On August 12th, historic legislation was passed in the form of the Main Street Employee Ownership Act — legislation which promises to “support small businesses that save jobs and invest in their workers and communities by transitioning to an employee-owned business form such as a cooperative (co-op) or an Employee Stock Ownership Plan (ESOP).”
“We applaud this commitment to provide education, microloans, and training through the Small Business Administration, which will cultivate healthy business successions to employee ownership, saving critical business assets and keeping our communities strong and prosperous,” said Melissa Hoover, Executive Director of the Democracy at Work Institute (DAWI). More from DAWI:
Thousands of worker cooperatives and ESOPs in the US have demonstrated that employee ownership is good for businesses, workers, and the local economy. Companies that transition to employee ownership see an increase in productivity by 4 to 5 percent, tend to survive longer than conventional firms, and have fewer layoffs. With a more equitable pay ratio and demonstrated impacts for workers across the wage spectrum, “employee ownership has great potential to stabilize employment, to root productive capital in communities, and to increase the assets and incomes of working families,” according to the National Center for Employee Ownership.
This legislation, which improves access to capital and technical assistance for employee-owned businesses, will greatly help worker co-ops, includes directives to SBA to:
- Finance the sale of businesses to their employees
- Work with Small Business Development Centers across the country to provide training and education on employee ownership options
- Report on SBA’s lending and outreach to employee-owned businesses