Growing Economic Freedom and Prosperity: The Case for Employee Ownership

good morning my name is Maureen Conway I'm a vice president at the Aspen Institute and executive director of the economic opportunities program I am so thrilled to welcome you to the employee ownership ideas Forum um we have been working together with our colleagues at the Rutgers Institute for the study of employee ownership and profit sharing on planning this for a while and we're just really thrilled to see everybody here today so many thanks to everybody for joining whether you just walked over from your office or whether you traveled here from a different part of the country or whether you are joining us virtually and we do have a great virtual audience today as well I really want to want to thank everybody for being part of the conversation I also want to thank Prudential Financial JPMorgan Chase and Company the bister foundation for Enterprise development and the J Robert byister endowment at Rutgers School of Management and Labor Relations for their support of this event so there are so many reasons to be excited about expanding employee ownership in the United States and we have lots of folks who are going to talk to you about their experiences and their reasons today but let me tell you briefly what's motivated us at the Aspen Institute economic opportunities program our mission is to advance policies practices and ideas that can open Economic Opportunity to more people in communities all across the country so that you know individuals families and communities can can support themselves can earn a living and really are are free to lead kind of the lives of their choosing um and in that work we spend a lot of time thinking about how more low and moderate income people can connect to to good jobs and we think of good jobs as sort of having three basic pillars they're jobs that provide decent wage and benefits provide sort of basic economic stability there are jobs that offer opportunities to learn and grow for economic mobility and for wealth building and there are jobs that provide a culture of dignity of respect for workers and for their for their contributions um and our and and our Equitable workplaces so we really think of these as kind of the three pillars of of a good job um but too many workers across the country don't have jobs like that right they lack some of these elements of a good job uh but when we look at employee-owned companies something is actually different happening within those companies they often have better pay than similar uh companies uh greater chances to build wealth and a culture that really does actually listen and engage them um in their in their in the work of the organization so as we think so as we often say also good jobs are good business and we see that employee-owned businesses often have higher productivity greater employee retention and greater resilience uh in the face of a downturn than non-employee owned peer companies so we have many reasons to be excited about employee ownership but in addition we also spend a lot of time thinking about how participation in business ownership is an Economic Opportunity strategy and we know that business assets are a huge source of wealth in the country and to really address the issues of of wealth inequality we need to include more people in business ownership um so these are all the the many reasons that we are excited about having this conversation today and really having two days of conversation around how can we expand opportunities for employee ownership um okay I'm gonna skip the rest of that part um just moving along um so I think the question we're going to be thinking about is how can we support and grow more employee-owned companies um we're gonna have four conversations lined up today to to look at that we're going to look at some of the research behind employee-owned companies we're going to discuss recent legislation and policy development um we're going to explore sort of the role of government in supporting employee ownership we're going to think not just about sort of policy making but also policy implementation um uh and we're going to think about what are some of the the barriers that we still face and what more can we do to um to grow employee ownership so we have a great room here and also joining us on online so we really do we're trying to have um q a and all of our panels and we really are encouraging you to um to participate in the conversation we're going to have a short break between panels and we also have time at lunch so we also really encourage you to try to get to know one another because there's there's lots of wisdom in this room so um so hopes that you'll take take advantage of that um okay before I introduce my uh my wonderful partner Joseph blasey and colleague and and all this work uh I need to go over a couple of logistics uh for our online audience so all the online audience uh attendees are muted but you can use the Q a button and I was emphasizing we do want to try to take questions so please use that q a button on the bottom of your screen to submit or upvote questions we also encourage you to share your views um uh so if you use the chat function please contribute things that you're working on related to today's conversations we all we love to hear what you're what you're doing um we encourage everybody to tweet about this conversation the hashtag is talk ownership if you have any technical issues please message Us in the chat or email eop.program aspeninstitute.org the event is being recorded and will be shared via email and posted on our website closed captions are available for the discussion please click the CC button at the bottom of your screen if you you'd like to activate those um one slight change to our agenda is that Adrian Eaton Dean at the school of management and Labor Relations at Rutgers will be providing closing remarks along with Sarah K today so just wanted to note that on your agenda and now it is my delight to introduce my colleague Joseph blasey Joseph is the J Robert bister distinguished professor at Rutgers University and director of The Institute for the study of employee ownership and profit sharing at Rutgers University many of you know Joseph and know that he is a world-renowned expert in employee ownership and we just wouldn't be here today without his contributions to the field he's been a wonderful partner for for me and for us at the Aspen Institute to work on in planning this event and and so many other things that we've worked on together so Joseph I am turning it over to you thank you [Applause] thank you very much Maureen and I'd like to welcome you and the hundreds of people in the live stream audience and it is hundreds of individuals which is really wonderful um and welcome you on behalf of Rutgers University School of Management Labor Relations and the institute for the study of employee ownership and profit sharing it has been a absolute pleasure to work with Maureen Conway and and Matt Helmer of the Aspen Institute this has been a wonderful partnership we've had a team of 10 people from Rutgers and Aspen working together for months and we're just delighted to see it all happening right now uh at Rutgers we are very grateful to uh Marianne meister and the Meister foundation for Enterprise development along with the bister and dominant Rutgers which sustains us into perpetuity I guess perpetuity is pretty long uh uh and we are enormously thankful to uh Prudential Securities uh for their wonderful support to allow this event to be planned and to thrive and to be a wonderful success uh in the tone of the historical place where we are when George Washington assumed the presidency of the United States in 1789 he confronted an almost bankrupt Nation one of the principal exports of the colonies was dried cod in barrels that were caught along the Atlantic coasts and exported to Europe kind of like the microchip export industry today although microchips aren't as smelly during the Revolutionary War the British engaged in economic Warfare by destroying cot ships arresting the sailors demolishing the warehouses and the areas on the shore used to dry and pack the cloud Often by families these were often family businesses President Washington quickly called in Secretary of State Thomas Jefferson and instructed him to bring the Cod fishery back Jefferson was negotiating The Fishery rights issues after the Revolutionary War Jefferson began a research project on the export industry maybe the first research project in the United States on profit sharing and employee ownership in effect it was an interesting situation since we knew no he did not get along well with Secretary of Treasury Alexander Hamilton but he asked Secretary of Treasurer Alexander Hamilton to loan him the only political Economist in the treasury Department who was a secretary first assistant Secretary of the Treasury tench Cox and he did research on the cloud industry he helped Jefferson produce and you can Google it the report on the American Fisheries you will see in the first three pages of the report it opens with something from assistant Secretary of the Treasury tench Cox's research assistant Secretary of the Treasury studied cod fishing boats and he found that those were the sailors were paid a fixed wage had lower productivity than those where the sailors were paid a fixed wage plus profit sharing which had higher productivity and this was reported to Jefferson and to Washington uh profit sharing had been a social custom of many cod fishing boats for over a century and a half all along the Atlantic coast and in fact five years ago I went up to New England and found out that in fact many of the boats were open to ownership shares by employees some of the votes were entirely employee owned some of the larger ships had ownership ownership shares so likely a very early form of employee share ownership many of these boats uh were in the context of small family businesses the sailors in fact at that time were called sharesmen although both men and women were involved ultimately Congress passed and President Washington signed into law uh his first economic uh piece of legislation designed by New England Senators the government provided a tax credit a reduction in taxes on what were tariffs on supplies that the fishermen and the boats had to buy at that time the size of the tax credit went up with the