Building Workers’ Wealth in Cities and States: State and Local Policies to Support Employee Ownership and Broad-Based Profit-Sharing

Every year, millions of Americans benefit from employee ownership and broad-based profit-sharing plans that ensure workers receive a share of the wealth that they help create. These programs—which reward workers based on a company’s collective performance rather than workers’ individual performance—help raise wages and boost wealth among American workers. Moreover, research shows that broad-based sharing programs support the long-term stability and profitability of local businesses and even do a better job boosting firm-level productivity than does performance pay for individual workers.

As a result of these benefits, city and state policymakers across ideological divides—including the conservative strongholds of Iowa and Nebraska and the progressive bastions of Berkeley, California, and Newark, New Jersey—are increasingly adopting policies to support and expand the use of employee ownership and broad-based profit-sharing. Yet, too few jurisdictions are taking advantage of such programs. Cities and states could do much more to advance the use of all types of profit-sharing plans, which help ensure that workers are able to prosper in the 21st century.

The above excerpt was originally published in Center for American Progress.