Rutgers analysis finds workers in firms with employee share ownership build greater wealth and they are six times less likely to be laid off
PISCATAWAY, N.J.--(BUSINESS WIRE)--In a rare and overwhelming consensus among Democrats, Republicans, and Independents, nearly three-fourths of respondents in a national survey said they would rather work for an employee-owned company than for shareholders or the government. The Rutgers Institute for the Study of Employee Ownership and Profit Sharing proposed the question for the General Social Survey (GSS) and announced the results today at the ESOP Association National Conference in Washington.
72% of Republicans and 74% of Democrats agree on this: they would rather work for an employee-owned company than for shareholders or the government. That's the key finding of a national survey analyzed by researchers at Rutgers University.
"Americans disagree about a lot of things, but this is not one of them," said Beyster Distinguished Professor Joseph Blasi, Director of the Rutgers Institute for the Study of Employee Ownership and Profit Sharing. "Democrat or Republican, female or male, black or white, union or non-union, a majority of respondents said they prefer to work for a company with employee share ownership. It is rare to find such a national consensus on anything."
The National Opinion Research Center at the University of Chicago administers the GSS to study trends in American society. Blasi, Douglas Kruse (Rutgers), and Richard Freeman (Harvard) designed the original employee share ownership questions that have been asked every four years since 2002. They added several new questions in 2018 to measure the popularity of shares across the political spectrum.
The survey of 1,500 working Americans finds:
- The vast majority of respondents (72 percent) said they prefer to work for an employee-owned company over one owned by investors (19 percent) or the state (9 percent).
- The findings transcended ideological and partisan divides, with 74 percent of Democrats, 72 percent of Republicans, and 67 percent of Independents opting for the employee share ownership model.
- Among respondents who cast a ballot in the 2016 presidential election, 76.5 percent of Trump voters and 75.5 percent of Clinton voters selected employee share ownership.
Given a choice between two similar jobs, 61 percent of respondents said they prefer to work for a company that shares ownership or profits over one that does not.
More than a third of respondents, 38 percent, said they are more likely to purchase goods or services from a firm with employee share ownership. Only 8 percent were less likely to do so.
The survey findings align with recent bipartisan support for employee share ownership on Capitol Hill. In 2018, the Republican chairs and Democratic ranking members of the Senate and House Committees on Small Business co-sponsored the Main Street Employee Ownership Act. Signed by President Trump as part of the national defense bill, the new law makes it easier for retiring business owners to sell to their employees through an Employee Stock Ownership Plan (ESOP) or worker co-op.
The Rutgers analysis of the GSS survey finds 47 percent of private sector employees (59 million) have ownership or profit shares where they work, up from 45 percent (52 million) in 2014. There is some overlap. For instance, nearly 70 percent of workers in an ESOP company also have profit sharing.
While the dollar value is modest for some employees, it can be sizable for many others.
- The average worker who holds company stock has $75,205 in shares.
For ESOPs alone, the average worker has a $134,000 stake.
The average, annual profit sharing and gain sharing bonuses are just over $13,000.
The information/communications industry has the highest concentration of equity and profit shares.
Close to 20 percent of all blue collar, clerical, and sales workers own some company stock.
In addition to enabling workers to build wealth and save for retirement, employee share ownership also brings greater job security. Among workers who spent at least one year in a firm with employee share ownership, 0.6 percent were laid-off in the last year compared to 3.7 percent of workers without employee share ownership.
"Employee share owners are six times less likely to be laid off," said Distinguished Professor Douglas Kruse, Associate Director of the Rutgers Institute for the Study of Employee Ownership and Profit Sharing and former Senior Economist on the White House Council of Economic Advisers. "Employee share ownership may help to stabilize communities and the larger economy by maintaining employment and consumer purchasing power."
The Employee Ownership Foundation, an affiliated foundation of the ESOP Association, contracted with the National Opinion Research Center to administer the survey as part of the GSS. Professors Blasi and Kruse proposed the questions and analyzed the results on a volunteer basis.
As publised by Business Wire.