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Why--and How-- You Should Invest in Employee Ownership

Corey Rosen April 28, 2021

In the 1950s, about two-thirds of overall national income went to labor. Today the figure is only 55%. From 1973 to 2018, inflation-adjusted wages for rank-and-file American workers were essentially flat. Meanwhile, of course, the capital-owning economy did very well indeed. The Dow was under 1,000 in the 1970s; today it tops 30,000. Between 1973 and 2018 a dollar’s worth of stock grew (in real terms) to $14.09. Yet with most of the population living paycheck to paycheck, few wage earners will be able to join the capital-owning economy. Some 60% of wealth is inherited, further exacerbating the problem. About half the population cannot put together $1,000 in an emergency, and wealth insecurity is even starker for people of color.


Capitalism is an extraordinary invention that has made the world as a whole much richer.  But it is not sustainable, or as effective as it could be, if it is seen as fundamentally unfair. This is a simple problem. Wealth in the economy is increasingly generated by ownership of capital, so more people need to have significant ownership stakes. But it is unrealistic to ask most people to save their way there. Government policies could make an enormous difference.

Employee ownership is one of the most obvious and available ways to broaden capital ownership. Already, there are over 9,000 Employee Stock Ownership Plans and similar plans in the U.S. They cover 15 million people. They have over $1.4 trillion billion in assets. Many of the plans own a majority of their company. While most of these companies are small to mid-sized, there are also some very large companies—and some well-known names. Publix Supermarkets, with about 185,000 employees, is owned by its employees. So is W.L. Gore, maker of Gore-Tex (10,000 employees), and Davey Tree (over 8,000 employees), and many others. Research sows these companies grow faster, lay people off far less, and generate about 2.2 times the total retirement assets for their employees as other companies do.

Impact investors—and owners of companies—can move this idea forward. Many owners of successful closely held companies would sell to an ESOP if they had the right kind of financing. Recently, The Ontario Health Plan Pension Fund provided debt capital to fund the 100% ESOP buyout of 1200-employee Taylor Guitars, for instance. The fund got a fair return (10%) for an investment in a stable, successful company. Because ESOPs default on acquisition loans at 2 per thousand per year, investing in these deals not only helps expand employee ownership, but provides a solid return.

This session will look at ow ESOPs work, when they need extra investments, and how that investment can be structured.



Meta Themes

  • Equity & Inclusion


Employee Ownership

Purpose and Desired Outcome

Helping social investors and owners of companies understand why employee ownership can be a good investment and a highly flexible, tax-favored route to business transition.


  • Corporate & SME


  • NameCorey Rosen
  • TitleFounder
  • OrganizationNational Center for Employee Ownership
  • StatusConfirmed
  • NameJon Shell
  • TitleManaging Director
  • OrganizationSocial Capital Partners
  • StatusInvited
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