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Skepticism Surrounding Ownership Works
Can private equity firms genuinely help workers? Or do they do more harm than good?
In brief: On May 19th, 2022, a Fast Economy article explored skepticism over new employee-ownership initiatives backed by private equity. Pete Stavros of KKR is spearheading a non-profit dedicated to employee ownership called Ownership Works. Some of group’s key collaborators include private equity firms, which has raised eyebrows in traditional employee ownership circles. Jim Bonham, head of the Employee Stock Ownership Plan Association, called the Ownership Works project “a cheap way to diffuse heat” from the private equity field, noting that this initiative is dangerous for established, genuine employee ownership providers. According to Bonham, real employee ownership is about empowering workers, whom private equity is notorious mostly for firing. Even with good intentions, detractors say, this initiative will drive more wealth to the wealthy than provide social benefits.
More recently: In January, Greg Behrman, Founder of NationSwell, sat down with Stavros to discuss his efforts to advance employee ownership. When describing Ownership Works, Stavros emphasized the importance of including private equity firms in the employee ownership movement. Such firms employ many workers, so involving the top 20 private equity firms could impact 5 million people’s lives.
So, are private equity firms genuinely interested in empowering workers or are they co-opting the employee ownership movement?