President Donald Trump's push for corporate tax reform will help America's businesses compete and win. Yet, while business leaders are championing reform, their employees may perceive it as a boon to big businesses, making passage more difficult.
The divide between business and workers has plagued policy solutions in recent years, but that divide has not always seemed insurmountable.
Americans were once proud of our businesses. We loved building, buying, producing, and selling. But today, stagnant wage growth and the decline of legacy industries has erased much of this pride. Last year, the only institution Americans had less confidence in than big business was Congress. Among all employees, less than one-third are engaged at work.
Fortunately, we can restore our pride in our businesses through tax reform that encourages private companies to turn their employees into owners. Ownership in a business gives workers a physical stake in their company, allowing them to benefit directly from their own efforts, and particularly from improvements in competitiveness and performance. Ownership is not profit-sharing or bonuses. It's a true stake in success, and employee stock ownership plans (ESOPs) stand out as a unique model that deliver benefits for both businesses and employees.
And with an ESOP, what's great for business is great for employee owners' job and retirement security. ESOPs provide workers with savings through ownership of company stock. A qualified, defined, contribution employee benefit established in 1974 and expanded to S corporations in the late 1990s, this business model is driving growth for nearly 7,000 companies, boosting the wealth of roughly 14 million employee owners. Rutgers economist Douglas Kruse demonstrated the power of ownership in his research that finds productivity jumps by four to five percent the first year an ESOP is adopted.