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Addressing the finance gap in employee ownership
Thoughts from Project Equity's Alison Lingane
In brief: Over at The Institute for the Future (what a name!), Alison Lingane from the employee ownership-focused nonprofit Project Equity has published a long, thoughtful piece on how more public banking could support employee owneship.
Highlights: The article is about public banking, but here are a couple of things that stood out to me:
The probably-AI-generated summary bullet points at the top of the article are intersting, but not nearly as interesting as the article. Many of my interactions with ChatGPT and other AI systems have felt like this! But I suspect we'll see more and better versions of those kinds of summaries.
Lingane shares a couple a resources addressing questions our readers have asked me about. I'll quote her in full here:
The Case for Employee Ownership offers a deep dive into the data that demonstrates how employee ownership provides benefits to:
businesses (faster growth, higher profits, outlasting competitors in business cycle downturns),
selling / retiring business owners (finding a buyer for a market rate sale, potentially significant tax benefits),
employees (higher wages, better benefits, voice in their workplaces, asset building), and
the local economy (business retention, local spending multipliers).
Each of the three main types of broad-based employee ownership — Employee Stock Ownership Plans (ESOPs), worker cooperatives and Employee Ownership Trusts (EOTs) — is slightly different. (For more on each, see Project Equity article on the three main forms of EO.)
In addition to the need to finance public banks, Lingane points to one other policy shift that would support emplyoee ownership. The Small Business Administration's loan guarantees (called 7a)... "are not a fit for employee ownership, given the personal guarantee requirement... there will need to be a legislative fix to require the SBA to make permanent changes" to that.