120 million employee-owners in one generation

We have a moonshot opportunity to make the bottom half richer. Here's how we take it.

May 12, 2025

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This essay is part of my book, We Should Own The Economy, which I am researching in public. Readers can invest in the project and earn a share of the earnings here 👇🏻

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If 120 million workers became owners in the companies they work for, the impact on wealth ownership would be seismic.

As of 2024, the wealthiest 10% of Americans owned 86.6% of stocks and equities (about $53.87 trillion in value) while the bottom half owned only 1% (about $622 billion).1 That means as our economy grows, those with equity in our companies get richer while those who earn salaries from them don’t.

But if most of the working population owned equity in their companies, earning, on average, $100,000 in company shares throughout their careers, that would shift $12 trillion of value from shareholders into worker hands. The wealthiest 10% would go from owning 86.6% of the stocks to 67.3% of them, and the bottom 90% would go from owning 12.8% of stocks to 32% of them.

How equity ownership could shift, assuming $12 trillion in stock value transfers from the top 10% to the bottom 90% over the next 25 years. See footnote 1 for sources.

This would create one of the largest wealth transfers in US history. Wealth held by the bottom 50% would grow 12x, and wealth held by the bottom 90% would nearly double. The wealthiest 10% would still own most of the stock market, but the middle class would own a much healthier share. In one generation, we’d give tens of millions of families a real stake in America’s future prosperity.

We’ve done this before. After WWII, the GI Bill created the greatest middle class in history. Millions of returning veterans bought homes through government-backed zero-down, low-interest mortgages. They became owners of appreciating, income-generating assets for the first time, and their wealth created country-wide prosperity.

We shifted wealth into the hands of the many through home ownership.

We can do it again with business ownership.

Here’s how we take that moonshot and create 120 million worker-owners in the next 25 years:

1. Make employee-ownership the default exit option (creates 30 million+ owners)

About 2.9 million US business owners aged 55+ are expected to retire in the next 10–15 years, creating a once-in-a-generation opportunity to shift ownership of those businesses into the hands of employees, rather than large corporations and private equity firms.

If even 25% of those businesses transition to employee ownership, that's 625,000 new employee-owned companies; and with 20–50 employees on average, that’s 12–31 million new employee-owners. If 50% transition, that's 1.2 million employee-owned companies and up to 62 million employee-owners.

One easy way to do that? Make employee ownership the default exit option for small- to medium-sized businesses.

Steve Storkan, Executive Director at The Employee Ownership Expansion Network, explains it this way: When his daughter was born, he knew he needed a will and life insurance, but he didn’t get either until she was three or four years old. Why? Because it was a hassle. As he tells me: If someone had sat him down at the hospital and said, “Who do you want to be your beneficiary? And which of these life insurance plans do you want?” Storkan would have completed both the day she was born.

A similar strategy gets people to vote and donate their organs. In the US, 40% of voter registrations come through the DMV, as do 90% of registered organ donors. Both are an automatic part of the process when people get their driver’s licenses or government IDs—something nearly everyone in the US has to do when they turn 18. As a result, the DMV is the number one creator of both voters and organ donors.

That’s what it should be like when founders move to sell their companies. Unfortunately, business brokers currently have no reason to mention it. Brokers earn a 5-10% commission on every business sale, which means it’s in their best interest to sell companies for as much money as possible as quickly as possible—even if the founder would earn more selling to employees. (Because founders don’t have to pay as much in taxes if they sell to employees.)

Here’s how that works:

Founders get much richer by selling to employees

Elle Griffin

August 15, 2024

Read full story

The right national incentives could change that, perhaps by offering bonus structures to brokers who complete employee ownership transactions, or by paying them a percentage of the founder’s earnings over the next several years, rather than just the sale earnings up front. Perhaps they could even earn equity in the business, just like employees. As the first person a founder goes to for succession planning, and the one who leads them through the transaction, incentivizing brokers to recommend employee ownership could create millions more employee owners.

2. Turn private equity firms into employee-ownership transition machines (creates 20 million+ owners)

Private equity firms buy up failing companies, restructure them to improve performance—often through extreme cost-cutting measures and layoffs—then sell them at a profit. But Pete Stavros grew up in a working-class family in Chicago and wanted to do something different. His father worked as a construction worker, and despite decades on the job, he never owned any part of the company he helped build. Stavros saw wealth funneling to the top while laborers like his dad couldn’t get cut in on the deal. When Stavros joined KKR, one of the world’s largest and most influential private equity firms, he saw an opportunity.

