Ours to Share: How Worker-Ownership Can Change the American Economy

“Ours to Share,” a new report published by the Surdna Foundation, examines worker-owned firms and analyzes their potential to create a productive, stable and equitable economy as compared with traditionally structured firms.

The need for this analysis was made clear by the 2007 recession, when financial volatility in the housing market hit lower- and middle-income workers the hardest and left them vulnerable to loss of employment or home foreclosure. This massive, widespread disruption to the American economy presented an opportunity to consider new methods of reversing rising inequality. Surdna sought out a path to buffer workers from future economic crises while offering them a greater degree of control over their jobs.

“Ours to Share” considers the role that worker-ownership is playing, and has the potential to play, in building momentum toward a future of economic security and recovery in the U.S. and globally. Can worker-cooperatives (co-ops) compete with other firms on productivity? Do they actually promote greater income equality? Are co-op jobs more stable and secure?

Our key findings:

• Co-ops hold great potential to make the U.S. economy more inclusive and equal. The rate of growth for co-ops has greatly increased since 2007, particularly within economically disadvantaged communities, such as immigrants and women. With the right supports and resources, employee stock ownership plans (ESOPs) and co-ops can play a role in addressing inequality and closing the wealth gap.
• ESOPs are efficient and stable. The survival rate of ESOPs is higher through economic downturns than traditionally structured firms. And productivity of ESOPs is as good, if not better, than traditionally structured businesses.
• While worker-ownership is still relatively uncommon in the U.S., the small number of co-ops and ESOPs is not due to the failure of past worker-owned firms. Contrary to conventional wisdom, co-ops do not go out of business more often than traditional companies. The relative lack of co-ops is due instead to limited access to capital and other support infrastructure.
• There are pathways to growth for worker-ownership. Enabling co-ops through legislation as well as infrastructure support makes a big difference in terms of where co-ops form and thrive.
•  Converting to an ESOP or co-op is an increasingly attractive succession plan, particularly for business-owning Baby Boomers.

Tools such as worker-owned coops will allow the creation of a fairer, wealthier and more stable economy for the future, and provide communities with the means to create their own strong local economies.

Please also see Surdna President Phil Henderson’s op-ed “A Simple and Direct Way for Foundations to Tackle Inequality: Promote Worker Co-Ops ” in the Chronicle of Philanthropy.