Why employee ownership was the right choice for America.
What do Independence Day, ESOPs, and fishing have in common? More than you might think.
During the Revolutionary War, the British attempted to wipe out America’s Cod fleet because it was a critical part of our economy and a source of able hands for America’s growing Navy. Those efforts left the industry crippled for years after the last musket was fired in Yorktown.
George Washington, John Adams, Thomas Jefferson, James Madison and Alexander Hamilton, founders of this nation, considered the idea of employee ownership to be the single best economic plan for the republic and thus recommended it for the Cod industry.
The idea was that, instead of the fleet owners reaping all the profits, the entire Cod community from fishermen to engineers and Cod drying operations shared in the success of the industry. The shared ownership inspired and motivated each individual to work harder and work together towards a common goal – ultimately saving the industry.
The Citizen’s Share, written by professors Joseph Blasi, Richard Freeman, and Douglas Kruse, traces the development of employee ownership throughout American history and explains how today’s economy can, and will, benefit from the basic principles of employee ownership and profit sharing. While the book starts with the founding fathers and the foundation of America it quickly gets into explaining why employee ownership is important in modern times.
In one study, conducted in 2000, Blasi, Freeman, and Kruse found that ESOP firms had, “significantly higher sales growth and higher sales per worker” when compared to similar companies without ESOPs.
Today, almost 20 years later, ESOPs are well recognized as having almost exclusively positive effects on a company. Increased motivation, increased productivity, and improved morale and corporate culture are just the tip of the iceberg when it comes to the benefits of ESOPs. ESOP companies even outperformed their peers during the great recession!
Independence Day is a time to reflect on everything that makes this nation special. The ability for employees to own a part of the company they work for is a unique and important part of what makes this country successful.
So, at the end of the day, we must go back to the old adage, “If it ain’t broke don’t fix it.” Employee ownership has been working successfully in the US since the revolutionary war and is poised to continue to perform well today and tomorrow.