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Powerful, Under-used Tool For Reducing Income-inequality: Broad-based Ownership

From The Hill:

When income inequality in the United States is reportedly the highest it has ever been, it’s little wonder that the average American’s confidence in the economy is low and dropping. Gallup recently reported that the Economic Confidence Index in mid-July had plunged nearly 20 percent from 18 months earlier. The American Dream is seen as beyond reach by most Americans. If the baby boomer generation grew up in a world where many middle class families were headed by small business owners, today that path to prosperity has been largely foreclosed. The top 10 percent of the wealthiest now hold two-thirds of national wealth. Instead of being broadly shared, wealth is flowing to folks like the highest paid CEOs managing some of the worst performing companies. Meanwhile, much of the rest of America is barely getting by, with a disturbing 40 percent of jobs in the U.S. today as part-time, temporary, or contingent. It’s past time to keep leaning on old, tired solutions and recognize that if we are to have a hopeful future, it lies with tackling wealth inequality at its source, which means moving asset ownership from the hands of the few to the hands of the many.

A movement to do just that has already quietly begun at the community level. In dozens of communities nationwide, broad, local coalitions of civic, advocacy, city and state leaders are taking steps to return wealth to our communities by embracing policies and practices that create broad-based ownership.

A shift in public policy from wealth concentration and extraction to one of assets rooted in communities is both feasible and broadly beneficial. Employee-owned businesses, for example, pay 5 to 12 percent more in wages than traditionally owned companies. Workers at these firms have more than double the retirement accounts, and are one-fourth as likely to be laid off. Employee Stock Ownership Plan (ESOP) companies, over a ten-year period, showed 2.5 percent higher job growth than other firms. Employee ownership also brings increased productivity and higher profitability to companies.

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