Fifty by Fifty, an initiative to expand employee ownership to 50 million employee owners by 2050, convened by The Democracy Collaborative, released the following statement from Jessica Rose, CFO and Director of Employee Ownership Programs, in support of the Main Streets Employee Ownership Act.
The Main Street Employee Ownership Act creates a powerful set of tools—including access to loans and technical assistance—that will make it easier for retiring business owners to sell their companies to their employees and support those businesses in succeeding, post-transaction. By working within existing Small Business Administration programs and lending infrastructure, the bill will create tremendous economic benefit for families, firms, and communities without creating a single new government program.
Employee ownership is a proven strategy to build broad-based prosperity, and it is about time America’s small business lending infrastructure aligned with the clear benefits to working families and communities that employee ownership provides. Fifty by Fifty celebrates this tremendously well-conceived, responsive, bipartisan legislative advance, which will empower thousands more firms to transition successfully from traditional private ownership to employee ownership.
We congratulate all of the MSEOA’s bipartisan sponsors and wish especially to thank Senator Kirsten Gillibrand for her leadership in developing this important legislation.
The Main Street Employee Ownership Act of 2018 was signed into law on August 13 as part of the John McCain National Defense Authorization Act. The bipartisan legislation is the first law in support of expanding employee ownership to pass Congress since 1997. Senator Kirsten Gillibrand (D-NY) introduced the Senate bill, while Representative Nydia Velazquez (D-NY) introduced the bill in the House.
As the United States faces the imminent retirement of millions of baby boomers, the future of 2.3 million companies is at stake. Only a small percentage of these businesses will be passed on to family members or sold to other buyers. Half of owners have no exit plan—and without planning, many of these businesses will close. This could result in a significant loss of jobs and economic activity in communities all across the nation.
Employee ownership provides an elegant solution, keeping business assets and jobs in local communities an creating more broadly shared wealth. Notably employee ownership has been shown to:
Employee-owned companies operate in the market similarly to other for-profit enterprises. But their unique ownership structures mean that they may have slightly different financing needs. While the private financial services sector offers many products to meet these needs, employee-owned firms can also benefit from public programs that help other small- and medium-sized companies across America to grow and succeed.
The Main Street Employee Ownership Act will make Small Business Administration (SBA) section 7(a) loans more available to employee-owned businesses, support smooth transitions to employee ownership, and provide education and technical assistance to business owners interested in transitioning to employee ownership through the nation’s 900 Small Business Development Centers. Specifically, the bill:
Fifty by Fifty
Millions of Americans already have an ownership stake in their workplace. More than 7,000 U.S. companies are owned wholly or in part by their employees—the people who work there every day.