Every company should be owned by its employees
Every company should be owned by its employees
Central States Manufacturing as a model for employee-ownership.
Sooo... the working class should own the means of production?
Yes, but let's try to achieve that without state ownership of the means.
It's important to consider the conditions in which state ownership was deemed necessary. Countries with a starving and illiterate working class isn't as capable at a true worker owned economy as one that already has a well fed and educated working class. A true socialist society needs basic infrastructure and fulfillment of the basic needs of its people before it can be properly implemented.
Lenin's concept of the Dictatorship of the Proletariat was intended to be a temporary system intended on rapid development and growth of the economy. It was more important to try and stop starvation and establish railroads than build worker co-ops. The mistake was when the leaders that came after decided to never cede power back to the working class.
No, that would be socialism!!1!!! No socialism in 'Murica!!1!!!1!
I work in an esop. It's pretty cool in that we own the company in shares based on tenure, it's not like a union though.
We don't vote on the CEO or the board, we have third party trustees that manage the esop account.
We aren't beholden to external shareholders, which is the absolute best part. Line doesn't go up, it really just affects our retirement accounts, but even then our valuation takes into account stuff like cash on hand and contract stability. So... We have pretty fiscally conservative management, which is a great thing for us.
I work at an ESOP as well. Honestly I'm glad I fell into this. I have a feeling that I may actually be able to retire. If not early. Probably one of my best moves in my career.
This sounds like a worker cooperative which is a classic socialist concept that could be applied to modern social democrat capitalism.
Since I straddle the line in my political views between Marxism and social democracy I'd like to share an approach.
Mandatory profit sharing and workers always have a certain proportion of the board elected democratically. Simple as that. CEO bonuses should be made illegal and all of those profits should be funneled to the workers. People will be a lot more involved in the corporate governance and it will align the will of the workers with that of the shareholders.
Economists say that in the long run productivity is everything and worker's having a for-profit voice that will make arguments like "we're losing our best workers because of low pay" to increase salaries is important. This will make each person higher paid and more productive.
You guys know about Walmart, that one rose to success by profit sharing but capitalism got the better of it and now so many workers both time and money poor because they work there.
While many socialists supported worker coops in the interim, an economy of exclusively worker coops comes more so from the classical laborists such as Proudhon.
I work in consultancy and have a dream of forming a small elite company of consultants, employee owned, just 10 or so people who are shit hot at their jobs.
I would plan for it to always be 10 people, deliberately no growth. Do the job well, take a good wage, have some parties.
It's when companies look for massive growth and shareholder value that everything starts to go to shit.
In 2024, a crack team of management consultants was assembled to solve the toughest business challenges. These consultants promptly escaped from traditional firms to form their own elite unit. Today, still wanted by companies worldwide, they survive as consultants of fortune. If you have a problem, if no one else can help, and if you can find them, maybe you can hire... The C-Team.
[Cue dramatic music]
That's brilliant
Also, my colleagues always tell me I'm c-team standard, this must be what they mean!
I'm up for the C++ team!
just 10 or so people who are shit hot at their jobs.
Why would you want ten competent people when Deloite and McKinsey prove you can make way more money with a thousand incompetent people?
Hey, me too! Except I want growth. I want an army of consultants, all of whom own equal parts of the company. We could charge 3/4 of our competition and still make a ton of income while undercutting the larger, shareholder controlled firms. Someday...
That's the premise of citizen Kane's main character, Kane. It didn't go as he expected.
That movie is like 100 years old.
Balance your workload with care. Once you have "enough" work, hopefully you have other firms you can refer unwanted work to. My small business is run by a guy who A) isn't growing the business and B) says yes to every assignment. He's burning out, I'm burning out, and one of our best people burned out and quit last month. It's a nightmare.
What happens when the other 9 want growth?
WTF is a consultant even?
Then you vote on it and they take over and it turns into a shit company that started out as a good idea, like so many others.
The only reason for growth is if you want to skim the money earned from other people's work.
It's a person who temporarily joins a company, tells everything is wrong, writes that in a piece of paper and moves on to another company.
If their paper happens to say what the CEO thinks then they're invited to come back a couple years later.
Its definitely the dream!
10 is a lot of cats to herd though. Do you already have your fantasy football team ready? Do you think that they share your (lack of) ambition?
At the same time 10 is a small number if a couple go on parental/sick leave at the same time. Are you ready to 'hold the baby' and get no extra credit? Who will do the admin/HR/sales/marketing/taking-the-bins-out/whatever you don't like doing?
