Democratization of Wealth in the Term Paper

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ESOPs are becoming increasingly commonplace and many notable corporations participate in ESOP plans. Individuals who work for ESOP companies earn more on average than their non-ESOP counterparts. Their retirement funds are far more attractive too, and the trend in ESOPs is progressively moving toward full ownership rights for employees. Some examples of employee-owned firms include the Appleton paper company in Wisconsin, Reflexite Optics in Connecticut, Western Solutions, and the Gore-Tex corporation, which the author notes has one of the best ESOP plans in the country. One of the reasons why we have witnessed an increase in worker-owned corporations is due to 1974 federal legislation that proffers tax benefits to firms that implement ESOPs. In some cases ESOPs only give workers stock, without enabling ownership rights. An ESOP acts as a trust that receives and holds stock on behalf of the employees (82). Tax incentives have stimulated interest in ESOPs but their proliferation is also testimonial for their effectiveness in improving productivity, worker morale, and community-wide prosperity. Hourly wages are higher for employees in ESOP firms and retirement benefits are as much as three times as high compared with non-ESOP workers. State governments also help firms transition to employee ownership. Ohio, Michigan, and Massachusetts have the strongest programs that offer feasibility studies that help company owners evaluate the feasibility of worker buyouts or aid the transition of a firm into employee ownership.

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Interestingly, employee ownership is a concept that can transcend political party ideology. Democrats and Republicans alike have supported ESOP legislation and have stimulated interest in improving ESOP-related policy. The transition to a self-governing enterprise takes us one step further toward the goal of the Pluralist Commonwealth. A company that is owned by its workers may be the only sensible vision for America in the global marketplace. The author argues that employee ownership is likely to increase over the next several years. Self-governing enterprises are the next step of evolution for the ESOP. A conservative Republican proposed an Employee Ownership Act in 2001, which proposed that 50% of company stock be owned by employees, that 90% of all firm employees be enrolled in the program, and each employee be offered a vote on corporate decisions. The proposal makes sense in light of globalization, because the unbridled pursuit of profit leaves many communities impoverished. If workers owned the firms they work for they would take more pride in their jobs, remain more loyal to their companies, reduce income disparity within the organization as well as….....

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