size of the tonnage of the boat or ship in order to get more ships to launch to revive uh the industry but the most interesting part of the legislation were two details that I want to stick in your mind one is uh that in spite of the fact that the ship owner said give all the tax credit to us uh the Cod fisherman appeal to their Congress people and senators and 40 percent of the tax credit was guaranteed to go in cash to the sailors but that's not the most interesting part the most interesting part of this is in order for the captain of the ship to collect the tax credit at the Customs houses and you've seen them all up and down the Atlantic coast he had to produce a document a signed document signed by all the sailors of the ship that there would be profit sharing on the catch okay and now with this uh I am delighted to introduce Senator Cardin Marie [Applause] right excuse me Senator I'm supposed to I'm supposed to give you some uh some fabulous opening remarks introduction here so and and really we do want to thank you so much for being here because Senator Cardinal has indeed been a leader um in so many ways in our country he's been a leader on Healthcare retirement security environment fiscal issues um he is from my home state of Maryland um and uh Senator I've had the pleasure of seeing you at many of our local Fourth of July parade so thank you um uh and of course he's been a long-standing supporter of employee ownership worked tirelessly to support its growth Senator Cardin currently serves as chair of the small business uh and Entrepreneurship committee which is at the Forefront of rebuilding our economy he is also a senior member of the Senate Foreign Relations finance and environment and Public Works committee Senator Cardin has been a strong champion of small businesses and was critical in getting support to small businesses during the pandemic he was also responsible for the extension of increased guarantee keys and reduced fees in the small business administration's two largest loan programs he has made it a priority to find better ways to provide access to credit for qualified small businesses and entrepreneur particularly minority-owned women-owned and veteran-owned businesses from 1986 to 2006 Ben Cardin represented Maryland's 3rd congressional district in the U.S House of Representatives and served for 17 years on the Ways and Means Committee as a member of the Maryland house of delegates from 1967 to 86 maybe you didn't want me to go through this whole history but anyway but Senator Cardin thank you very much for being here today we really appreciate it [Applause] well Maureen first of all thank you and the Aspen Institute for your helping to convene this along with Joe thank you on behalf of the Rutgers Institute for the study of employee ownership and and uh retirement and uh profit sharing I knew I get the last three words there profit sharing absolutely Marina Maryland has a lot of known for a lot of things one of the things we're very patriotic State we've have over 400 000 who have served our nation in uniform so we have a lot of Fourth of July parades which one were you at which one Tacoma Park oh well Tacoma Park has its own independence day parades of times so it's wonderful to be here thank you very much uh for uh hosting this session on ownership ideas on how we can advance employee participation in the American dream so let me get back up a little bit when I was uh in the state legislature many years ago I got involved in esop's why because Maryland had a lot of esops in fact we led the nation in the highest penetration of employee-owned uh companies of any state in the nation so that got my attention but more importantly I visited those locations and they were all very productive economic Enterprises because their workers had a share in the profits and the work ethic there was one of which made Maryland's companies more competitive and gave stability and we went through economic downturns these companies were able to go through those and with the cooperation of their Workforce were able to solve those challenges so I was sold on the ESOP program well before I came to Congress when I came to Congress I had a chance to work with Congressman Rob Portman the both of us were in the House of Representatives together Rob was a is a republican I'm a Democrat we worked together on a problem we identified and that problem was we were going through an economic growth period in this nation and we were looking at the economic indicators in America and just about every indicator we ranked first among all countries in the world on economic growth job creation wealth Etc but where we ranked near the bottom was on National savings and particularly retirement savings and we were extremely vulnerable and not having enough retirement Savings in this country so the two of us decided we would do something about it and we set up a process in which we brought all the stakeholders together to look at how we could encourage more retirement Savings in this country and we were successful in getting three major bills enacted into law and I'm going to tell you at that time we didn't have the attention of the leadership of either party or the white house and we were able to get those bills done because we worked with the stakeholders but one of the tools that we looked at as being an extremely helpful tool for retirement security resupps because you have a transition period when you retire you have part of the wealth of the company it was a natural way to supplement retirement security so we were interested in expanding the opportunities for esops in our nation and as we did that we recognized there was this disconnect between the Internal Revenue code and what you needed to do because the Internal Revenue code was developed with traditional companies in mind with stockholders and employees and did not really fit the model of an employee-owned company so we work to change that and we were able to get legislation passed that harmonize the tax code to encourage more employee-owned plans and then s corporations became the preference model for a lot of the smaller companies with pass-through income so we had a lot of s corporations and how could we harmonize s corporations with esops and we work to do that so as a member of the finance committee along with Senator Portman who became a member of the finance committee we changed venues from the House of Representatives and the ways of Means Committee to the United States Senate and the finance committee we were able to get major legislation passed to harmonize these Provisions now I'm chairman of the Small Business and Entrepreneurship committee and in that role worked with the SBA because the SBA had a hard time understanding ESOP plans and scsop so we were able in recent years to change the SBA laws so that they recognize esops and allowed the tools of the SBA to be applied to help esops and the transition of s-corporations into esops one example of what we were able to do and just recently the SBA issued one of their standing operating sop standing operating practices is to understand that in participation with SBA Loans we require Equity investment but esops don't have Equity Investments their employees are the investors so we were able to get a waiver of that requirement uh for esops that's just one example of how we've been able to harmonize the different roles most recently we're having a problem in s corporations that want to transition into uh s esops and we've had a major problem with particularly uh the stockholder of the S corporation wanting to to to to have their employees own the company getting evaluations and working on financing we've been able to resolve those issues to harmonize to encourage more uh s esops from s-corporations moving forward so we've been working with this today I don't have Rob Portman in the Senate anymore he's moved on I regretted that but Senator daines is taking that role on the Republican side so we have bipartisan legislation in order to try to move forward and to do everything we can to encourage Employee Stock ownership plans to encourage to transition of s-corporations into esops and to harmonize our laws our IRS laws our SBA laws to recognize the public value of encouraging Employee Stock ownership plans and I'm pleased to say that it no longer is a divisive issue we have strong bipartisan support and I'm optimistic that we'll be able to continue to improve the opportunities that are available so I thank you for convening this opportunity we look forward to your suggestions as to how we can have greater opportunities for Employee Stock ownership plans recognizing the value it is for wealth accumulation for entrepreneurship for buying into the economic progress of our country it also helps us in regards to retirement security taking the pressure off of of our other social programs such as Social Security thank you and it's always good to be with you and I hope you have a successful meeting [Applause] thank you so much Senator Cardin that was fantastic we appreciate you being here um and now I am delighted to uh introduce congresswoman congresswoman Chrissy Houlihan representative Houlihan is an Air Force veteran engineer entrepreneur and educator who is continuing her career of service as the first woman ever to represent Pennsylvania's sixth district in Congress Chrissy has helped lead several thriving Southeastern Pennsylvania companies including and D1 and one a basketball apparel company and B lab the organization that launched the B Corporation movement she went on to serve and Teach for America as a chemistry teacher at Simon Gratz High School in North Philadelphia and led and scaled a non-profit helping thousands of underserved underserved students all across America build their literacy skills she is committed to working to build a strong stable economy with good jobs and good benefits for everyone many thanks for that dear near and dear to my heart since serving her community in Congress she has been awarded the Abraham Lincoln leadership award for America award and three Congressional management Foundation democracy Awards representative houlhan has been a strong supporter of employee ownership and recently helped introduce the employee Equity investment act with her colleagues representative Houlihan thank you so very much for being here today really appreciate it [Applause] and thank you so