The labor movement's greatest achievement in the 20th century was winning workers a fair share of what they produced within companies they didn't own. Unions negotiated wages, benefits, and working conditions from a position of organized power, and at their peak they delivered broadly shared prosperity to a substantial portion of the American workforce.

That achievement is worth defending and rebuilding. But the long decline in union density, the shift of economic activity toward sectors that have historically been hard to organize, and the growing concentration of wealth in asset ownership rather than wages all point toward a complementary strategy: giving more workers actual ownership of the businesses they work in. That's where the labor movement's next chapter is being written.

The Wealth Gap Is an Ownership Gap

The wealth inequality crisis in the United States is primarily a story about who owns things, not just who earns what. Wages matter, and wage stagnation over the past fifty years has been genuinely damaging. But the acceleration of wealth concentration at the top is driven by returns on capital: rising stock prices, appreciation of real estate and other assets, dividends and capital gains that compound year over year.

Most Americans have almost no ownership of income-producing assets beyond their home, and for renters, not even that. The top 10 percent of households by wealth own roughly 84 percent of all corporate equities and mutual funds. The bottom 50 percent own essentially nothing in financial assets.

Record corporate profits flow to shareholders. Productivity increases flow to shareholders and executives. The worker who generates the improvement takes home the same wage while the person who owns the stock takes home a larger return from the effort.

Wages alone cannot close a gap that is fundamentally about who captures returns on capital. Expanding worker ownership is the mechanism that changes who those returns go to.

What the Research Shows

Worker-owned businesses consistently outperform conventional businesses on the outcomes that matter to the people working in them.

Wages run higher on average than at comparable conventional businesses, and the gap between the highest and lowest earners is compressed because the people setting pay policy are the people receiving it. Job security holds better through downturns: worker-owned firms reduce hours or cut management pay rather than laying off worker-owners, and studies across multiple recessions confirm significantly higher employment stability. ESOP participants retire with substantially larger account balances than comparable workers at non-ESOP companies, according to research by the National Center for Employee Ownership, because the ownership stake compounds over a career in ways that wage increases alone can't match. And workers in cooperative and employee-owned businesses consistently report higher job satisfaction, more control over working conditions, and greater investment in organizational success.

The Ownership Transition Opportunity

The United States is in the middle of a massive business ownership transition. Baby Boomer business owners, who own millions of small and medium-sized businesses, are reaching retirement age. Many want to exit but have no obvious successors. The conventional options are selling to a private equity firm or a competitor, or simply closing.

When private equity buys a business, the outcome for workers is predictable. New owners extract maximum value through cost cutting, fee extraction, and debt loading. Workers lose jobs, benefits get cut, and the business often ends up weakened or closed after the financial engineering runs its course.

Worker ownership is a genuine alternative to that path. A business owner who sells to an ESOP or converts to a worker cooperative gets a fair price for the business they built, their employees keep their jobs and gain an ownership stake, and the business stays in the community rather than being strip-mined by distant investors. Federal tax incentives for ESOP conversions make this financially attractive for sellers. The main barrier is awareness and access to the financing and technical assistance needed to structure the deal.

The Labor Party's platform calls for expanding that support infrastructure: federal grants and low-interest loans for cooperative starts and conversions, a dedicated federal office to provide technical assistance, and bankruptcy law reform that lets workers acquire failing businesses before they close. These are targeted investments with a documented track record of improving worker outcomes.

Beyond the Individual Workplace

Worker ownership at scale does something that individual wage increases or union contracts can't accomplish alone: it changes who accumulates capital over time.

When workers own the businesses they work in, the profits that would otherwise flow to distant shareholders stay with the people doing the work. Those worker-owners build retirement wealth, invest in their communities, and make economic decisions based on their interests as workers and community members rather than as financial speculators maximizing short-term returns.

Germany has demonstrated this at scale. German law requires worker representation on corporate boards at major companies through the codetermination system. German manufacturers, competing in the same global markets as American ones, have maintained higher wages, stronger job security, and more investment in worker training because the people who work in the businesses have real power over the decisions that affect them.

The United States can adapt this principle rather than copying Germany's exact model. Workers having a genuine stake in the enterprises they build produces better outcomes than passive wage employment, and that holds across countries, economic systems, and industries.

The Political Case

There's a political argument for worker ownership that goes beyond economics. The concentrated ownership of productive assets is one of the structural foundations of concentrated political power. The donor class that shapes American politics draws its influence from its economic position.

Distributing ownership more broadly changes that. A society where millions of people own real stakes in the businesses where they work, where worker cooperatives and employee-owned firms are a significant part of the economy, is a society where the interests of ordinary people carry more weight in the decisions that matter.

The Labor Party supports expanding worker ownership because the argument for this party and the argument for worker ownership rest on the same foundation: the people who do the work should have real power over the systems their work sustains.

Learn more at votelabor.org.