What is Employee Ownership?
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S CITIES WORK to address today’s challenges with an eye toward future economic growth and stability, employee ownership offers significant benefits as a cornerstone of municipal economic and workforce development strategies. Employee ownership is a well-established economic development tactic with a strong record in saving jobs and helping workers build wealth. The most common forms of employee ownership are Employee Stock Ownership Plans (ESOPs) and worker cooperatives. These models anchor essential production and services in communities, retain jobs, and preserve and grow the local tax base.
Employee Stock Ownership Plans (ESOPs) A type of retirement plan, similar to a
The benefits to municipalities of integrating employee ownership into an economic and workforce development strategy include: Job security and business stability Employee owners are six times less likely to be laid off than nonemployee-owners. Long-term employee-owned businesses can stabilize communities, save jobs, expand consumer purchasing power, and help businesses remain locally rooted.1
401(k) plan, that invests primarily in company stock and holds its assets in a trust for employees.
Worker Cooperatives Businesses owned and governed by
Higher wages Employee owners making less than $30,000 have, on average, a 17 percent greater median household net worth and a 22 percent higher median income from wages than their non-owner peers.2
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NAT ION A L LEAG UE OF C ITIES
workers, with the profits shared based on labor contribution and democratic decision-making.