much for the introduction and it is really awesome to be here with you all this morning about this uh important employee ownership ideas Forum I'm glad to be with you today and to share a little bit more about my background and interests on this topic and how much uh promise I think we all have together to make a difference in this particular area as you mentioned before uh joining Congress I represent Pennsylvania's sixth congressional district and it is in Southeastern Pennsylvania just outside of the city of Philadelphia where you maybe have watched the most recent disaster that happened on our I-95 but our community my community is 40 percent Democrats 40 percent Republican and 20 percent independent so I'm really really proud to serve that very very purple community and to bring a real bipartisan and pragmatic set of solutions and perspectives for to our work here in Congress prior to joining Capitol Hill as you mentioned I helped to scale a variety of different organizations in the Pennsylvania area many of which became either nationally known organizations or internationally known organization and my entrepreneurial background helps me a great deal in thinking about the importance and the potential of making sure that employers take care of their workers take care and invest in their communities and are ultimately a Force for good in terms of our opportunities with our for-profit sector it's this Vision which led me to found and chair a caucus in the House of Representatives alongside rep Dean Phillips I'm not certain if you'll have the opportunity to talk with him today or if he's already come it's called the stakeholder capitalism caucus and it's our mission to make sure that we learn from leaders across the private public and Civic sectors who are reimagining capitalism and who know and understand that the role of business and corporations in America is to Foster inclusion to generate long-term and Lasting growth and to benefit all stakeholders more widely and more equitably so this past year our caucus has hosted a variety of events one event which focused on employee owned businesses from our districts and focused on how these businesses and this business model can make sure to keep businesses and jobs in our local communities to empower our workers and to build and sustain sustainable resilient and productive Enterprises I was really proud specifically to host a group from our community called The Standard Group this is a company that is a print management and marketing and logistics company that's based in my community of Reading Pennsylvania if you have ever played the game of Monopoly you remember the reading railroad Reading Pennsylvania is part of my community the company transitioned from being employee owned to being the employee owned in 2017 over a century after its founding and they continue to be an active and integral part of our community and a real guiding in North Star for the opportunities of doing this employee ownership transition in talking with local employee-owned companies it's very clear that employee ownership has the potential to solve all a lot of problems pressing on us on our economy as we face today and I think I heard some of them from the senator as I walked into the tail end of his conversation and those things of Promise include making sure that we can close racial and gender wealth gaps making sure that we can protect Community jobs amidstar aging Workforce sometimes we hear that referred to as the Silver tsunami and better supplying employee supporting employees and their families as well to this point and I'm an engineer as you mentioned so data really matters to me data shows that workers who are employed at esops report significantly greater access to training to involvement in company decision making to profit sharing and to gain share and to gain sharing all of which which is of course really critical to promoting equity in our workplace environments also furthermore esops and cooperatives have been shown to produce higher wages to promote job preservation for their workers during periods of economic distress as well as to invest more in their local communities than conventionally owned businesses do so despite these benefits it's clear and again I think I heard the senator referring to this as well that there are a lot of challenges to expanding the prevalence of employee ownership notably there are Financial barriers to mobilizing private investment and other regulatory barriers as well to accessing service through the small business administration as well data again shows that fewer than 15 percent of business owners have a formal Exit Plan I'm going to emphasize that again fewer than 15 percent of small business owners have a formal exit plan in place and only a very small percentage of those businesses will be passed on to family members or bought by another local community a company so far too often the consequences are that business might be closed because of lack of succession planning and difficulties in finding a buyer which therefore costs jobs and negative negatively impacts our communities as well importantly compounding this issue is that when a business is undergoing that ownership transition traditional buyers in the mergers and acquisition markets in our sort of traditional Capital markets are often initiating transactions with sellers while also providing the financing as well this is not the case when we talk about employee ownership transactions in fact with most employee ownership transactions or conversions it's the seller who has to initiate and also Finance some ins in some cases all of the transaction themselves which means in many cases that they have to wait between five and ten years to receive full payment on their investment or on their conversion so to help solve this this is I believe also what the senator was referring to I was proud to come together with representative Dean Phillips alongside representative Blake Moore and representative Dusty Johnson if you heard that you will hear two Democrats and two Republicans on the house side to introduce the bipartisan and bicameral employee Equity investment act so this eeia because we couldn't be here without our acronyms would utilize the sba's existing small business Investment Company or sbic program that would allow us to provide loans guaranteed loans for investment funds that would be devoted to expanding employee ownership as well so these investment funds would allow us to finance and facilitate the process of selling a company to its employees and to sustain and expand existing employee-owned firms as well this would significantly expand access to financing which is one of the biggest issues that we have or hurdles that we have while at the same time importantly in this environment particularly if you've been paying attention to the news lately having zero cost to the taxpayer as well so I'm really looking forward to working with my colleagues both on the house side and the Senate side to work this through the small business committee and through the house floor and senate floor to the president's desk for signature for those who remember your Schoolhouse Rock all of those things have to happen in order for a bill to become a law and I know that this effort is just one of many policy solutions that we need to be able to support the expansion of employee ownership as well but I am very much encouraged particularly in this very difficult environment by just how bipartisan this work is and how the work of employee ownership as a real opportunity for legislative help and legislative Solutions I really look forward to working with the stakeholder capitalism caucus as well and with my colleagues across the aisle to benefit these future employee-owned companies I would ask of you and I thank you very much for the opportunity to serve with you today and to talk about these issues please please please reach out to your various members of Congress and your various senators and talk to them about the importance of of this legislation this is a confusing time what I will share with you is that on every two-year cycle there's about 9 000 pieces of legislation that are introduced every two year years we vote on just a few hundred of them every year on the house side we passed just a couple hundred of those as well and then of course they need to be taken up by the Senate too so if you're visualizing that pipeline of nine thousand down to a couple hundred down to 100 or so on to the president's desk for Signature this is an attention deficit disorder issue we need to make sure that you are drawing attention to these particular pieces of legislation and squeaking because the squeaky wheel gets the grease in this organization and in the one that I'm standing I guess I'm on the Senate side now as well so I really appreciate the opportunity to serve but I need your help to make this happen and so thank you for inviting us foreign [Applause] thank you very much congresswoman that was fantastic really appreciate that and appreciate the call to keep squeaking um and it is now my pleasure to introduce Elias Gerson Executive Vice President at the Aspen Institute um Elliott is responsible for the institute's policy programs it's public programs and its relationship with its International Partners so that means he's my boss he's responsible for me um um Elliott also administers well it used to administer he tells me he has let long last stopped administering the U.S Road scholarships we'll see but he was a road scholarship at Oxford also a U.S Supreme Court Clerk practiced law and government and privately held executive positions in state and federal government on a presidential campaign and was president of startups and health care and education and of two leading National Insurance and health care companies um I thank Elliot for being here I know I can always count on Elliot for being here to be here Elliot is a strong supporter of the work of the economic opportunities program and somebody I know I can always rely on so Elliot thank you so much for coming today and I turn it over to you foreign and I I think representative Houlihan left but she didn't mention one thing that I just happened to mention to her I've had a very privileged life with lots of wonderful jobs and opportunities but perhaps the most formative opportunity I ever had was working with her father who was a Navy