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Workers Deserve to Be Owners, Too

America is ready to embrace a set of bold proposals to give employees more democracy in their workplaces and a just share of the economy.

Joseph Prezioso/Getty Images

On Sunday, The New York Times ran a story on the Democratic Party’s surging interest in big ideas to revive the economy in the wake of the coronavirus pandemic. Democrats, the Times’ Alexander Burns wrote, now hope to come to Washington in January ready to pass not only new coronavirus relief legislation, but climate and infrastructure bills “far larger than they previously envisioned,” as well as major new health care and worker protection bills. “Discussions are also underway,” he added, “about policies that would ban stock buybacks and compel big corporations to share more of their profits with workers.” The piece goes some way toward filling out the picture offered by last week’s report by New York’s Gabriel Debenedetti that Biden is now “Planning an FDR-Size Presidency.”

If these reports are accurate, all of this is welcome news. Businesses are folding up across the country, and we’re on our way to Depression-level unemployment. Many of those who remain employed in essential industries—workers already made vulnerable by low pay and the suppression of labor unions before the pandemic—are working without hazard pay, protective equipment, or sick leave. By the time the economy recovers, they and even many Americans better off than them will have seen much of whatever wealth they had accumulated destroyed by the crisis, just as it was in the last recession. Social welfare policy and worker protections can help ameliorate the situation, but anyone truly serious about remaking the American economy should examine an even bolder set of policy solutions.

Again, consider the situation now facing essential workers at our supermarkets, delivery warehouses, food production facilities, and elsewhere. In these places, employees are being commanded, in many cases, to work in unsafe conditions for a pittance. It would be ideal if those workers were able to do some commanding themselves. With a real say in how their companies and workplaces are run, those workers could ensure the provision of gloves, hand sanitizer, masks, sick leave, and hazard pay on their own without having to beg or protest.

Early in the pandemic, General Electric workers in multiple states staged walkouts and protests to demand the use of their plants and labor for the production of ventilators. “Instead of laying workers off,” Carl Kennebrew of the Industrial Division of the Communications Workers of America said in an April press release, “GE should be stepping up to the plate with us to build the ventilators this country needs.” But what if workers at those plants had positions of real authority at the bodies within the company where such things are decided? What if those workers, in some meaningful sense, actually owned and ran GE to begin with?

These are questions the proponents of workplace democracy and worker ownership invite us to ask, and there’s a broad range of policy ideas in this realm for Democrats to take a stab at once we’re through the current crisis: from co-determination plans, which mandate worker representation on corporate boards, to initiatives encouraging the creation of worker cooperatives, and even proposals that would make major companies grant part ownership to their employees. These policies could give American workers not only an unprecedented level of control over their economic lives but also a much larger share of the wealth this country produces. Mandating that companies transfer stock to their employees, for instance, would give those workers the voting rights, equity, and dividends from profits now enjoyed by wealthy investors, who own the vast majority of stock in this country.

On paper, the above proposals would cost the federal government little or even nothing. In a 2017 op-ed for The New York Times, Matt Bruenig of the People’s Policy Project offered another idea—having the government create and invest in a social wealth fund that “would gradually come to own a substantial and diverse portfolio of stocks, bonds and real estate.”

“The investment return that the fund generates would be paid out to each citizen in the form of a universal basic dividend, and the shares would be non-transferable to preserve the institution’s egalitarian purpose,” he wrote. “The net result of such a system would be to gradually transform private wealth, which is very unevenly distributed, into public wealth that every person in society owns an equal part of.”

As Bruenig explained in a 2018 paper, similar funds have been implemented in Sweden, Norway, and, on a smaller scale, places here and there within this country, including Alaska, where the Alaska Permanent Fund has been paying dividends to residents for decades. In 2017, it contained around $60 billion in assets and paid $1,100 each to over 600,000 people. Nationally, that kind of supplementary income could make a stabilizing difference in the economic downturn we’re facing and would bolster the financial security of workers and their families even in the best of times.

The concept of a social wealth fund is already mainstream enough that Hillary Clinton considered running on one during her 2016 campaign, and she explained the idea in her recent memoir. “Once you capitalize the fund, you can provide every American with a modest basic income every year,” she wrote. “Besides cash in people’s pockets, it would also be a way of making every American feel more connected to our country and to one another—part of something bigger than ourselves.” It went unmentioned in this year’s Democratic primary, but other proposals to expand the wealth and economic power of American workers were put forward. Bernie Sanders offered a plan that would have granted employees 45 percent of the board seats and 20 percent ownership at every publicly traded company and every corporation with at least $100 million in revenue or on its balance sheet. Elizabeth Warren, the first candidate to put out a co-determination plan, proposed having employees control 40 percent of the board seats at all companies with at least $1 billion in revenue.

There’s early evidence to suggest these proposals would be popular with the American people if Democrats leaned into them. Polling from YouGov commissioned by the think tank the Democracy Collaborative last year found that a majority of registered voters would support the creation of a federal social wealth fund, policies incentivizing the voluntary transfer of ownership stakes to employees, and even making companies with more than 250 employees grant those employees half of their stock over time—a proposal more radical than the ownership plan Sanders put forward.

It would likely come as a surprise to many of those voters that these ideas approach the core of what is meant by “democratic socialism,” which is best understood as a project to radically expand worker ownership and the democratic management of firms. “Under capitalism we are supposed to take for granted that a small, largely unaccountable group of corporate executives should make all fundamental decisions about the management of a company comprised of thousands of people,” a 2016 strategy document from the Democratic Socialists of America reads. “Under democratic socialism, this authoritarian system would be replaced with economic democracy. This simply means that democracy would be expanded beyond the election of political officials to include the democratic management of all businesses by the workers who comprise them and by the communities in which they operate.”

The political opportunities for Democrats brave enough to begin moving in this ideological direction—to begin talking not only about social provision but about structurally empowering workers—are vast. And while simply offering Americans a large serving of welfare spending in the coming years will help us out of the hole we’re in, there is a real chance now to fundamentally rethink and rework the fundamentals of an economy that was already deeply inequitable and unwell. This is, plainly, the next frontier in American public policy and where anyone professing an interest in transforming America post-pandemic ought to begin.