If you work for a company that has an employee share ownership plan (ESOP), you have the option to purchase shares in that company while repaying a loan for your capital assets using future earnings (from dividends instead of your savings account or a second mortgage on your at home) and with dollars before tax (which dramatically speeds up payments). In investment circles, this strategy is known as the use of purchase (abbreviated LBO).
As a result, once the loan is repaid, you will receive two streams of income, one from your salary or earnings and the other from dividends received by your new possession. It either increases your home payment, or allows you to save for retirement, college for kids, or have a rainy day fund in case the crown virus strikes again. In a well-run employee-owned company, ordinary employees often retire with a lot of money in the bank.
Even more up …
So what does employee ownership do for a company? For starters, as all owners, it eliminates conflicts between employees and executives that often undermine the effectiveness of habitually organized companies. You’ve actually teamed up on the ownership side in the book to make traditional conflicts between employees, managers, and owners unreasonable. The absence of conflict tends to strengthen and stabilize the company in the future.
It also democratizes the workplace. It systematically counteracts and hinders concentrated wealth. That is, because employees are also owners, they have the right to comment on how the company works by voting for their shares for representation on the company’s board of directors. In well-run employee-owned companies, you won’t find executives who are paid 300, 400, or 500 times more than the lowest paid employees in the warehouse.
Managers in management are still needed. However, much more involvement in planning, problem solving and decision making by frontline workers than in conventional companies. All this leads to a higher level of mutual respect and greater company profits.
Everyone pays for rapprochement!
And since all owners, financial incentives literally pay everyone to go together, in the same direction, to go to the same goals at the same time. If a company wins, everyone wins, not just the few at the top. And if a company loses, everyone loses, not just those at the bottom. As a result, the efficiency and sustainability of the company (especially in difficult economic times) is maximum, and turnover is predictably reduced.
Although there are about 8,000 employee-owned companies in the U.S. today, with 11 million employee owners, the problem is that they are still a rare exception rather than the rule. Thus, employees of companies that have common property (even those who have stock options) do not have the ability to use future income to repay loans when purchasing capital shares in the company. Even if they were allowed to buy money from their company, they would need access to the funds they needed. And today most workers lack that access.
Moreover, public sector employees such as teachers, police and fire officers, as well as the armed forces remain out of focus. So are women who work hard raising children or caring for elderly parents. That is, most Americans lack a systematic opportunity to participate in the (usually predictable and profitable) part of property in the economy because so many people live on wages to feed their children and pay rent / mortgages. This deprives so many people of the opportunity to benefit from property in our economy. In turn, it also widens the welfare gap that threatens to kill what is left of American democracy.
The $ 4 trillion idea whose time has come
In this light, let’s recognize that the average U.S. economy is growing at $ 4 trillion annually. That means about $ 12,000 annually for every man, woman and child in America. But in general, who benefits from this annual increase? Obviously, those who can afford to buy stocks, real estate bonds, technology, etc. will benefit the most.
Here I want to raise the question: how can we give the ordinary American citizen systematic access to property in the economy? How can the average Joe access this predictable $ 4 trillion growth to get a second stream of investment income while ridding of the fear and instability that so many Americans suffer in today’s incredibly balanced economy?
Paying Americans to Unite …
Consider this. What if the Federal Reserve through local banks issued $ 12,000 annually? assets? It would cost NOTHING to American taxpayers. It does not create public and consumer debt! And instead of creating a currency with government debt, our money will be backed by real, productive private sector assets
And it will not be inflation. All the money created will be secured by the full value of private sector assets that citizens will receive insurance loans to purchase. Citizens are actually buying recently issued full dividends, voting shares of companies that need new capital assets to grow. However, it can give every American citizen equal access to property of the American economy. This will help democratize the free market. In this moment of political division and strife, Americans are literally being paid to unite simultaneously in one direction towards the same goals!
It systematically opposes concentrated wealth!
Over time, every American citizen will accumulate more equity (instead of debt) and benefit from their investment income in a way that only the wealthy can do today. As a result, the need for social safety networking programs supported by federal organizations (e.g., Social Security, Medicare, Medicaid, food stamps) will gradually disappear. More people will be able to pay taxes, which in turn reduces the burden on those among us who still pay taxes. It systematically counteracts / hinders concentrated wealth and democratizes America’s economy!
Today’s crisis would not be a crisis
If the Obama administration had introduced the “Property of Capital” after the 2008 crisis, today’s COVID 19 / Unemployment crisis would not have been a crisis. People could afford to stay home and still have an income to survive a much less severe storm. Trump has the same opportunity today. Let’s see if he really wants to make America great again.
Capital manor in detail
I confess, this comment is a generalized portrait that requires more detailed information. So, for a full and detailed explanation of how this strategy could be outlined, go to the CESJ.ORG website and check out the concept that Dr. Norman Courland calls Capital Homesteading. This is a brilliant idea, whose time is long overdue. And that’s one very good thing that can actually be realized as a result of this horrible COVID 19 crisis.