Key Challenges

Sounds complicated: Employee ownership is a new concept to many. It will take time for workforce or economic development agencies, as well as employers, to learn about different models and their potential value.

Building buy-in will take time but is worth the effort. Baby boomers currently own an estimated 2,900,000 small businesses and employ more than 32,000,000 people across the country. (Source: [Project Equity] (https://www.project-equity.org/communities/small-business-closure-crisis)) Without succession plans in place, we may lose businesses and jobs.

Employee ownership models are a way to keep companies local, transition the economic benefits of companies to employees and give employees greater voice and agency.

Unintended consequences: Companies owned by people of color or other minority statuses that depend on government contracts cannot easily convert to broad-based ownership. Current policies eliminate government contracting preferences for minority-owned businesses where majority ownership is held in an ownership trust beneficial to all employees, i.e., an employee stock ownership Plan (ESOP)(source).

Income and wealth inequality, including the racial wealth gap, continues to threaten the health of our society, and employee ownership is one way to address it directly.

Cities, counties and states across the country are supporting employee ownership through outreach, grants, tax credits, loan funds and other services using existing public funding streams like the Workforce Innovation and Opportunity Act, community development block grants and US Economic Development Administration funds that go beyond government contracting.