New Survey: Workers at Employee-Owned Businesses Faced Fewer Economic Hardships During the Pandemic
Tuesday, June 15th, 2021
A new survey by John Zogby Strategies on behalf of the Employee-Owned S Corporations of America (ESCA) tells "a tale of two economies" during the pandemic, during which workers at employee-owned S corporations (S ESOPs) report being on significantly more stable financial ground than other U.S. workers. During the COVID emergency, ESOP employees have experienced dramatically less financial adversity, have had more stable jobs and better housing security and retirement savings than their non-ESOP counterparts.
Zogby surveyed a sample of mid- and lower-level employees at employee-owned private companies and a sample of other non-ESOP employees and "found a world of difference between the two groups" in key measures, including:
JOB RETENTION :
- Non-ESOP employees reported experiencing job losses or downsizing at six times the rate of their peers at employee-owned companies.
Non-ESOP workers have been adversely affected by the pandemic economy at more than three times the rate of employees at ESOP companies.
Twice as many non-ESOP respondents as ESOP respondents are concerned about their ability to pay down debt.
Three times as many ESOP employees say they are able to cover an emergency $500expense, compared with their non-ESOP counterparts.
Twice as many ESOP workers expect to retire by the age of 60 compared with workers at non-ESOP companies.
- No ESOP respondents reported being behind on their rent or mortgage, compared to more than 25 percent of their non-ESOP peers.
The findings support decades of research showing that working for a private ESOP company helps American workers be better equipped to weather financial challenges or economic downturns, and that ESOP companies tend to weather economic storms better than other businesses. "Policy-makers would be wise to incentivize the ESOP structure for as many working Americans as possible so that financial strength and independence may be fostered and achieved," Zogby writes in their report. "With a debt crisis looming, the ESOP path may provide a lodestar for weathering such a potential storm."
The findings follow a study released earlier in the year by economist Jared Bernstein, who is now a member of President Biden's White House Council of Economic Advisers, which affirmed the worker benefits of ESOPs. In that study, Dr. Bernstein urged lawmakers to explore ways to encourage the formation of more employee-owned businesses. In a previous study, Bernstein demonstrated that employee ownership helps to close the wage and wealth gap between managers and workers in ESOP-owned companies. And, at a time when many Americans are struggling with job losses, research reveals that job growth among employee-owned S corporations has historically outpaced that of the private sector as a whole.
Demonstrating the continued broad, bipartisan support for employee ownership, Senator Ben Cardin (D-Md.) and Senator Rob Portman (R-Ohio), along with 25 original Senate co-sponsors, recently introduced the "Promotion and Expansion of Private Employee Ownership Act of 2021" in the U.S. Senate. The Senate legislation would help extend the substantial benefits of employee ownership to more Americans.
Since Congress created the S corporation ESOP structure through bipartisan legislation over 20 years ago, more than 3,000 private U.S. companies have become S corporation ESOPs, enabling one million workers to have an ownership stake in the businesses where they work.
- To read the full survey findings by John Zogby Strategies, CLICK HERE.
- To learn more about the Employee-Owned S Corporations of America (ESCA), CLICK HERE.