Captain an extraordinary man who worked for the Secretary of Defense in the Carter Administration so it was a special treat to hear her but it is also an enormous treat to be here and I want to thank Maureen for the introduction and for the great work that she does and Joseph and for both of the teams for the work that they've been doing which frankly couldn't be more important in our economy in the state of our country today at the Aspen Institute we are immensely proud of the work of The Economic Opportunity program which is focused of course on expanding opportunities for people in communities across the country and this relationship we have with the Rutgers Institute for the study of employee ownership and profit sharing has been from our perspective enormously uh exciting intellectually stimulating and most importantly uh productive to real change in our economy and the opportunities for those who are left behind in it uh this conversation today comes at a time of tremendous economic flux as growing numbers of Americans are frankly questioning whether our economy works for them even before the covid-19 pandemic in an allegedly strong economy workers at the bottom of the opportunity scale we're struggling to support themselves and their families not only have the incomes of the lowest paid workers stagnated or actually Fallen as the cost of Essentials such as housing health care and transportation have climbed but at the same time wealth inequality has soared I think back to actually the time when I worked with the congresswoman's father uh just as I was beginning my own work career about 45 years ago and think how much change there has been just in that 45 years in terms of the gap between those at the bottom starting up and those at the top and and and everything associated with that the changes just in the Decades of my adult life have been profound and the consequences in my opinion for the country have been profoundly negative the divisions in wealth between men and women between white households and households of color are particularly striking white households have roughly 10 times the wealth of black households and households headed by single women have less than 40 percent of the well wealth of those headed by single men as the pandemic shut down so much and had so many of us working from home essential workers including the front line health care workers the delivery and truck drivers and all the other people who work to keep everyone else moving and and alive and well kept our society functioning and this is what they have always done but they have are rarely granted the dignity that they deserve for that as the economy slowly reopened many workers started to question the wisdom of going back to that status quo people have called it various things either the great resignation or the great reshuffle or the great renegotiation no matter what you call it it was clear that many workers had simply had enough of low pay lack of opportunity and poor working conditions that they'd endured for well too long the experience though was quite different for employee employees at employee owned companies as we'll hear during this forum research shows that if you give employees a real share in ownership they're going to reward the company with higher productivity and higher retention which in turns brings about of course greater business resiliency for weathering the inevitable tough times but employee ownership isn't just good for business it's good for us as a society and a nation and that is why it is such an important priority for the Aspen Institute our mission at The Institute in the almost 75 years since we were founded has been to drive change that leads to a free just and Equitable Society employee ownership strikes me as something that fits absolutely perfectly within this Mission it gives workers a say in their future it's just in that it provides workers with ownership and something they have helped build and makes successful and it's Equitable in that everyone gets a share of that proverbial pie Aspen's founder was named Walter pepke he was a businessman who was also a a humanist as a matter of fact The Institute used to be called the Aspen Institute for humanistic studies and it was his idea that leaders who come together in in in in with moral Clarity and apply their leadership using the values that are so important to constitute not only a good company but a good Community but a good society that it is essential for for those leaders to apply those values-based principles in everything they do and if they do that will benefit the society he took upon himself his own role as CEO of a major American corporation to Champion these principles in his own workplace as leader of the Container Corporation of America he extended stock owner ship pension plans and cultural employees vary widely to employees he prioritized promotion from within and though the company was not employee owned he was proud of the fact that many of its shareholders were everyday middle class Americans he cared deeply about the success of his business and he knew that the success of his business relied on capable and committed employees and that you won't have such employees unless they are included fundamentally in the success of the business he knew all those years ago that treating your workers well would create a virtuous cycle of shared success and in some sense We are Becoming full circle at least an aspiration not yet in reality in 2019 as all of you know the Business Roundtable redefined the purpose of a corporation and Aspen had a small role in that uh redefinition as serving all stakeholders and not just shareholders and and this explicitly includes investing in employees and providing them with Fair compensation what better way to make good on this than through employee ownership we know it has bipartisan support and you heard that so clearly just now in the remarks we've seen that with the work act and now with the employee Equity investment act we know it helps workers it helps businesses and it helps our economy and this is also about the values we hold about who and whom we value in our economy today we have record low unemployment and record high GDP but too many Americans still feel that the economy just is not working for them that they've been left out of this prosperity and so it's more important now than ever to come together and build shared solutions that renew the promise of the American dream for so many people who have no longer you know kept belief that it really applies to them I'm excited for the conversations you'll have over the next couple of days and uh we're delighted to be part of this with Rutgers and and the Aspen Institute thank you for your commitment to this important work and I now turn it over to Maureen thank you foreign all right you're almost done with me for the moment I now get to invite our our panel to the to the stage so I'm going to uh we have um and we actually have this nice little code if you want to see people's bios um they are a great panel I'm not going to go through their bio so I'm just going to welcome to them to the stage Joseph flossie uh J Robert byister distinguished professor as I introduced before um Heather Bainbridge Cox president and CEO of windings Inc um Alex Brill senior fellow American Enterprise Institute uh welcome to the stage is is Jen Briggs here there she is uh Jennifer Jennifer Briggs executive director of civico founding partner of grit business coaching member of the Colorado Commission of the office of employee ownership and former vice president of human resources at New Belgium Brewing um and delighted to have our moderator here uh Zach warmbrock from Politico to lead this conversation so Zach let me turn things over to you okay hey good morning uh again my name is Zach warmbrot um I'm the financial services editor at Politico and I co-author our morning money newsletter so I help us keep tabs on financial policy um I just wanted to set the stage a little bit and give a little preview of what we're going to get into um I think is um Elliot was kind of getting into a little bit at the beginning just a big picture it's a it's a weird time for the economy um cutting coming coming out of covid-19 um you know with uh the fed you know continuing to hike interest rates but pausing today because it's even a little unsure about all the forces that are kind of coming together with the labor market staying strong um I think it just has people here in Washington and on Wall Street kind of looking around the corner where's the next recession and so that's kind of helped Focus uh policy makers Minds on you know what what can we do to support workers and and the health of companies um and so um just a couple stats um to start off with um there's six thousand ESOP companies which you can correct me if that's that's out of date and that's about 10 million uh individuals who are in those plans um so just kind of a a small number but policy makers are trying to find ways to to make those numbers go up um 10 10 million workers that's what he said um and so the the we have an amazing panel here today of people who are uh just really steeped experts on this uh uh from uh working at the companies or in Academia and um and we're gonna try to break it down into three different buckets how um does employee ownership impact workers at these firms uh what are kind of the bigger impacts for companies in the economy and then also um what are kind of the policy next steps um so first Jen I wanted to start with you um you spent uh more than a decade at New Belgium Brewing which was one of the leading companies in employee ownership um so I was wondering if you could just tell me a little bit about yourself and your experience and why now is an important time to be talking about this issue well I had the Good Fortune before this to go through and exercise with a group I love to work with around defining your personal purpose and so if you've never done an exercise like that I really like a deep deep thinking thinking exercise to do that but um you know what I I feel like my life path has brought me to is here where we're working at the intersection of economic prosperity and Community vitality and everything I do for almost the past 20 years has been there so you're right starting at New Belgium and I think this topic is almost hard to talk about because it's