10 people is enough that it would be very hard to run in a truly egalitarian way - its your idea, so would you be the 'primus inter pares'? ;-)
Honestly, It could be great - so please see me poking holes as a way to make your plan stronger.
Not the person you responded to but I have a similar plan for a company. The one hole I have a solution for I believe should be adopted by all companies: if it's a job that isn't your core focus, outsource. Everything from bookkeeping to janitorial staff should be an outside company (with your same ethics). I dream of a world where everyone is self-employed or part of small co-ops, and not one single company expands vertically or horizontally. Pick one thing you're good at and do that one thing well. Everything else, give that labor to someone else. I'm looking at you, Amazon.
I guess but it doesn't really solve many problems. Much more importantly, every company should be held to strict standards by a democratic institution of laws.
For examples:
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Both workers rights and pay rates need to be regulated to a bare minimum, because there will always be cases of some people (or groups of people) who try to abuse others and work around the rules. Example: Uber skirts employee benefits by not having "employees", large companies have "subsidiary companies", etc.
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Even if a company of 500 people always look out for themselves and each other, they might still become a detriment to the larger society or hostile towards similar companies.
Having both tight regulatory bodies and strong union/cooperatives are fine, but regulation comes first imo.
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If the original owner can do it better on their own they should go into business for themselves rather than create an LLC, once LLC it should be mutually beneficial, not just there to protect the owners private assets
This was my opinion. Any company that wants to go public should be required to restructure as a cooperative. Stay private means you get to be the man running the show. But the benefits the market gives business also means those business usually impact people at a scale that no individual or handful of individuals should be making decisions especially when those decisions are " increase profits at all costs". Cooperatives bring locals to the decision making and helps regulate some choices that are made at the executive level
How does an Employee Stock Ownership Plan work? How do partners/employees make money with it? When you hold stock, don't you need to sell it/liquidate it in order to make money?
And how do you hire somebody? Do you sell your shares to the person at no cost or something?
I'm confused.
Every year I get shares from my company. The vesting period is typically longer. For me it took 7 years to be fully vested. But I was accumulating every year. When I leave the company, the company will pay out my shares and I can tell them where to put the funds. But the higher base salary I have, the more shares I get. Also the people retiring or leaving the company, the shares get bought back by the company and redistribute to the employees. At least that's how it works at the ESOP I work at. Kinda a simplistic view of it.
When someone is hired, they don't get shares. They are enrolled into the ESOP program. Then after some time, they will eventually start accruing shares on a regular basis.
Think of it like a founder selling their company to their current employees.
Current employees have no money but will if/when their future company does well.
A third party pays the owner now and manages this account.
Once employees retire, they sell their shares to the company, and the company uses that for new employees!
How do partners/employees make money with it?
Sell their stock for money, or stocks owned may pay dividends, or both.
When you hold stock, don't you need to sell it/liquidate it in order to make money?
Yes. But only a small percentage of the employees are retiring and selling their stock at any given time. There are usually limits on how and when employee stock awards can be sold before retirement.
And how do you hire somebody?
The usual way. After hiring, hires receive stock as a part of their compensation.
Do you sell your shares to the person at no cost or something?
It's just part of their compensation. Longer tenure employees end up with more stock earned over time, and may also receive more stock per pay period to reward loyalty.
Implied question: If employees can sell stock won't the company eventually be publicly traded?
There lots of ways the rules for holding the stock can be structured to prevent that, while still having real monetary value to retirees.
It's a bit much for a post here, though. And it varies by country, I think.
Don't take this the wrong way, but this made me bust out laughing...
When you hold stock, don't you need to sell it/liquidate it in order to make money?
Boy, if that isn't just a perfect example of the perversion of our economic system. "You can't make ACTUAL money with it, you can only make money by participating the meta gambling game."
No, stock entitles you to dividends, which is just a fancy way of saying "a share of the profits". Like, a company brings in A amount of money (gross income) in a year, spends B of that on payroll and whatnot (expenses), maybe puts away C of that into a savings or spending account, and everything that's left, D, gets given to the owners. If you have stock in the company, that's you.
Of course, dividends are generally very small (like, think savings interest) compared to what you can make trading and speculating, so it's never good enough for the rich.
It's also rather common for companies to pay no dividends, because they just put all the leftover money into C. Which isn't even necessarily bad, it's generally built on the idea that keeping the money in the company will give the company more room for growth, I.E. raising the stock price, with the assumption that that will be worth more than the dividends may have been. But for so many companies, that just never ends. Sooner or later, the growth won't be sustainable, and many companies just collapse under their own weight, leaving the stock worthless.
