Eighteen months into the Covid-19 pandemic and recession, Ohio is facing an unprecedented wave of business-owner retirements, precarious conditions for workers, and severe wealth inequality, according to Building Legacies, a recent report released by the Ohio Employee Ownership Center (OEOC) at Kent State University.
The report details these three major economic challenges that Ohio faces and demonstrates how expanding employee ownership is a key strategy to improve the well-being of business owners, workers, and surrounding communities. The report also highlights the recently created Ohio Worker Ownership Network (OWoN) - a network of 10 nonprofits committed to expanding the prevalence of worker ownership in Ohio.
Established in 1987, the OEOC is an outreach center, in our Department of Political Science in the College of Arts and Sciences, founded by the late Political Science Professor John Logue, who sought to combat the negative impacts of de-industrialization in the region, and the state. Since then, the OEOC has helped more than 750 companies explore employee ownership with 110 of those companies becoming partly or wholly employee owned.
In addition to its advocacy and research efforts, the OEOC offers exit planning assistance for business owners, and year-long training and education programs for existing employee-owned companies.
“We work with employee-owned businesses and business owners looking to sell their companies to their employees; this is a strategy that provides the selling owner a fair price for the business, as well as an opportunity to reward the people who helped build the business,” Michael Palmieri, research associate and director of special projects at the OEOC, said. “We focus a lot on how transitions to employee ownership are a win-win-win economic development strategy. Good for workers, good for owners, and good for the community.”
According to the Building Legacies report, employees at worker-owned businesses on average have higher wages and better benefits including retirement accounts that are twice the size of national averages. Worker-owned companies are more profitable and productive, and less likely to close, relocate, or lay off workers during downturns.
The report also states that baby-boomers own 54 percent of businesses in Ohio, and over half of them plan on retiring within the next decade. However, 80 percent of them have no formal succession plan. When put on the market, only 1 in 5 businesses sell.
“There are tons of business owners who are looking to sell who can’t find a buyer and they are overlooking this buyer right in front of them- their employees,” Palmieri said.
Meanwhile, half of workers aged 18-64 earned a median annual income of only $17,950. Poorly paid, insecure employment is growing, and women and people of color are disproportionately represented in low-wage industries. Since 1980, the share of income for the bottom-half of earners has been cut in half, while the top 1 percent of earners share has doubled. By providing stable employment and wealth building opportunities, the report argues that expanding employee ownership can address both issues
The report has received coverage from local news networks and an NPR affiliate station, which is encouraging, but the staff of the OEOC are excited for other reasons. “This report was the product of the hard work of two new employees at the OEOC, both of which are KSU students”, Chris Cooper, director of the OEOC said. Maycie Etling, an intern and student with KSU’s Visual Communications & Design program, designed and formatted the report, and Palmieri, a Political Science PhD candidate, co-authored it.
“My hopes are that the OEOC can continue to raise awareness about employee ownership, not just among the general public, but within Kent State as well. There are many students and professors thinking about the important questions of equity, inequality, and economic and community development. Our goal is to create relationships across the broader KSU community to address these challenges,” Cooper said.
Palmieri and Cooper are interested in engaging more broadly with the KSU community on the topics of employee ownership and community wealth, shared equity, public policy, and economic development.
“Whether it’s a student interested in these areas that needs employment during the school year; faculty with similar interests willing to collaborate on research or needing a guest speaker for a class; or anyone else, we are interested in connecting with them,” Cooper said.
For more information, visit the OEOC web site or contact Michael Palmieri at mpalmie2@kent.edu.