Guess what: there is a third way that businesses are owned. You know the first two - private ownership and public ownership (via the stock markets). But then there is a third way: worker-owned businesses and, said some academics, their numbers are rising.
“This is a moment for worker-owned businesses,” said Joseph Blasi, a professor at the School of Management at Rutgers University and co-author of The Citizen’s Share: Reducing Inequality in the 21st Century.
“There is a renewed interest in worker ownership,” said Frank Shipper, a professor at the Perdue School of Business at Salisbury University. The core reason: “They are a way to give average people financial security.”
Agreed Ted de Barbieri, an assistant professor of clinical law at Brooklyn Law, “There are reasons to be optimistic about the future of worker cooperatives. They address income inequality and that’s needed.”
Ultimately worker-owned businesses are solidly capitalist. They are about making money. Except in their case the profits accrue to the workers who happen to be owners.
There may be more worker owned businesses than you think. Blasi, for instance, said there are about 400 worker-owned cooperatives in the U.S. - but then there are another 10,000 companies with significant employee ownership via so-called ESOPs (Employee Stock Ownership Plans). All manner of businesses are involved. A tech collective in Somerville, Mass.; a taxi company in Madison, Wis.; a bakery in Petaluma, Calif. are cases in point of worker-owned cooperatives.
As for ESOPs with significant worker ownership, they too cover a range. There’s Publix Super Markets in Florida. W. L. Gore (Goretex) in Delaware. In California, Parsons, the engineering firm, is 100% employee owned through an ESOP.
Many ESOPs, incidentally, are hybrids, with employees owning a chunk, but the rest is owned by others (such as public shareholders).
Just about any business can be configured as worker owned, and a plus is that many of them find that worker ownership is a magnet for new hires. “A lot of workers go to a worker co-op because they are fed up with the other structures,” said Shipper.
You say you’ve had it up to here with working on Maggie’s Farm and want to make this plunge? Not so fast. “They are not utopias,” said Shipper. “People get fired. And they usually are very selective about who comes in.” He added: “They have a no bozos rule. They have to.”
At Harpoon, a Boston craft beer maker that embraced worker ownership via an ESOP in 2014 (employees now own 48%), employee-owner Jessie Cox said that in lots of ways the company - which was founded in 1986 - is still managed much as it has always been. Employees have bosses, they can be fired but, she said, there is one difference: “We all have to make it work. It’s on each of us to be thinking about how the company operates and how it can do things better.”
That is a big shift in embracing employee ownership.