very systemic and we have when I was there I got to go to the the White House Summit on worker voice so we had democracy and worker voice good jobs and and doing some work with the Hitachi foundation and Marianne Meister commissioned a documentary called we the owners on three companies one of which was New Belgium that was profiled when the company was sold and I know this might be a controversial opinion to some of you it did create that engine of wealth where a lot of people received more than six-figure payouts in their ESOP transactions so you know when we talk about that churn of business selling it did serve its purpose to create wealth for a lot of people and which is pretty incredible but you know now serving on boards and and corporate boards for esops and continuing this work and continuing to make it make it just visible a lot of us in this room I know many of you are doing the same thing as we want to build more High performing esops because a more High performing esops we have hopefully the more companies will want to become esops as well too so it really has just been for me at this point in a lifetime of work of of trying to do this and help people understand the power and impact and it's not just economic it's the it's that economic system at the macro level it's the social system at the micro level but it's also the social system and the financial system at the corporate level and and it's just multi-horizonal it's really powerful um and Alex um you're you're uh a tax and and budget expert who's worked in the house and in the white house um how did you get interested in this issue yeah uh thanks and thanks for having me um for this important discussion today um I am a at my heart uh a tax guy um I I think of I know it always gets a laugh I never still don't know why I know no one's left though so it's okay um uh so I I think a lot about uh tax policy what economists call Optimal tax policy and and efficient ways to raise revenue um and a lot of that has to do with with finding ways to raise this the the necessary funds to to finance the operations of our government and to do that in a way that either doesn't cause any harm or causes the least harm or promote sometimes even promotes the the most good um and so it's not just about the dollars that the government collects and and the distribution of those of those payments um but about the consequences of those policies um you know for good and for bad when we think about um employee ownership we have a very a favorable tax system in place to encourage esops and we have consequences a result as a result of those policies and so what I'm very interested is a tax guy is what are the consequences of our tax policies and what I've observed and and contributed to a bit but observed in the research a lot is how the existing tax structure which is favorable for employee ownership has resulted in these firms not maybe not as many as we wish but in many and that those firms are performing very well we heard some of that from Senator Cardin earlier and and I'm sure we'll hear that all all day long but firms that are esops have a tendency to outperform um their their non-esop peers and as a tax matter that's that's super interesting right and attack and as an outcome matter it's super important thank you um Heather uh could you talk about your path to Leading an employee-owned company winding Inc and how was different from your past experiences in business thank you Zach you have actually given me a soapbox I am an advocate for esops and when you hear my story you'll understand why I start first with explaining uh whose windings windings is a custom manufacturer of electric motors we are located in southern Minnesota two hours from from Minneapolis so it's really Farm country but we build electric motors for critical and specialized applications so you wouldn't find our Motors off the shelf or in a ceiling fan or vacuum cleaner our Motors instead would be on a the perseverance Rover landing on mars or circling the Sun and studying the corona or Military and Commercial flight or surgical tools give you an idea of how specialized what we do is all about so we make Unique Designs really for high pressure High temperature environments we became employee owned in 1998 so that's over 25 years ago I only joined windings in 2015. when I came aboard as the then CFO the employee ownership was quite appealing to me at the time because I had a long career in private equity and I hope there's nobody in the audience who's from private equity I'm not knocking them private Equity is a model and it works well but it works well for the select few and I learned I was that operator who would go in and my job was always to write the ship turn things around pay off the debt increase the multiples and find a way to exit in three to five years and what I found was that every time if I was successful I would start over every three to four years and the people who had worked with me to build this business got little to nothing if anything we were laying them off because the business was moving out of state or it had changed ownership and they were going in a different direction and after a while for a leader it takes a toll on you how do you every three to four years encourage people work really hard and in three to four years you got nothing so employee ownership when the opportunity came it suddenly I immediately connected with it and what this could do for a business and so I moved clear across the country from Mobile Alabama to the most northern state in the country Minnesota and didn't realize it had six months of winter when I did that but but um it was because of the employee ownership and what I felt it could really do for a business so fast forward here we are um the company has been doing really really well and many of our employees I have to say have healthy account balances the average account balance for our employees is over a hundred and seventy thousand dollars and for those who have been with the business more than 15 years the average of their accounts is closer to half a million dollars we've made several millionaires in this little small town of 14 000 people the impact we have on our community think about that so employee ownership I'm an advocate and that that's been my journey um I'm really passionate about esops I guess you can tell um but but I really believe there needs to be a way to open this up for more people to enjoy the benefits of generating wealth for themselves and their families thank you heather that was really insightful and that was a really good transition to to Joseph and and a few questions focused on workers um but uh Joseph could you could you give us you know some uh information on what the numbers tell us I mean what what are the outcomes like for workers at employee-owned companies well uh using data a recent data from the Department of Labor together by the national Center for employee ownership that these are population data from the Department of Labor uh there are 6447 uh esops with the wealth of 1.8 trillion and if you just count the employees who are who are actually functioning employees not retired that's an average of 180 292 dollars per employee using the General Social Survey which is sponsored by the National Science Foundation with data just from uh 2022 we see that after 10 years the esap workers after 10 years seniority have an average of 315 000 in wealth and Rutgers has done other studies using ESOP administrative data suggesting that that number is quite significant more significant after uh after 20 years now by comparison uh using the 2022 General Social Survey looking at all non-esop employees non-esop employees in equity compensation plans and employees your ownership plans in the non-esop rest of the economy in their companies they have an average employee ownership value of ninety thousand two hundred ninety eight dollars but uh those employees are typically in plans that don't include all or most or even a significant number of the employees of those companies so we stand in this particular situation by by the numbers I mean esops are the leading broad-based format in the country uh there are some exceptions in equity compensation plans uh there are few and far between there has been a massive a massive reduction in broad-based non-esop equity compensation plans in the United States so going in the other uh in the other direction now at Rutgers uh when we uh came up with the idea of the Institute our goal is to study all forms of shares from the purest worker Cooperative to the employee receiving restricted stock options restricted stock units at uh at Google and everything in between and one of the things that I found during my career 45 years in this field is that every five years uh um whether it's Congress or think tanks or the press or thought leaders comes to us and says what does the research show and it really bothers me because it's the research that you did five years ago they forget about and they want in fresh bread out of the oven so uh um we often keep redoing the same studies and so we put together this little research brief on employee ownership uh and esops because esops were part of the 2022 uh General Social Survey and we got data hot off the presses from uh 2022 and we do see uh the job stability the wage stability uh the lower layoffs uh the better wealth the General Social Survey is is a great National random sample of the United States and so here it is we're back after another five years with the new set of data showing the patterns that we've been seeing really over the last over the last 20 years and I'm not going to go through reading the research brief but there's some interesting data here and one that really surprised me when we first found it is that nine seventy percent of esap workers report that they have profit sharing so esops really are share companies not just long-term Equity participation but short-term profit sharing which is another way that they encourage job quality so I'll stop with that thank you and before I forget I think we will have audience q a at the end so if you have any questions please please uh have those ready to go um and Heather uh I wanted to kind of go to the ground level following up on what Joseph just said I mean how how do your employees kind of compare to employees of other companies in your space you know relative to employee ownership