No need to be so condescending. I'm very financially literate and I had a similar question - because dividends are so small and rare nowadays that they just didn't cross my mind.
There is a city in Spain called Mondrago. I first heard about it years ago.
The way it was brought up to me was that the people there are happy. And we should also be happy. But why are they happier on average then others.
My favorite part too is that this is capitalism. Its not communism. It isn't socialism. You can bring this to the right wing whoevers and argue that this is a better way.
Intellectually honest people that for whatever reason started out on the center-right can be convinced to support worker coops. The arguments in favor of them are personal responsibility arguments that center-right people tend to favor. I actually posted one such moral argument for worker coops in this community. Here is a link to that post:
I mean collective employee ownership can’t really be considered capitalism. Who are the capitalists in this economy? Everyone? It works very differently.
Generally most proponents of worker-coops are considered market socialists or anarchists, depending on their attitudes toward the state.
That said it can exist within capitalism, though it’s not clear whether capitalism will allow this ownership structure to expand significantly.
So I get the idea that companies shouldn't be slaves to shareholders or the whims of a few people, but would the employees owning the company mean they are shouldering financial risk? Like if my company goes bankrupt I just lose my job, I am not responsible for covering their losses.
I think the liability would still be limited. If a company goes bankrupt it’s not like they’re going after shareholders’ personal assets to pay creditors.
Are you under the impression that private business owners have to cover losses..? Like that’s what a LLC is, a limited liability company. If it goes bankrupt the private owners are only liable for a part of it.
If a private business owners goes bankrupt, he just has to, gasp, find a job.
If a worker loses their job they might go fucking homeless.
There would still be limited liability. Furthermore, they can share risks with investors, and self-insure against risk as well @general
They are. It also means that if the company goes under or starts doing poorly, they'll lose it all.
Imagine if you told people you put half of all your savings into the stock market. "Good job. That can really work for you"
Now imagine telling them you only put it in a single stock, with no diversification, you won't be able to sell until you're 59 1/2 years old, amd when you do sell, you have to spread the sale out over 6 years. "Wut?"
Like the article says. This company is a unicorn. Very few companies end up doing so well compared to the ones that start out. Employees that have been there over 15 years have over a million dollars in the stock options account (article claims). That's of course far from typical of a company structured this way. I'd imagine that if anyone just bought $20,000 of their stock 15 or 20 years ago and left it there until now, they may also have over a million dollars worth by now. You could sell it all whenever you'd like doing it that way.
There are 2 risk reduction strategies commitment-based and diversification based. The diversification-based strategy is the usual spread your eggs across many baskets strategy, but there is also a commitment-based dual strategy where you put your eggs in a few baskets and watch over them carefully.
Workers in coops can share risks with investors with non-voting preferred shares and other financial instruments. They can diversify by investing in other worker coops non-voting shares
Lots of ways to do this. But overall the idea isn't that the only investment you can ever make is in the company you work for. What could happen is some shares are public and the rest are held by employees. Employees would own enough to reserve more power in decision making so that the employees have greater say in direction of the company. It also means private Business can also be private. Just make it so that if any company wants to go public they should be employee owned or similar.
Employees with stock face the same risk as any other stock owners: that the value of the stock will become zero, or just grow poorly.
But they can diversify to reduce their total risk.
this is the least someone should get for devoting their whole life to a company
Combine an ESOP with a Public Benefit or B-corp and you get a pretty spicy variation on how a business can be organized.
By 2030, you will own nothing and be happy!
Please elaborate
DAVOS rich idiot bullshit about a future world where everyone important is a jet setting lease nomad with no personal property that just travels around and stays at airbnbs while having subscriptions to food prep services and clothing replacement services and leases for appliances and devices.
It's like a corporate hellscape version of the Star Trek universe replacing replicators with the bottom 80% of society struggling behind the scenes in gig work jobs to support the careless greed of the ultra wealthy for a pittance, unable to afford the very goods and services they gig work to distribute.
It's the wealthy's wet dream and they have been pushing it in one form or another for 15 years at least.
The fucking dream
Or... What if we just stopped working? https://youtu.be/2i0RrGx_GrE
Haven't watched the video yet, will do somlatwr, but if no one worked, we would over amshort time literally return to the stone age.
Who would make for for all? Would we have to scour for our own food again, each on their own? There is a reason we do farming, it is MUCH more efficient. A hand full people can make grain, beef, flour, and bread for hundreds of thousands, if not millions. It liberates all those other people to work on other things and make society grow.
