Do you recall the single word of advice for achieving prosperity that Dustin Hoffman was given in The Graduate? “Plastics.” Well, Chris Mackin has a one-word prescription for public officials looking to reduce economic inequality and increase prosperity: “Assets.” Mackin, who for eight years ran a program for the state of Massachusetts focused on employee ownership, calls assets “a seemingly magical set of resources that work for anyone who owns them.” A powerful way to get assets into the hands of workers is through employee ownership.
A look at the data confirms the power of employee ownership, the dominant form of which is through employee stock ownership plans (ESOP). During the Great Recession, the average job loss for U.S. companies was 12 percent. For ESOP companies, it was only 2.5 percent. ESOP companies grow about 2.5 percent a year faster than the average company, and employees get two and a half times as much in retirement assets as other employees. In 2013, while 7.3 million private-sector workers belonged to unions, more than 12 million were employee-owners.