and also what was your uh experience during the pandemic oh so by now you would have you would have understood that what we do is highly engineered and so it requires top talent um which means we're competing for the best of the best a new hire for us just to assemble Motors it could be four to six months of training before they're able to do some of our assemblies we're putting something on Mars it can't fail zero defect and many of you flying on 320s want to make sure the 320s get where it wants to go right zero defect so we we spend a lot of time and energy effort in training and developing people so it's quite an investment that the business is making in them like most businesses around the time of the pandemic we I don't think there was anyone who didn't have something to deal with um our priority was keeping our employees safe and healthy at the time so we implemented protective measures overnight I was very proud to see how our team quickly adapted I mean we were distancing and finding ways to work extended hours to keep our business going um the amazing thing about esops is that everybody is all hands on deck when you have a problem and that is the best thing for a CEO I can tell you that you sleep better at night because you're not the only one thinking about the issue you've got your entire Workforce because they're co-owners with you helping you to solve that problem and so we worked really well during the pandemic we never closed our doors we kept business going um and one thing I have to also admit that during the pandemic when we were having shortages in grocery stores we were buying supplies for our employees shortage supplies that you would normally not get in the grocery stores such as toilet paper because we could buy it in bulk we bought it for them we bought cleaning supplies and and so on and distributed it among our employees and it's because you're such a family you take care of each other you you do what's best to keep everybody going we spent um quite a bit of time during the pandemic in the downtime training and developing and While others in the space were laying off taking pay cuts um and hiring freezes we were hiring for talent we wanted to keep all our people because we know the investment that we had made in them and we also knew that when the business came roaring back we would need every single one of them and so whatever emergency funds we had set aside for rainy day it was certainly raining then we had to use it so we used our emergency funds to keep all our people employed and um interestingly a lot of our employees really appreciated the fact that they were not worried about being laid off during a downtime and I heard that message repeated many times across other esops this is how they operate they think about how to hold everything together during the tough times do you have a sense of to what extent you know being in ESOP helped you kind of counterbalance the the great resignation movement you know people who just kind of after kovid were like well this kind of just changed my whole view on work well I believe that impact did a lot of businesses across across our space but we had less of that I I think certainly we had people who made decisions for themselves and their families but we have also had what we call the boomerang employees so those who did make the decision two years ago are actually coming back today into the workforce and what a great thing what a great proposition for employees when you talk about um being the high engagement culture that we have the fact that we really do behave like a family people are looking for that purpose they're looking for that sense of belonging where they work um and so we found that it worked for us to attract Talent even during a very difficult time and that kind of tease up I wanted something I wanted to ask Heather which is the kind of intangible culture issue I mean what have you observed about how uh you know employee ownership affects a company culture for me for you've had it yeah yeah so yeah I'm sorry I'm happy to no I think uh you hit it on the nose but one of the things I think is really important in this discussion is simply be plugging in an ESOP does not mean you have an employee ownership culture and so these participative Management systems that we all use is really really important for that so you become an ESOP you do the transaction the owner is very happy but unless you're actually working on this type of management style where you know it it just I think about the conversation around AI that's going on right now and some people are just freaking out right um if our purpose is to release the human Ingenuity of the people we work with in a participative system all of a sudden that discussion changes because then it's really about how do we make the humans be as Innovative and thoughtful as they are and um and so that cultural element and so the culture is the way I Define it the pattern of attitudes and actions of a given Community it is not the cakes it is not the parties it is not the newsletters it is the interaction between people it's the number of high quality connections it is the business literacy that's held within the company it's the process of releasing Ingenuity so you get um people involved in the value proposition creating it's everybody understanding the mission um and their role in that mission of the company and so you can I work with a company in Missouri right now I'm on their board and they're fantastic creating a winning culture everybody know what's knows what winning looks like they know what the value proposition is they are galvanized around it it is a transparent financially transparent company and they're employing all of these management practices and I still I met with a CEO of a non-esop company who wants to build a more democratic culture which is great and he said wait a minute so this just means we're going to have to have more meetings I was like no no you're missing the point the meetings serve a more powerful purpose which I'm sure is probably similar where you work at is the meetings aren't just some person up there talking the meetings are about informing people so they can make better choices in their day-to-day jobs it's actually about reducing the bureaucracy in your company so all the processes serve a purpose and that's culture um that's the building of culture and that's the creating of power and I think so I was on the board of a tech firm who served the Department of Defense and when remember the government's shut down before and there was that one when what year was it we were shut down for three or four months it was it was a long time it felt like we had several contracts with the Department of Defense which meant the revenue spigot just got turned off and when the company and the people all leaned in everybody understood what was going on and then you know the government turned the the switch back on and this company was ready to redeploy all of that human Ingenuity immediately and we got more business as a result of working with the Department of Defense because people were ready the Readiness level was there and that was the definition of culture is people really understanding it being committed having those high quality connections understanding whereabout value is created having a strong sense of business literacy and commitment to each other it it all it's it's magical but it takes work and it takes a different kind of leadership style than we typically see so picking up a theme of this could help with resiliency you know of your Workforce it sounds like um and I guess one more uh kind of worker focused question for for Alex um you know business owners have a lot of options when they want to exit but but for those that you know pursue an ESOP conversion I mean how does that usually impact workers at those companies yeah so um you know so there's not one answer there's not one experience I mean we've heard about the you know the the being an ESOP alone is not enough that the that the management and the culture have to change as well and be aligned with the with that framework um and of course he stops are in a multitude of Industries and so the experiences I I think it's important to know that there's not like one outcome here um there are varied outcomes and sometimes esops don't work out at all in in certain instances as it is in in everything in our in our relatively free economy um but you know and Joseph touched on some of this when we look at averages when we look at Trends over time we do see um uh good outcomes for for workers on average um and I think that's the result of a number of factors it's the result of uh it's a result of some tax policy factors that are advantageous it's the results often of the cultural the changes inside some issues are sort of put in the industrial organization bucket about where ideas come from how decisions are made how people feel about how the decisions are made whether they have a voice in the decision making process whether groups can manage themselves or whether as they're more likely to be able to do in an ESOP than in an organization where they don't have skin in the game and they require the additional costs and and bureaucracies of of middle management but what we see are outcomes where workers have you know higher Revenue per employee higher wages on average lower turnover rates um the the retirement benefits um that Joseph was describing earlier um and then the other point and and this is something uh that Heather talked about a number of people talked about Heather included is this this issue around resiliency and that the firms themselves are more stable which is nice for the firm it's nice for the firm's customers it's nice for the firms uh suppliers and it's nice for the workers right it's nice to be in a firm that's not going away it's less likely to be going away um and that gives uh you know not only peace of mind I think but also um uh you know draws workers into being more committed because they feel like they're part of something that is more stable and in fact is more stable got it and I wanted to stick with you as we kind of step back and look at you know the businesses and the economy and society as a whole um I mean just just looking at the companies that go go this way I mean what what do you kind of know about how this affects job creation or any other impacts Beyond