KENT, Ohio, Sept. 14, 2021 /PRNewswire/ — 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 toBuilding Legacies, a report released today by the Ohio Worker Ownership Network and the Ohio Employee Ownership Center at Kent State University.
To address these huge economic problems, government bodies at the state and local levels must help retiring business owners sell their companies to their workers, saving jobs and maintaining legacies. A new network of loan funds has launched around the state to support the transition to worker-owned businesses.
3 Daunting Economic Challenges
As detailed in Building Legacies report, Ohio is currently facing 3 key economic challenges:
- Baby-Boomer Business-Owners Set to Retire in Massive Numbers
In Ohio, baby boomers own 54% of businesses, representing 94,000 firms employing 2.6 million workers. Though more than half of these business owners plan to retire in the next decade, 80% do not have a formal succession plan. And, when put on the market, only 1 in 5 businesses actually sell.
- Workers Face Low Wages and Instability
Today half of workers aged 18-64 earn 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.
- Wealth Inequality Spikes to New Highs
Since 1980, the share of income going to the bottom 50% of earners has halved, while the share going to the top 1% has doubled.
The Worker-Ownership Solution
Why embrace the worker-owned business model? Research shows clear advantages compared to conventional companies:
- Employee advantage: Employees at worker-owned businesses have higher wages and better benefits.
- Company advantage: Worker-owned companies are more profitable and productive.
- Community advantage: Worker-owned businesses are less likely to close, relocate, or lay off workers during downturns.
New Funds Support Worker-Ownership
To create a fairer and more resilient economy, loan funds have launched across Ohio to help retiring business owners sell their companies to their workers, thereby building a foundation for sustainable wealth. The following are now offering loans to transition existing businesses to worker ownership:
Building Legacies, the report released today by the Network and the OEOC, details key actions that are needed to support worker ownership in Ohio. State and local governments, and economic development organizations around Ohio—should take the following steps:
- Invest money to assist in the transition of businesses to worker-ownership
- Engage businesses that anchor communities, educating them about succession planning and the worker-ownership option
- Partner with Ohio Worker Ownership Network members to support transitions and give technical assistance
Ohio Worker Ownership Network
In 2020, ten organizations from across Ohio formed the Ohio Worker Ownership Network (OWoN) with the aim of supporting worker-owned businesses. OWoN increases awareness about the benefits of worker-ownership among business owners, economic development agencies, officials, and the public. OWoN also connects stakeholders while offering training and assistance with transitions.
OWoN is composed ofCo-op Cincy, theOhio Employee Ownership Center at Kent State University,Co-op Dayton,The Fund for Employee Ownership,The Center for the Creation of Cooperation,Cleveland Owns, theCFAES Center for Cooperatives at Ohio State University, theJunction Economic Transformation Center,Co-op Columbus, and Co-op Nelsonville.
SOURCE Ohio Employee Ownership Center at Kent State University