Buried deep within the National Defense Authorization Act that President Trump signed into law earlier this month is a plan you might not expect to find: one to help small businesses.
When it comes to capitalism, Republicans like it and Democrats like it when everyone gets a piece of the pie. The Main Street Employee Ownership Act, led by Sen. Kirsten Gillibrand (D-NY) is a fair mix of both. It’s a provision in the $717 billion defense bill that gives more support to businesses that share stock or profits with its employees.
“Inequality of wealth is a problem, and there should be more wealth building in our free enterprise system,” said Michael Keeling, president of the ESOP Association, a national trade association promoting the growth of employee ownership in America through Employee Stock Ownership Plans, or ESOPs.
There are two ways to do that: through or employee stock options, or cooperatives. And they can help not only reduce the wage gap, but also create and save jobs in smaller communities, Keeling said.
“Men and women who work in companies with stock ownership, who are employees, are four-to-eight times less likely to be laid off,” said Keeling, citing the most recent General Social Survey, which tracks statistics of workers of ESOP companies.
“Employee-owned businesses have a strong track record of better pay and retirement benefits for workers and a commitment to creating local jobs,” Gillibrand said in a statement.
New York is home to nearly eight percent of the nation’s 2.3 million companies whose owners are at or near retirement age.
The provision not only received bipartisan support here on capitol hill, but it’s received support by the U.S. Small Business Administration, which is primed to lead a national effort in expanding small business employee ownership.
“I think any time that employees have the opportunity to participate in those programs, they feel like they have some skin in the game,” said SBA Administrator Linda McMahon during a stop in Erie, Pa. Thursday.
That bipartisan effort is something both Gillibrand and the Trump administration hope will spur economic growth in towns across the country.
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