Combatting Wealth Inequality with Employee Ownership

Highlights from the Aspen Institute and Rutgers University Panel Discussion

In an era marked by economic inequality and stagnant wages, employee ownership has sparked as a pathway for rebuilding the middle class. Employee ownership’s encompassing models such as ESOPs and cooperative ownership structures, offer more than just a stake in the company, it also provides a pathway to financial security. 

A discussion hosted jointly by the Aspen Institute and the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University titled “Rebuilding the Middle Class through Employee Ownership,” included experts

• Veronica Ortiz (Business Systems Analyst Manager, Worker-Owner, Web Industries)

• Stephen Smith (Chairman, President, and Chief Executive Officer, Amsted Industries Incorporated)

• Steve Storkan (Executive Director, Employee Ownership Expansion Network

• Tomás Durán (President, Concerned Capital)

• Moderator Abha Bhattarai (Economics Correspondent, The Washington Post)

They explored the transformative potential of employee ownership in aiding wealth inequality. Here is a selection of key points that stood out to me!

Stephen Smith 

Smith from Amsted Industries greatly emphasizes that employee ownership provides a competitive advantage because employees directly benefit from both their labor and the capital of the company. Smith says that during the pandemic, Amsted Industries demonstrated the resilience of EO because employee-owners were committed to sustaining the business which showcased employee ownership’s adaptability and efficiency in challenging times.

Smith also highlights that since becoming an ESOP in 1985, the company has created over 2,500 millionaires among its employees. This wealth accumulation through ownership enables employees, including those starting with modest incomes, to achieve financial security and comfortable retirements, which are essential for bolstering the middle class. 

Steve Storkan 

Steve Storkan, Executive Director of the Employee Ownership Expansion Network, highlights the significance of the Work Act passed in 2022, which allocates $50 million for state-level education and outreach on employee ownership. This initiative clearly aims to bolster the employee ownership movement but also enhances its impact on middle class growth.

Storkan also highlights the role of state centers in promoting employee ownership as a model that benefits not only the individual workers and businesses but also local economies. Storkan also makes a good point, these centers provide unbiased advice and support which makes EO accessible and sustainable for a diverse range of companies. 

Tomás Durán

Duran of Concerned Capital emphasizes the impact employee ownership has in Southern California, particularly in combating gentrification and creating pathways for the middle class workers in job shop manufacturing.

Duran also argues that employee ownership aside from benefiting businesses, also serves as a tool to bypass systemic barriers, such as institutional racism, enabling broader economic empowerment and wealth creation in underserved communities.