There are celebrations across the co-operative sector in the USA, with the passing yesterday of the Main Street Employee Ownership Act. With support from across the political spectrum and championed by Senator Kirsten Gillibrand, this has been signed into law as part of the Fiscal Year 2019 National Defense Authorization Act.
Michael Peck, the inspirational founder of the US ‘1 worker, 1 vote‘ campaign in concert with the Spanish co-operative Mondragón, was one of the advocates for the new law, which will encourage the formation and conversion of firms to employee ownership. A wide range of backers came together – in the American Sustainable Business Council’s “Ownership4All” campaign – to argue for the legislation, which is now being heralded as the biggest breakthrough on worker ownership in the USA for twenty years. The Non-Profit Quarterly describes it as ‘historic’.
Peck comments that “this signed legislation shows how broadened and deepened worker ownership emphasizing self-reliance, profit-seeking bootstrapping, stakeholder & sweat equity & workplace democracy, is fully bipartisan and ‘made in America’.”
The hope is that what can emerge from this is not simply an extension of the Employee Share Ownership models. These offer corporate income tax exemptions but often with relatively weak employee ownership and control. New options, for example, could include tax reliefs for payments of both interest and principal on worker co-operative loans, encouraging more active forms of employee ownership. The legislation should also open up access to loans from the Small Business Administration across the USA.
The moral for the UK and other European countries is to work together in alliances across the political spectrum and across the institutional divides which have held different forms of employee ownership back – from trusts and share ownership schemes through to worker co-ops and new models of freelancer co-ops.
Timed to coincide with the new law, an analysis for the Harvard Business Review, co-authored by Peck, concludes that worker ownership can lead to high performance and innovation. What the USA needs, it concludes, is an increase in worker ownership.
And it looks like it is going to get it.