New legislation would expand employee ownership, preserve jobs
On December 18, 2009, Senator Bernie Sanders of Vermont introduced two pieces of legislation intended to encourage employee ownership in the U.S. The first bill (S.2909) is called the Worker Ownership, Readiness and Knowledge (WORK) Act. It would create an Office of Employee Ownership and Participation within the Department of Labor. This office 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 bill is co-sponsored by Sen. Patrick Leahy of Vermont, Sen. Sherrod Brown of Ohio, Sen. Blanche Lincoln of Arkansas, Sen. Jeanne Shaheen of New Hampshire, and Sen. Robert Menéndez of New Jersey.
The second bill (S.2914) is called the U.S. Employee Ownership Bank Act. It would provide loans and loan guarantees to ESOPs and worker-owned cooperatives to purchase a majority interest in the business and to established employee-owned companies to expand operations or to increase or preserve employment. 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 bill is co-sponsored by Sen. Leahy of Vermont, Sen. Brown of Ohio, and Sen. Menendez of New Jersey.
Why these bills are important
These bills deserve your support because they will help create more employee-owned businesses in this country. Why would this be good? Employee ownership is a proven way to:
- 1. Preserve jobs and local ownership. Rather than closing up shop or selling to a competitor, small business owners can sell to their employees. This roots the business and its jobs in the community, and provides a way for employees to share in the wealth created by the business.
2. Provide an exit strategy for owners that preserves continuity in the business. Most owners eventually want to leave the business. Selling to the employees is a way for an owner to exit gracefully, handing off responsibility to managers and ownership to employees at a pace that makes sense for all involved.
3. Improve company performance. When employee ownership is combined with participation in decision-making, businesses often see significant increases in performance. See a summary of research on this subject on the National Center for Employee Ownership’s website.
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