provide loans and loan guarantees to employees to purchase a business through an ESOP or a worker-owned cooperative. The federal government currently provides a wide variety of federal loans, loan guarantees and other technical assistance to American companies as a way to increase U.S. jobs through exports. Providing federal loans and loan guarantees for the expansion of employee ownership would increase and retain jobs in the U.S. and strengthen the U.S. economy.
The first amendment is a slight variation on S.2909, which was introduced by Senator Sanders in December 2009. The second amendment is identical to S.2914, also introduced in December 2009. Click here to read more about those two bills.
Since December 2007, employment has fallen by over 7 million, and the unemployment rate has nearly doubled to 9.7%. Although many jobs have been lost to deteriorating domestic economic conditions, many others have been shipped offshore. One way to reverse these economic trends is to provide employees with the tools they need to own their own businesses through employee stock ownership plans (ESOPs) or eligible worker owned cooperatives. Employee ownership is often the necessary component that will keep a hard-pressed business from either shutting down, or shipping its jobs overseas.
Who benefits from these employee ownership amendments?
- The Economy, in which many businesses which otherwise would close down or ship jobs overseas stay open and keep their American employees
- Retiring Small Business Owners, who find buyers for their business and compensation for their years of hard work;
- Employees, who retain their jobs, share in future profits, and have greater control over their own vocation;
- Company Performance, which often is improved through increases in productivity due to employee ownership and participation; and
- The Community, in which the company is now more deeply rooted.
By expanding employee ownership and participation, these amendments would create stronger American companies, prevent job loss, and improve working conditions for struggling employees.
Related Documents:
Text of S.AMDT 4439
Text of S.AMDT 4440
Text of WORK Act (S.2909)
Text of U.S. Employee Ownership Bank Act (S.2914)