Dr. Janet Boguslaw, a Senior Scientist in the Heller School for Social Policy and Management at Brandeis University, was recently published in a comprehensive book project titled The Future of Building Wealth: Brief Essays on the Best Ideas to Build Wealth—for Everyone led jointly by the Aspen Institute and the Federal Reserve Bank of St. Louis. Her essay “The Untapped Potential of Employee Ownership to Narrow Gender and Racial Wealth Gaps” was one of 63 original essays authored by scholars and thought leaders from across the economic policy community.
The essays explore the latest thinking around how policymakers can help rebuild the balance sheets of American households in the wake of the pandemic, along with a range of proposals designed to generate savings, assets, and financial security for low-wealth families. In his Foreword to the publication James Bullard, President and CEO of the Federal Reserve Bank of St. Louis, posed the following question:
“What does property ownership mean in the 21st century, and how can our nation broaden it for those who own little?” This same question animates the work of Ownership America.
In her essay, Boguslaw makes an explicit link between the wealth-building capabilities of employee ownership and the Biden administration’s priorities to both recover equitably from the pandemic and address racial and gender wealth gaps. Importantly, she makes the case for the federal government to pursue a “systems-level” approach to employee ownership policy rather than the siloing of initiatives in a handful of agencies.
“The time is right to build an integrated complementary policy infrastructure to support employee ownership and deliver on the priority of closing wealth gaps.” Boguslaw provides detail to the argument by proposing three main federal policy opportunities:
- Funding the bipartisan Main Street Employee Ownership Act (MSEO) of 2018, which directed the SBA to remove barriers to employee ownership financing in their flagship 7(a) lending program, and directed the Administration to conduct outreach related to employee ownership through the national Small Business Development Center (SBDC) network.
- The Employee Equity Loan Act, an Ownership America proposal that has recently been renamed to the Employee Equity Investment Act, which aims to use federal loan guarantees to extend employee ownership further into the middle market of the American economy with the recognition that employee ownership should not be limited to the small business sector alone. Boguslaw notes that “such a federal guarantee would also open the door for institutional investors and impact capital to invest profitably in broad-based wealth creation in the workplace.” Such a guarantee program could be administered by the Commerce or Treasury Department.
- Workforce training investments managed by the U.S. Department of Labor under the Workforce Innovation and Opportunity Act. Boguslaw recommends the direction of workforce development dollars “to support skill building and education for ownership to enable firm buyouts.”
Boguslaw emphasizes that “shared ownership must be seen as an important new form of economic development, with all parties benefitting from the production process in equitable and sustainable ways.” Ownership America applauds Dr. Boguslaw for her thought leadership and articulation of the need for any employee ownership strategy to be coordinated and integrated across the federal government.
Other thought leaders in the employee ownership community that participated in the project include Joseph Blasi and Douglas Kruse of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University, who jointly published “Why Profit Sharing is Essential for Building Middle-Class Incomes and Wealth.”
Now that some of the foremost thought leaders in economic policy have turned their attention squarely to wealth and asset ownership, it is up to policy institutions like Ownership America to convert these intellectual “raw materials” into public policy proposals and legislation that can be popularized, passed, and implemented at the state and federal levels.
The book is available for free online at the Aspen Institute website: https://www.aspeninstitute.org/publications/the-future-of-building-wealth-brief-essays-on-the-best-ideas-to-build-wealth-for-everyone/