This week, Sen. Gillibrand’s Main Street Employee Ownership Act become law as part of the National Defense Authorization Act. The law’s passage represents the most significant federal legislation to come out of Congress in two decades to assist small business owners to convert to employee ownership. It is important to note that strong bi-partisan support made its enactment possible. When partisanship is put aside, our elected officials can address the needs of workers, owners, and communities, and help ground our economy in democratic principles that create greater economic prosperity for all.
The legislation was co-sponsored by Sen. Susan Collins (R) Maine, Sen. Ben Cardin (D) Maryland, Sen. Todd Young (R) Indiana, Sen. Cory Booker (D) New Jersey, Sen. James Risch (R) Idaho, and Sen. Jeanne Shaheen (D) New Hampshire. In the House of Representatives, Rep. Nydia Velázquez (D) New York sponsored the companion legislation. This historic legislation can act as a hedge from what has been deemed the Silver Tsunami of retiring Baby Boomer entrepreneurs. As the Nonprofit Quarterly noted last fall, nearly half of US small business owners are baby boomers, aged 53 to 71. Collectively, they own 2.34 million businesses, employ 24.7 million people, and have combined sales of $5.14 trillion. It is estimated that 80 percent of these businesses lack a plan for what they are going to do when their owners retire or, if misfortune falls, die unexpectedly.
According to Steve Dubb’s article just posted at the Nonprofit Quarterly, Loren Rodgers of the Oakland-based nonprofit National Center on Employee Ownership (NCEO) explains, the new law does a few things, including the following:
- Updates SBA’s lending practices to better serve employee-owned businesses.
- Empowers the SBA to assist small business owners in converting their companies to employee ownership through outreach and training programs.
- Directs the SBA to coordinate with funds licensed as SBA Small Business Investment Companies and its microloan program to consider employee ownership as an area for investment and lending.
Sen. Kirsten Gillibrand (D) New York, had this to say:
“Too many hardworking New Yorkers are still struggling to get jobs that pay them enough to take care of their families and save for retirement. I was proud to pass into law my bipartisan bill, the Main Street Employee Ownership Act, to help companies reward work without sacrificing profit,” said U.S. Senator Kirsten Gillibrand. “Employee-owned businesses have a strong track record of better pay and retirement benefits for workers and a commitment to creating local jobs. This legislation is one of the most significant expansions of federal support for employee ownership to pass into law in more than two decades. I will continue to fight as hard as I can to pass more proposals like this into law to reward work and support employee ownership around New York and the country.”
Read Steve Dubb’s article in full