resiliency like you were talking about yeah so you know some some work that I've done and some and similar work that others have done have looked at uh what happened to employment during periods of economic shock and so I don't have the data for the for the pandemic um but if we look back further in time what we've seen what we observe um is that there's less volatility in the aggregate for workers in employee-owned firms than there is for the economy overall and that's also true you say well you might say well you know but they're in different Industries than the economy is all maybe it's like leaning towards safer Industries anyway but even if you look within industry you tend to see more uh more employment stability um and for me one of the key reasons why that's nice good um is not only for the workers but and people talked about this earlier is for the broader Community right and so that there's a spillover benefit there's a positive economists would call a positive externality so we'll provide you know the government provides you know a benefit to encourage employee ownership who wins from that well you know the the founder wins the workers win that's nice you know there's a cost to that uh incentive but not only do the the the players inside the business benefit but the positive externality is when the community benefits right it's when the uh sandwich shop across the street you know benefits from the fact that they're selling sandwiches to a company that's less likely to go bankrupt right in the downturn um and those positive benefits are I think um hard to quantify but sort of directionally are relatively easy to observe and that that spillover into the rest of the economy because the entire economy will never be an ESOP right we're not going that way right we shouldn't go that way we're not going that way that shouldn't be the aspiration there are lots of different kinds of business forms the other ones aren't bad there's just a benefit associated with esops and so we want to provide support and and durability to our to our entire local community or our or you might say the entire supply chain um and and across the supply chain there are benefits of having businesses that are esops or within a community there are benefits for that community at large of their being employee ownerships because of that that resilience and the benefits that those workers enjoy so I guess to what extent do those Community benefits kind of impact society as a whole any way you could yeah I mean I think about it I mean there's probably a lot of ways um uh I I think there's one way which is in a macroeconomic business cycle uh framework that when um the economy is hit with a shock um that shock could be a pandemic it could be a um a could be a banking crisis it could be a terrorist attack it could be any type of shock that um has that that hurts our economy and the aggregate um what happens in Washington is Washington deploys policies to try to help bring the economy back right talking earlier about fed policy and you know like the FED gets to work doing its job trying to trying to help stabilize the economy Congo you know we have automatic stabilizers but in in our in our fiscal policies but in addition Congress will get to work to try to help get the economy going again and help people out the more people can help themselves or the more resilient we are um the easier that task becomes right and so we want to have uh businesses that are resilient to shocks and there's evidence I think that esops because there are shocks coming right I don't know when uh don't ask me when don't ask me you know but there are there are there are economic shocks that will come their business cycles that will come and it's nice that those businesses are a little bit more resilient than the average and as we saw during covet it can often just be an ad hoc policy response like the PPP or something and then there's all kind of unknown uh issues that come out of that as as Senator Garden knew very well knows very well um so so Heather uh you you I think you were talking a little bit about some you know recent business successes you've had you know expansion could you talk a little bit about how employees share ownership has affected it has it driven those successes well employee ownership has supercharged our business and in ways um and I'll just give you some examples because I like to speak to specifics um everyone at our company is always looking for ways to to improve continuously improve do a better job uh Drive the business improve the bottom line uh in the last couple of years uh our culture of high engagement and inclusivity meaning everybody gather around how do we attack this problem we've been able to reduce waste significantly rejects remember I said zero defects we can't send a defective part at all out the door and we were able the teams working I'm talking about assemblers on the floor we're able to get together pull their ideas and we've been able to manage our cost of quality all the way down we've cut it more than 50 percent um there are several Improvement initiatives that originate with our employees because they think and act like owners they understand how it impacts the bottom line they understand how it impacts them and you talked earlier Jennifer about the importance of helping everyone understand the part and the role they play I'm CEO owner but I have a machinist who is also owner and if you are leading an employee-owned company and you're afraid of being asked questions it may not be the right place for you because there is what is called distributed leadership so everyone is going to ask you questions about the business and how it's operating and you know we're transparent we share how did we do financially how did that project go why did we lose money or why did we make money and everyone is so interested in knowing that because they know they can do something about it and they own that we've improved our profit margins in such a way that we've quadrupled our profits in the last uh three to four years and we are on a trajectory to double or size by 2025. um I mentioned the the benefits of the ESOP but because we're more profitable they're able to share in the outcome in the near term so in addition to having um Financial Security around their retirement we have quarterly bonuses that are paid out to every single person in our business for hitting their milestones and achieving their goals and that comes out of profits right their their retirement accounts that comes out of profits so they earn really good wages and benefits and we try to stay above Market with those so we we attract the best talent but that is where it really gets exciting when everybody celebrates and we're handing out bonus checks because we did a good job and we did it all together and when we do it together we have a stake in the outcome Heather touched on this a little bit but I'm curious if you could talk more about what is it like to have the workers in closer proximity to ownership I mean is it what are the challenges there what have you observed I concept that we've been introduced used to in that in the book anti-fragile and I think more about it in that context but when we have our cap tables that are very diffuse you know like public companies um they get very abstract and you don't have that connection for no matter what role you're in who are you serving you know when you're an employee owner and in a smaller company or even not even in a smaller company I think employee ownership is interesting because I think it makes the Democratic management more scalable so you can break through that that dunbar's number more effectively to keep a community close together but um that process of keeping people close they're closer to their Community ownership is identifiable we know who we're working for and who we're working with that is really really powerful and when you have a diffuse cap table you might not know who your shareholders are you're definitely not working shoulder to shoulder with them it makes it harder to get that sense of commitment and belonging to really grow something together and so I just you know whether it's small businesses medium businesses the world that we all work in with employee ownership keeping that connection tight is really important and I think about the work that we're doing in Colorado with the Colorado Commission is focusing on you know where we can to try to remove barriers to become employee owned so that we can serve that community so that we can have a better impact and so we can um Preserve in some cases in Colorado especially rural Colorado the economy um there is is really really critical so keeping things close there's there's a lot of benefit challenges there's challenges too because uh I think I'm thinking I'm looking at Chris Mackin right here um for for people online that can't see me but you know we talk about these ideas of balancing rights and responsibilities and you know we want to make sure that people aren't rights driven that there is always the risk and reward and that we're in this together it's not just building like a super happy having parties all the time and I think at New Belgium some people thought like oh you're just a bunch of hippie having beers together every day which was opposite from what was true we were in a ruthlessly competitive market there were problems every day we had to look at the consumer Marketplace all the time and figure out what are people doing what are they going to buy what is the behavioral economics portion of what what are we doing and when you have everybody involved in that but there will be tension around decisions because you are transparent people will disagree and so as a leader it's it's part of keeping that balance of Rights and responsibilities and it's also part of using tension as production productive tension to turn things into better ideas to turn things into better decisions and not to back away from the tension but to lean into it and to use it for the productivity of your company and ultimately for your community and Heather do you have a similar experience with those tensions how did any anecdotes on how you navigate that um I call those healthy conversations they're not you know and we don't have to agree but I think when when a group gets together to solve a problem you want to hear from everyone I guarantee you that the