If we all do our own food then in no time growth will stagnate, loads of people will fail to make their own food and decide to get it from others, and since there is no police anymore either (they're busy making and finding their own food) there is no protection either.
We would to have time to keep up infrastructure. More fertilizer would mean that there wouldn't be enough food produced for everyone, the world would go back to about 2-3billion humans. In on itself not a bad thing, there are too many humans, but 5-6 billion humans starving to death sucks.
No more modern medicine, no ody is working anymore, remember? Sucks to be a diabetic, bye bye. If you're trans, you're outta luck, you got bigger fish to fry.
We CAN'T stop working, we'd die out. If that video means something else, then the title is wrong.
What we can do is redistribute wealth. Nobody should need to work two jobs and still not be able to meet rent, that is absurd.
I also haven't watched the video, but also allow me to weigh in with some stuff I've heard.
The way I've heard it is that if people stopped going to their jobs they would very quickly take up necessary and actually productive work required by them and their communities.
I've heard it more in the context of bullshit jobs. For instance if I didn't have a job to go to then of course I'd pitch in on real work, like working some rows at the local farms, or covering some shifts at the local shops.
This is the Centerpoint strategy for maintaining the Houston electric grid
i want to own a conglomerate that only owns companies that are owned by their employees
Wouldn't you spend like half your day commuting between jobs?
What if there was just a law to cap the compensation in that the highest compensation must be at most 10x (Or whatever a reasonable number may be). If your lowest paid salary is 50k, the max salary for CEO would be 500k. If the CEO wants more money, everyone needs to get more money.
That's what some cooperatives have voted on. Mondragon is an example.
So as with everything I feel like the best solution is to have a system that gives people the incentive to place these restrictions on ourselves rather than force it through laws.
We don't appreciate opinion and perspective enough. We all seem to accept how it is as the default. But if you have a corporation where all employees hold a bit of power collectively as if the business is the sum of all parts, then it would be insane for someone like Musk or Bezos to exist with their wealth. It would be considered stealing
So you now need to buy shares first before you can get any job?
RTFA
Every year, those employees get a percentage of their salaries in company stock. During Central States’ worst year, employees earned the equivalent of 6 percent of their pay in stock, during their best they earned 26 percent. Last year, an employee earning $100,000 a year received $26,000 worth of stock in their account. As the company has grown, the value of that stock has averaged 20 percent returns annually, outperforming the stock market.
Ah, so this example is not transferring equity all the way at once.
no, you just tie share ownership to employment
Usually, in co-operative businesses, the members have to agree to hire someone.
Absolutely not and if you think about the implications, you'd come to the same conclusion.
One of the most successful breweries in America is owned by its employees. New Belgium.
They did not crumble and fall apart because of "evil socialism". They flourished because every single worker had a vested interest in making the business grow.
Executives wonder why their employees are so unmotivated. Give them motivation. Not pizza parties
Employee ownership would save this nation from its spiral towards indentured servitude. 60% of the population currently lives month to month. You're telling me every single one of them is lazy? Bullshit.
The American dream has been stolen from us, it will take it back one way or another.
You can keep sucking on the nuts of billionaires pretending you will be one of them, I will fight for the working class.
With all due respect, one company doesnt proof a thing. Neither do 10 or 100. If it was such a successful business model, there were a lot more.
In the end, most people want to work 9to5, get their salary and not bother with the company anymore than that. Barely anyone would want to partly "own" the company beyond a stock share maybe.
There's a huge cleft between "This one specific brewery" and "every company" though. And honestly I'm neither on expert on company law nor on socioeconomics and market economics, so I'm not one to ask. Maybe it'd be better if every company was employee owned. Or maybe not. Or maybe it would change fuck all. I can't know, not my area of expertise.
And this would not be the kind of global decision you'd want to make on a gut feeling, tbh.
Please elaborate. Co ops already exists. And guild models existed for millenia.
Like what?
Waitrose a giant supermarket chain (and mid upper class too) in the UK also owned by employees. So no I don't really.
We found the CEO, guys.
Okie then temporarily embarrassed billionaire.
Uh.. no. This is exactly how people with that mentality cause companies to find ways to hire less humans and depend more on technologies.
Keep it up, you're only asking for really bad consequences.
"if we keep talking about freedom, our masters will have even more reason to abuse us!"
Coward.
What do you think corporate shareholders expect of a publicly traded company? Especially when in most industries, labor is their number 1 expense?