Our broken inner city economies need a new approach. Our cities are full of hard-working poor people, yet in most communities, holding down a job (or even two) is not enough to get out of poverty. In Oakland, California for example, more than 20% of adults live below the poverty line, and 38% of these adults in poverty hold jobs. Nearly half of Oakland’s working adults earn below the Basic Family Wage, the minimum needed to cover basic living expenses of food, shelter, healthcare, transportation and childcare. For people of color, the situation is even worse, with Black workers in Oakland earning only 60 cents, and Latinx workers earning only 47 cents per dollar earned by Whites.
As baby boomer business owners in the United States retire, our local business landscape is going through a dramatic shift that will further endanger the low-wage jobs that now exist. With boomers owning about half of all privately-held businesses in the U.S., we will see a massive ownership changeover of locally-held businesses as the “Silver Tsunami” of retirement approaches. The vast majority (over 85%) of business owners do not have a succession plan in place, and many find it hard to locate a buyer when they are ready to sell. As a result, some of these companies will quietly close down, a very small percent will be passed on to family members, others will sell to another local owner, and some will be sold to a larger company or out of area buyer. Those in this last category will likely lay off employees, moving ownership and prosperity outside of the local community while escalating unemployment rates for those already barely able to provide for their families.
What can be done?
People who work hard should be paid enough to live with dignity and raise a family, and create opportunity for themselves and their children. Business decisions can be made through a lens of what is good for workers and communities, leading to businesses that are more successful, communities that are more resilient, and workers who have stable jobs and economic security. The “Silver Tsunami” yields an unprecedented opportunity to keep many locally-owned businesses open for the long term and to deepen their positive impact on our local economies. By helping them transition to broad-based employee-owned and cooperative business models, these businesses can stay open–serving their communities, increasing job availability, quality and stability, investing locally, and growing their impact on environmental sustainability.
How Project Equity is meeting the challenge:
Project Equity supports local businesses to transition to broad-based, democratic employee ownership. Project Equity works with qualified business owners who are interested in selling to assess fit with this approach and support the sale of the business to employees. Project Equity also works with a core group of employees to structure employee ownership and create an effective ownership culture. Services include outreach and awareness, feasibility studies, designing a conversion roadmap, helping structure the sale and financing, and providing pre- and post-transition training and support to ensure ongoing success. Project Equity also provides technical assistance and training to partners organizations seeking to replicate this unique approach in their communities nationwide.