A Federal Employee Ownership Bank?
Introduced with little fanfare this past August, U.S. Senate Bill 1982, the U.S. Employee Ownership Bank Act, coauthored by Senators Bernie Sanders (I) and Patrick Leahy (D) of Vermont and cosponsored by Senator Sherrod Brown (D-OH) would authorize $100 million to create a U.S. Employee Ownership Bank within the Department of Treasury to provide loans, loan guarantees, technical assistance, and grants to expand employee ownership throughout the country.
Specifically, the bill would providing financing for:
(1) loans subordinated to the interests of all other creditors and loan guarantees, to employees to purchase a business through an employee stock ownership plan or eligible worker-owned cooperative, which shall be at least 51 percent employee owned; and
(2) grants to States and nonprofit and cooperative organizations with experience in developing employee-owned businesses and worker-owned cooperatives--
(A) to provide education and outreach to inform people about the possibilities and benefits of employee ownership of companies, gain sharing, and participation in company decision-making, including some financial education;
(B) to provide technical assistance to assist employee efforts to become business owners;
(C) to provide participation training to teach employees and employers methods of employee participation in company decision-making; and
(D) to conduct objective third party pre-feasibility and feasibility studies to determine if employees who would like to start up employee stock ownership plans or worker cooperatives would be able to create a sustainable business.
In his speech introducing SB 1982 given on the Senate floor, Sanders remarked that “employee ownership is one of the keys to creating a sustainable economy with jobs that pay a living wage.”
Sanders emphasized that the bill enjoyed the strong support of the ESOP Association, a nonprofit organization representing companies with Employee Stock Ownership Plans throughout the country. The ESOP Association called SB 1982 “a modest first step in awakening our Government to the fact that in the 21st Century the inclusion of employees as owners of the companies where they work in a meaningful manner should be a key component of any national competitiveness program.”
Sanders noted the bill has the potential to reduce outsourcing by enabling more companies to sell “factories to their employees through ESOPs or worker-owned cooperatives” rather than relocate abroad. Sanders also pointed out that “employee ownership has been proven to increase employment, increase productivity, increase sales, and increase wages in the United States. According to a Rutgers University study, broad based employee ownership boosts company productivity by 4 percent shareholder return by 2 percent and profits by 14 percent. Similar studies have shown that ESOP companies paid their hourly workers between 5 to 12 percent better than non-ESOP companies.”
Posted by Steve Dubb on 11/27/2007 at 01:28 PM
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