Creating a Business Environment for Effective Worker Ownership: Federal Policy Recommendations
The damaging impacts of the increased concentration of wealth, the automation of industry, and climate catastrophe demand that we create a different way of doing business. Corporate structures as they exist today are undemocratic, by design, run by and in the interest of a small group of elites.
Competitive and profitable businesses don’t have to be solely focused on shareholders. There are effective ways to broaden power and profits to more stakeholders. This includes the presence of diverse alternatives to the shareholder-first business model that are owned and governed in the interest of stakeholders: workers, local communities and others. What makes these businesses different is that their governance is more democratic and ownership is not concentrated so profits are more proportionally shared.
Worker ownership—specifically “broad-based” ownership, as opposed to stock options held by a smaller subset of employees —has a long history of building wealth and influence for workers. By offering workers an opportunity to share in the returns of strong corporate financial performance, worker ownership can foster a true ownership culture and a desire to engage with and grow the company. Particularly when workers are knowledgeable about how their labor contributes to corporate financial performance, and when they have influence in workplace decision-making, there can be a greater sense of alignment that helps grow the “economic pie.”
The U.S. government has the power to create an effective business environment for worker ownership models increasing benefits for stakeholders and reducing inequality.