Ownership America Applauds the Bipartisan, Bicameral Introduction of the Employee Equity Investment Act
Bipartisan, bicameral legislation introduced in support of expanding employee ownership financing
CAMBRIDGE, Mass., May 17, 2023 /PRNewswire/ -- Ownership America applauds the bipartisan, bicameral introduction of the Employee Equity Investment Act (EEIA), which is expected to significantly accelerate the growth of employee ownership over the next two decades. The EEIA would create an investment facility within the existing SBA Small Business Investment Company (SBIC) program designed to mobilize private investment towards creating, growing, and sustaining employee-owned businesses. The program would operate at no subsidy cost to the taxpayer and would also remove contracting barriers for employee-owned businesses.
Nearly half of all private businesses are owned by individuals who are at or near retirement age, employing over 32 million workers and representing 2.9 million firms. More than half of these small business owners are expected to retire over the next decade–a "silver tsunami" of business succession that risks the loss of local jobs and business investment. The EEIA would enable business owners to more quickly and efficiently sell to their employees through an Employee Stock Ownership Plan (ESOP) or worker cooperative. Research shows that employee-owned businesses outperform their competitors, create and retain high-quality jobs that build over twice the levels of retirement wealth for workers compared to conventional businesses, and lay off fewer workers during economic downturns.
"The Employee Equity Investment Act reflects a bipartisan commitment to building a more competitive, resilient, and broadly prosperous American economy," said Ownership America Founder and Executive Director Jack Moriarty. "We know that employee-owned businesses build generational wealth for their workers and we also know that most business owners want to preserve their legacy and take care of their employees. This legislation will help ensure that the financing is available to make employee ownership a more efficient succession option. We couldn't be more thrilled to have a bicameral, bipartisan bill led by Senators Chris Van Hollen, Marco Rubio, Tammy Baldwin, and Todd Young alongside Representatives Dean Phillips, Blake Moore, Chrissy Houlahan, and Dusty Johnson in addition to original co-sponsors on both sides of the aisle.
"For decades, employee ownership has created thousands of companies that outperform the competition by building high-engagement cultures on a foundation of shared ownership," said Ownership America President and VP of Medical at Web Industries (100% ESOP) Michael Quarrey. "I have personally experienced the power of employee ownership and the role it can play in enabling human flourishing. We are grateful for the bipartisan collaboration of the lead sponsors in addition to a robust coalition of partners who share a commitment to building an economy where everyone has a stake in the outcome."
Thought leaders from across the political spectrum have weighed in on the announcement:
"We are grateful to Sen. Van Hollen, Rep. Phillips, and the other original co-sponsors for their dedicated work with The ESOP Association and others to prepare and introduce this important legislation," said Jim Bonham, President of The ESOP Association. "We appreciate the many considerations that have been made along the way already. Our top two priorities were to make sure that ESOPs have better access to much needed capital but also that the employee owners are protected and in control of their companies. We strongly support this proposal, and will continue working with congressional champions to enact a key policy priority for ESOPs."
"Employee ownership can play a key role in succession planning and wealth creation for women-owned businesses," said Lisa Coppola, National Advocacy Committee Chair of the National Association of Women Business Owners (NAWBO). "The Employee Equity Investment Act (EEIA) will help retiring female owners of successful businesses cleanly exit their business and facilitate their employees becoming owners by removing a primary barrier to financing. NAWBO applauds the bipartisan, bicameral introduction."
"American workers feel disenfranchised and voiceless in the workplace, worried about their retirement security, and anxious about the offshoring of good jobs to other parts of the world, said Chris Griswold, Policy Director at American Compass. "Offering workers a stake in the businesses they work for has immense potential to help address all three problems; unfortunately, capital markets have made opportunities for employee ownership more difficult to come by than they need to be. Senators Rubio, Van Hollen, Young, Baldwin, and their colleagues Representatives Phillips, Moore, Houlahan, Johnson along with the original co-sponsors deserve great credit for stepping up and doing something to fix that."
"Maintaining American economic competitiveness requires steering the financial sector towards investment approaches that advance the national interest. Employee ownership offers a unique opportunity to strengthen business resiliency and preserve domestic productive capacity that may otherwise be lost in the course of business succession," said American Affairs Editor Julius Krein.
"New solutions are needed to address the challenge of retirement security for American workers," said EIG Co-Founder, President & CEO John Lettieri. The Employee Equity Investment Act would create substantial benefits for workers and local economies by making a transition to employee ownership more efficient for small and medium-sized businesses. The Economic Innovation Group (EIG) applauds the introduction of this bipartisan legislation."
"We have an expansive opportunity in the United States to design public policies that bolster financial security and inclusive wealth building. Employee ownership is one of the most promising and scalable ways to do just that, by centering workers in systems of wealth and value creation in order to achieve greater levels of upward mobility and shared prosperity." - Ida Rademacher, Vice President, Aspen Institute and Co-Executive Director, Financial Security Program
"Investing in America's workforce strengthens the entire economy, said U.S. Impact Investing President Fran Seegull. "The U.S. Impact Investing Alliance supports the Employe Equity Investment Act as a new tool to promote private investment in the kinds of small businesses that build resilient communities. Impact investors support employee ownership because it generates sustainable economic opportunities for workers, their families and the communities they live in."
"This bill offers a tremendous opportunity to mobilize capital to build wealth for hard working individual Americans and communities while also generating investment market rate returns for impact investors," said Jim Sorenson, founder of Sorenson Impact Group. "Business ownership is one of the most important avenues of wealth creation that is out of reach for many Americans. Employee Stock Ownership Plans (ESOPs) have long been a way for employees to become owners building wealth in the privately held companies they work for, the small and midsize businesses that make up the backbone of the American economy.
"Employee ownership provides a pathway to build wealth and achieve the American Dream for Asian American and Pacific Islander workers," said National ACE President & CEO Chiling Tong. "The Employee Equity and Investment Act (EEIA) will catalyze employee ownership for business owners who want to do right by their employees by removing a key barrier in the financing process on the pathway to employee ownership. National ACE applauds the bipartisan efforts of the Senate and House sponsors."
The legislation has received overwhelming support. In addition to Ownership America, stakeholders endorsing the EEIA include The ESOP Association, National Cooperative Business Association, Employee-Owned Contractors Roundtable, Small Business Majority, U.S. Impact Investing Alliance, National Association of Women Business Owners, National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE), and Women Impacting Public Policy. A full list of endorsements is available here.
- Read Senator Van Hollen's press release here.
- Read Senator Rubio's press release here.
- A one-page fact sheet on the legislation is available here.
- The full text of the legislation is available here.
About Ownership America
Ownership America is a non-profit public policy organization committed to turning Americans into owners. We operate at the intersection of capital markets and inclusive wealth creation and focus on policies that build equity ownership for U.S. households.
SOURCE Ownership America
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