Introduction
The recent partisan vote on President Donald Trump’s “One Big Beautiful Bill” highlighted the deep political polarization in the United States Congress and across the nation. As Congress returns from summer recess and millions of Americans face economic challenges, it’s crucial to identify policies that can transcend partisanship, foster shared prosperity, and give American workers a stake in the country’s collective future.
Employee Ownership Gains Bipartisan Support
Several bills currently being debated in the House of Representatives and Senate focus on strengthening employee ownership, enjoying exceptional bipartisan support. One such bill is the American Ownership and Resilience Act (AORA), championed by an unlikely coalition of senators from strongly Republican states like Kansas, Indiana, Maryland, and Vermont, along with representatives from Utah, South Dakota, Illinois, and Minnesota in the House of Representatives. The AORA encourages retired entrepreneurs to sell shares of their companies to employees.
Strengthening the US Industrial Base
This legislation would bolster the US industrial base by investing in workers and their communities, reflecting growing enthusiasm for employee ownership as a means of wealth creation and economic inclusion for more American workers. Moreover, it offers an unusual space for consensus that Congressional members can sow, timely after Labor Day.
A Historical Perspective on Employee Ownership
Although the AORA is new, employee ownership has been a consistent yet underappreciated feature of the US economy for decades. Employee Stock Ownership Plans (ESOPs), which allow workers to acquire a stake in the companies they work for, first emerged in the US in 1956. Today, there are over 6,500 ESOPs in the country, including well-known companies like Publix supermarkets, Eileen Fisher, and Room & Board.
Diverse Structures for Employee Ownership
ESOPs represent just one piece of a broader array of cooperative, employee-shareholding, and employee trust structures across various sectors. From agriculture (Ocean Spray, Land O’Lakes) to financial services (known for various forms of customer ownership, including credit unions and mutual insurance companies), employee ownership is prevalent. Vanguard, for instance, is owned by its retail investors.
Benefits of Employee Ownership
Advocates for employee ownership praise the aligned incentives of this model: workers benefit from business success, motivating them to ensure it. Data shows that employee-owned companies often exhibit higher employee engagement, lower turnover rates, and better productivity and financial performance, especially during economic downturns. For employees, ownership can translate to greater job security, higher income, and increased retirement security.
Growing Interest in Employee Ownership
As income and wealth disparities have worsened in the US, employee ownership has garnered more attention. This is especially true as conventional means for middle-class asset accumulation (including 401(k) retirement plans and homeownership) have become more challenging to attain. Consequently, a new generation of nonprofits like Project Equity, Ownership Works, and Working World have joined forces with business groups and unions to support employee ownership. These emerging coalitions build on the work of original sectoral associations in the movement to promote political and legislative reforms, such as expanding ESOPs.
Timely Opportunities for Employee Ownership
The impending retirement wave of the baby boomer generation, along with millions of entrepreneurs needing succession plans, presents a significant market opportunity. Consequently, an increasing number of investors—from established firms like KKR to smaller startup funds such as Apis & Heritage—have focused on investing and financing the transition to employee ownership.
Addressing Transition Costs
Historically, the high cost of such transitions has been a significant barrier. Workers often lack access to the necessary capital to purchase shares, even when entrepreneurs prefer selling them to employees rather than external investors. To address this, the AORA aims to create specialized investment funds backed by up to $5 billion in federal loan guarantees, facilitating the sale of small and medium-sized businesses to employees. This government backing would reduce lender risk, enabling employee ownership transitions without taxpayer subsidies.
Local Relevance of Employee Ownership
Employee ownership resonates strongly at the local level as an effective means of preserving jobs and resources in communities. This practice is common in parts of Europe, like Italy’s Emilia-Romagna region and the Basque Country in northern Spain, home to Mondragon Corporation, the world’s largest worker cooperative federation.
American Success Stories
A distinctly American example has taken root in the US, from Morganton, North Carolina, to Cleveland, Ohio, preserving or creating thousands of high-quality jobs and generating millions in local income and assets. Federal support for broader employee ownership policies is largely inspired by state-level efforts and legislative successes.
Colorado’s Employee Ownership Initiatives
In 2020, for instance, Colorado established an employee ownership office, complementing the work of nonprofits like the Rocky Mountain Employee Ownership Center to foster a thriving ecosystem of employee-owned businesses in the region. One such company, Drivers Cooperative Colorado, is the first ride-hailing platform in the US owned by its drivers. Colorado offers tax credits to businesses adopting ESOPs, employee trusts, or similar structures and recently passed legislation to expand tax incentives for employee ownership. Similar laws have been enacted or proposed in other states, including Massachusetts, California, Iowa, and Indiana.
Conclusion
Bipartisan support for employee ownership represents an unusually unified economic vision in the otherwise fragmented US political landscape. While broad-based equity doesn’t work for all businesses, and the broader movement isn’t a panacea for the country’s complex economic challenges, employee ownership offers many Americans a meaningful way to participate in their workplaces and communities and actively engage in the nation’s economy and shared future.
The Author
Georgia Levenson Keohane is the Executive Director of the Soros Economic Development Fund and host of the Capital for Good podcast at Columbia Business School. She is the author of Capital and the Common Good: How Innovative Finance Is Tackling the World’s Most Urgent Problems (Columbia University Press, 2016) and Social Entrepreneurship for the 21st Century: Innovation in Public, Private, and Nonprofit Sectors (McGraw Hill, 2012).
Copyright: Project Syndicate, 1995 – 2025
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