Industry Insights

NCEO Releases Groundbreaking Research on Employee Ownership & Economic Well-Being

August 2017
Author:  Angela Fisher

Angela Fisher

Managing Consultant

Consulting

Manufacturing & Distribution

Telecommuting

The National Center for Employee Ownership (NCEO) recently shared the findings from its study, Employee Ownership and Economic Well-Being. Research by NCEO Research Director Nancy Wiefek finds employee ownership improves economic well-being for workers. The study used U.S. Bureau of Labor Statistics data for men and women aged 28 to 34 and found employee-owners have 92 percent higher median household net worth than nonemployee-owners. The research has gone further than any other study by breaking down the sample into small groups and analyzing the effect based on various demographics, including race, marital status, education level and families with young children. Key findings include:

  • Overall, employee-owners in the sample have median wages of $40,000, as opposed to $30,000 for nonemployee-owners. For workers of color, median wages for employee-owners amounted to $35,000, compared to $27,000 for nonemployee-owners. In addition, employee-owner single parents averaged $10,000 more in median wages than nonemployee-owner single parents.
  • Employee-owners have much greater access to other benefits such as health insurance, parental leave and tuition reimbursement. For example, 65 percent of employee-owners reported access to paid parental leave, as opposed to only 31 percent of nonemployee-owners.
  • Employee-owners show a greater sense of job stability than nonemployee-owners. The sample of employee-owners reported a 53 percent longer median job tenure than nonemployee-owners.
  • In 2013, employee-owners had median household income equal to 378 percent of the poverty line. Nonemployee-owners had median household income equal to 293 percent of the poverty line. These two groups nearly had the same median income-to-poverty ratios in 1997.
  • Overall, employee-owners of families with children ages 8 and younger in their household reported 33 percent higher wages from income, 91 percent greater household net worth and median tenure in their current job 44 percent higher than nonemployee-owners of families with children ages 8 and younger.

This study indicates employee ownership has economic benefits across multiple groups of workers, including those without college education, parents of young children, people of color and single mothers. The study’s full results can be found here.

To learn more about employee stock ownership plans, contact your BKD advisor.

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