“Baby Boomers own the majority of small businesses,” notes Oscar Perry Abello in Next City, “but only 17 percent of them have a formal exit plan for when they want to retire.” As NPQ has noted, employee ownership is increasingly considered a way to preserve jobs and businesses as owners retire. An estimated 24.7 million people work for boomer-owned companies, so this is hardly a small portion of our economy.
Typically, when US businesses think of employee ownership, the form that ownership takes is an employee stock ownership plan (ESOP) company. The most up-to-date data (from 2015) finds that 10.8 million Americans work at an estimated 6,669 companies in which an ESOP owns all or part of the company. Because an ESOP is a federally regulated pension plan, there are costs involved. For smaller companies, especially companies with fewer than 20 employees, a worker cooperative, which is directly owned by workers and is not a pension plan, is likely to be a more cost-effective way for workers to purchase the company from the owners.
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