In 2011, KKR bought CHI, a garage door manufacturing company in Illinois, and instead of cutting employees, Stavros made them owners. Every worker—from factory floor to office worker—received equity in the company and were given financial training so they could understand their stake. The result? The company grew rapidly, employee engagement surged, turnover dropped, safety improved. Employees were motivated to run the company successfully, and they did. When KKR sold CHI in 2022 for $3 billion, workers received an average payout of $175,000, with longtime employees receiving up to $800,000.

Inspired by the company’s success, KKR made equity sharing a standard feature of its US industrials portfolio and Stavros launched Ownership Works to encourage other PE companies to do the same. More than 19 private equity firms have joined the charge, with the goal to implement employee ownership transitions at three companies each year, and “create $20 billion of wealth for working families by 2030.”

Since its 2022 founding, Ownership Works has created 129 employee-owned companies and 217,810 worker-owners, many in industrial sectors where frontline workers have limited access to wealth-building tools. $596 million has already been paid out to workers outside the C-Suite, with more than $8 billion in wealth projected to shift into their hands. And this is just two years into the organization!

In five, ten, and 20 years, many more PE firms will have joined the charge. If eventually 25% of the 3,000 PE deals brokered annually are converted to employee ownership, we’d create 750 new employee-owned companies and 1,050,000 more employee owners each year. That’s up to 25 million employee owners in 25 years!

3. Incentivize large companies to become 10% employee-owned (creates 70 million owners)

If the Amazons or Walmarts of the world became employee-owned, even partially, we’d distribute wealth to millions of working-class Americans.

This is theoretically possible to do. Amazon could create a trust that holds Amazon stock on behalf of employees, gradually purchase shares (with company or external financing), and employees could accrue those shares over time based on their salary or tenure. Unfortunately, it’s much harder for large companies to do (C Corp ESOPs) than it is for small companies (S Corp ESOPs), and that’s because of regulatory hurdles.

Employee Stock Ownership Plans (ESOPs) introduce a level of complexity and risk large companies aren’t willing to take on. They are onerous to manage, prohibitively expensive to implement, and the tax incentives that come with implementation only benefit small business owners. As a result, small companies are incentivized to sell to workers while large companies are incentivized not to.

A few policy changes that incentivize C Corp ESOPs could drastically change that, and this is the goal of the second of Stavros’ nonprofits. Expanding ESOPs aims to make large companies employee-owned, even if only partially. “Imagine if workers owned 10% of every company in the country through an ESOP,” their website says. “With an estimated aggregate value of all corporate equities of $75 trillion, this would imply $7.5 trillion of wealth creation potential for working Americans. Even with only partial adoption, the impact would be enormous.”

This is a huge goal, but with massive benefits if achieved. To make this happen, we’d need to incentivize C Corp ESOPs at the federal level, and we can follow the 401(k) blueprint here. In the US, 710,000 large companies now offer 401(k) accounts, matching retirement contributions for more than 71.5 million employees, even though there is no federal law requiring it. Why? It allows companies to pay employees without paying as much in taxes, while employees can invest pre-tax earnings in the stock market.

It’s a win-win.

As a result, the 401(k) has become widespread. In the early 2000s, companies began auto-enrolling workers unless they opted out, boosting participation from around 50% to 90% in some firms. Today, 401(k)s are a competitive norm—not offering one is a detriment to attracting talent.

One piece of legislation could incentivize employee ownership the same way, providing tax breaks to companies with 10% employee ownership or more. If we reduce the risk and regulatory hurdles in the process, and auto-enroll employees while we’re at it, workers will earn equity in the companies they work for and be incentivized to help them succeed. If in 25 years, the same companies that now offer 401(k)s make 10% of their business employee-owned, we’d create 71.5 million employee owners!

We need to write a new GI bill

Each of the above initiatives could be part of one comprehensive “Employee Equity Act.”

Just like the GI bill incentivized homeownership and shifted wealth into the hands of the middle class, our modern EEA bill could incentivize business ownership, create more owners of equity, and usher in an age of economic prosperity that benefits us all.

It is in our power to create that new bill, and I’m currently writing its first draft as an exercise. I will share it with you in the coming weeks so you can add your notes and feedback, but there are a few more things it needs to be effective. Like: Better funding and exit options, better ownership options at IPO, and ways to ensure that new economic growth is captured by all of us, not just the already wealthy. I’ll be sharing those ideas with you in the coming weeks.

In the meantime, I’d love to know your thoughts and feedback. Feel free to use the comments section for further brainstorming on how we can create more employee-owners. 👇🏻