ESOP

In April, 19 private equity firms committed to providing equity shares to employees at some portfolio firms, as part of the new nonprofit Ownership Works initiative, which has a goal of creating $20 billion in wealth for low- and moderate-income workers over the next decade. Seems like good news. But we urge impact investors to be skeptical. The industry that has done the most damage to job quality and worker security over the last two decades claims to be reversing course. And there will be workers who see a nice hit of cash. But ownership? Not really. What these PE firms are doing falls far short of what authentic employee ownership represents, which is the beginning of a truly democratic economy where ordinary people have more control over their lives, more stability in their work, a fair share in the wealth they create, and the chance to own and control the places where they work.