Sen. Gillibrand Visits Schenectady Steel Co. To Promote Main Street Employee Ownership Act
New York U.S. Senator Kirsten Gillibrand visited an employee-owned company in Rotterdam Monday, promoting legislation she says would pave the way for more employees to obtain partial ownership of companies they work for.
Gillibrand, a Democrat, spoke at Schenectady Steel Company. "Rewarding work means paying workers enough so that they can actually take care of their families. It means putting on the brakes on companies in the region who want to shut their doors and leave our communities stranded. It means giving hard-working men and women the means to save for retirement, take a vacation once in a while, and get some time off. God forbid when a family member is sick. It means when the owner of a company retires it's not suddenly going to make dozens of people unemployed. And it means making sure everyone in the community who wants to work hard has access to a good job that actually takes care of them. That's what rewarding work means and that's what we need to do now because we urgently need to make changes to the way our economy works if we want the Capital Region to succeed."
Senator Gillibrand is touting "employee stock ownership plans" known as "ESOPS" in her bipartisan "Main Street Employee Ownership Act" as a way to stem the tide of retiring business owners who might otherwise sell or close their companies. "There are thousands of businesses in New York that are owned and run by Baby Boomers who are getting ready to retire over the next few years. How can we guarantee that those companies will keep running and stay local after their business owners retire? Too many workers don't have much of a say over their own well-being because they aren't being treated fairly by their company. How can we make sure that when people go to work they feel pride in what they do, they are properly rewarded for their time and labor, and they're actually treated with dignity. This is exactly what employee ownership can do for us through the use of Employee Stock Ownership Plans or ESOPS and co-ops."
Gillibrand says the bill would provide $500 million in support for ESOP programs through the Small Business Administration, while broadening the SBA’s authority.
Congressman Paul Tonko, a Democrat from the 20th district, added that the focus ought to be on workers and the economy. "And it's important for us to make certain that the work training programs are there. That tax policy that is done in Washington just speaks to the great many of workers in this country. We've failed in that opportunity and we need to have programs like ESOP. If there is a way for Small Business Administration efforts to strengthen ESOP, let's do it."
The House version of Gillibrand's bill has already passed. "Workers in employee-owned companies are paid 5 to 12 percent more and they have over two times more retirement savings than they have in other jobs. They also have greater job stability."
Schenectady Steel President Claudio Zullo: "In 1986, Schenectady Steel became 100 percent employee-owned. So from 1924 to 2018, we are a 94-year-old company, we're gonna be 100 years old in 2024, and that's all been made possible by its employees."
Mayor Gary McCarthy says the Electric City is fortunate to have companies like Schenectady Steel, which he calls "the backbone of the old American economy." "And it shows that we can still be competitive, but we have to have mechanisms which allow these types of businesses to financed. To go through, sometimes generational transfers, and to maintain their position within the market."
Gillibrand says there are more than 2.3 million companies, employing one in six workers nationwide, with owners who are at or near retirement, including an estimated 181,370 businesses in New York employing 1.6 million workers.
- Gillibrand also supports two bipartisan bills that would encourage employee ownership of companies. The Promotion and Expansion of Private Employee Ownership Act would eliminate barriers to establishing new small business ESOPs and ensure that small businesses eligible for SBA programs would remain eligible if the company becomes an ESOP. The Small Business Employee Ownership Promotion Enhancement Act would encourage small businesses to become employee-owned by providing technical assistance to help companies transition ownership to workers through an ESOP. Gillibrand also co-led the United States Employee Ownership Bank Act, which would provide $500 million in federal low-cost loans, loan guarantees, and technical assistance to support ESOPs and worker-owned cooperatives