On April 17, Senator Ben Cardin (D-MD) and Senator Pat Roberts (R-KS) introduced bipartisan legislation based on a survey released by the Employee Benefit Research Institute stating that 28% of Americans worry that they won’t have enough money to retire. According to Cardin and Roberts, Employee Ownership offers a sound solution to this problem.
Far too many Americans are inadequately prepared for retirement. Our legislation is about helping workers save by giving businesses the tools they need to create jobs and promote adequate retirement savings. It will strengthen a structure that promotes employee-ownership and helps workers build secure retirements…
-Senator Ben Cardin
Alex Brill of the American Enterprise Institute and CEO of Matrix Global Advisors, argues that employee stock ownership plans have higher productivity and resilience. The bill introduced by Roberts and Cardin would encourage the formation of S-Corp ESOPs, because this type of ESOP has been particularly successful in terms of longevity, wages, and growth.
S ESOPs have also proven more resilient in the face of economic distress, outperforming other private U.S. employers during the recent recession.
Among the positive impacts of an S ESOP according to Brill are $77 billion in labor income, $246 billion in output, and $27 billion in tax revenue from 1.4 million jobs. More details on the Brill’s research can be found in his study, Macroeconimic Impact of S ESOPs on the U.S. Economy.
More information on the proposed bill, Promotion and Expansion of Private Employee Ownership Act of 2013 (S. 742):