From The Century Foundation:

Employee-owned companies are a specific type of for-profit business owned by their workers; democratic employee-owned businesses are owned and also run by their workers. As a concept, employee-ownership is primarily about profit-sharing and worker participation. Employee-owned companies allow workers to take home a bigger, fairer share of the fruits of their labor by sharing company profits with employees. In doing so, employee-ownership more equitably distributes wealth throughout the workforce, helping to even out the lopsided capital accumulation trends that have produced the United States’ massive income and wealth disparities. Models of democratic employee-ownership not only share wealth with employees, but also incorporate employee-owners into decision-making and management processes.17 By establishing employee participation as the cornerstone of day-to-day business operations, democratic employee-owned businesses promote economic democracy also at the micro-scale, in the workplace itself. These two fundamental characteristics of democratic employee-owned businesses—equitable wealth distribution and employee participation—make them valuable vehicles for correcting deleterious income and wealth imbalances, and for building greater economic inclusivity, stability, and sustainability.

Get the full story here:

https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/