people who are on that line know how to fix the problem far better than I ever could I have attempted to wind a stator and I failed several times they still have my reject ticket to remind me that I fail at it but you know this is where they're experts at that I'm not and so I have to rely on them very often in determining the direction we go and um I'm not so proud as you know that I can't realize that I I need the people that I work with and for and they need me and it's that sense of we are in this together um so yeah you're you're absolutely right Jen you have to be open and willing to share and that's what I have found in the ESOP environment if you're not willing to share if you're not being open probably won't work really well for you got it well Joseph do you want to tie a bow on it for us I mean what what kind of Statistics do you have on you know growth productivity profits you know in comparison to you know uh employee-owned companies versus not employee owned well I I think the the bow I'd like to tie on it is a little different uh we uh with support from the employee ownership Foundation put some questions on the General Social Survey in 2018 right after the election and we asked people uh whether they would like an economy of firms based on employee ownership and uh equal numbers of Republicans and Democrats and independents uh strong numbers in the high 70s were supportive of that Jim Bonham called it a unicorn idea uh but then we asked them and this is actually because we've been talking about research you know looking at the belly button inside employee owned firms and managers and workers but then we asked represent the population would you be more likely to accept a job from an employee-owned firm or a firm with profit sharing than a than a same job but without those characteristics and again a majority would you be willing to shop and buy from from such a firm so I think that there's there's a tremendous gap between broad citizen support for the idea of employee share ownership which goes back to to many of the founders of the American Republic's concerned about having broad-based property ownership there's a gap between broad citizenship support and you know how much we see it happening and I that we're here we are in in in Congress and was great to hear uh the senator and the representative talk about the fact that they're working to close that Gap and there's a reason why they're working to close that Gap because citizens are far more supportive of these ideas uh than uh you know bureaucrats uh and uh the average professional practitioner out there or maybe even the average member of Congress yeah and I think it's telling you there's a few issues where Senator Bernie Sanders Republicans and Joe Biden kind of all work together and you know this was one of the the policies that were you know part of the last big spending bill in December so I think it kind of speaks to that broad-based uh political acceptance um so let's let's look forward let's get into policy a little bit um Heather is there anything else policy makers could do to to support the environment we've been talking about um I I could I could start answering that by just stating we all know nobody gets wealthy from getting a paycheck at least most people don't you get wealthy from owning something and what we're promoting here is allowing employees to own own a piece of their business because in in owning a piece of their business it appreciates over time they're they're generating wealth for themselves and their families so how could um you know I started to make a long list but I boil it down to just support more research and development in this area why we need to build more evidence around the fact that employee ownership models do benefit not just employees their families but the community and the economy we've we've we've already stated that um increased access to funding and financing we heard a little more about that today tax breaks to companies that establish esops or tax credits to businesses that are transferring ownership to employees we need to make it easier for companies to do this it's it's not easy to navigate that landscape today and so we need to we need to do more in that area improve the awareness and education that we have support more programs to inform businesses that this is an option we heard about the silver tsunami that's heading our way a lot of people don't know what to do with their businesses when they retire and what's going to happen and why is why aren't we thinking about transferring that to employees many of them don't even know that there is such an option streamline regulations and that's a big area right but just make it easier and cost effective for uh for for businesses to establish and maintain employee ownership I think I could boil it down in those four thanks and Alex I mean is there anything you want to add on what could be done on the tax front well um I can so on the tech front um you know I I I don't have a suggestion for more tax relief um I mean one could always develop another tax credit and and try to lower the burdens um I think we should embrace the tax framework that exists today um that's not to say that everything is is perfect for in the system um I think it's fair to ask where are the what are the barriers what are the impediments um some of them are you know maybe small knits and Nats from the perspective of someone from the outside but if you're trying to to put together a transaction there could be issues as you said on the regulatory front um and and Senator Cardin spoke to one of those issues which I think is important on valuation um and there there may be there may be others I would also say that not all the solutions come from government and I would say that this conversation is part of the solution um I've never been at a meeting or a conference where are some Executives from C corporations sat down at a table and and hoped for the moment when their colleagues in the audience one day worked at a C corporation right like that's not there's no C corporation advocacy Community right and that's the same thing for Partnerships and that same thing for everything else except in this space where people go out of their way take time out of their day travel tell other people about esops because they hope that they get to have one not that you know I have one I want I'm part of one I want you to be part of one um and that is a big part of the solution and there's a lot of work that goes on in that space um this is part of that work all the answers don't come from the government some of the answers can come from ourselves and I think that um you know that that that that channel should be recognized and and supported as well well with that said I want to look at another part of the government uh at the state level um can you tell us Jen what's happening in Colorado and maybe what you're seeing in other states too on this front yeah I'll focus on Colorado or states in general because I think we know that the States can be Laboratories for policy and so you know looking at this only from a federal perspective isn't going to be enough and so the perspective that we've taken um for those of you who don't know what's going on in Colorado be happy to to brief you during the break but we have an entrepreneurial business person governor who established the commission on employee ownership and then we also have an office of employee ownership inside the office of economic development in international trade and that's really really important and so what we've looked at is growing awareness one and then the second side of it is uh breaking down barriers so one of the barriers for esops in particular that we've seen is the cost of of an ESOP is can be expensive to do that transaction and also the accounting policy around like if we compare and contrast how transactional costs are accounted for in private Equity versus transactional costs are accounted for in esops they're very different worlds and so you know some of this is just boring like Gap who I'm sure there's accountants in here who love Gap I'm sorry if I just offended you but um you know some of these are those transactional issues so what can we do to break down those barriers and so we have a tax credit and a grant to try to help companies that are interested in overcoming those and I think there's a lot of States who are doing similar work of tax credits Grant awareness and and doing that work at the state level and I think that is critically important getting in touch with those economic developers there but I think there's another perhaps overarching issue of institutional trust that's going on in our country and I think you hit on it as the government can't do all the work but ultimately we need policy we need people to look at you know what is our partnership with the Department of Labor how are things in accounting working and the mechanism of financial engineering and we have to do some of that very tedious kind of below the the radar policy work to get this done but more importantly we need to restore our American Trust in institutions and understanding how the systems work so we can get people advocating behind it in general and I think that is something that we can all do at the state level probably in a more powerful way than the federal level right now got it well thank you for that overview I think we have time to take one or two audience questions too if anyone has one do we have a mic owner okay um not necessarily Ken Baker from New Age Industries in the PA CEO and the eox um I've been thinking about the employee ownership and continue process Improvement and I think there's a connection between those two things in the way of actually making the business actually more profitable and I think that should be actually promoted um one other comment to Alex if if we want to improve improve taxes maybe we should tax private Equity the way they should be taxed nudge nudge wink wink yeah Alex why don't you work on that because we we all know that the com some of the competition to employee ownership is private equity and private Equity is not getting taxed the right way um so anyway no no questions just I understand the comment all right well on that note um thank you so much uh for being on this panel um it was really insightful and educational so you get a round of applause for our panelists foreign