RALEIGH (December 6, 2016) — North Carolina has the potential to turn a grave challenge into a transformative economic opportunity by converting longstanding businesses into employee-owned companies, in turn saving jobs and empowering communities, a new report finds.
Thousands of businesses could disappear over the coming years as baby boomer entrepreneurs enter retirement, threatening to deal a heavy blow to communities across the state, according to a new report from the Budget & Tax Center, a project of the NC Justice Center. However, companies could keep their doors open by converting into employee-owned companies, giving workers an ownership stake into their economic future and buttressing local economies.
“Instead of watching viable companies disappear when their owners retire, we should focus on ways for employees to take over, saving jobs and keeping businesses locally-owned in the process,” said Patrick McHugh, BTC Economic Analyst and author of the report. “Communities across the country are realizing that employee ownership can make companies more competitive and give workers a controlling interest in their economic future.”
The report finds:
- Converting businesses to employee ownership could save thousands of jobs a year: Company closures have cost North Carolina over 2.2 million jobs since 2000. Saving just 10 percent of the jobs lost to closure since 2010 could have increased employment in North Carolina by 65,000.
- There is a huge pool of potential conversion prospects: Analysis indicates there are over 20,000 businesses in North Carolina with the solid financial footing and track-record of success to be viable prospects for conversion to employee ownership.
- Supporting employee ownership is a bipartisan economic development strategy: Leaders from across the political spectrum have embraced employee ownership as a strategy to save jobs, anchor businesses in their communities, and build family wealth long-term.
- Employee ownership can work in rural and urban communities: Companies that could successfully transition to employee ownership can be found urban and rural communities alike across the state.
- Employee-owned companies are often more competitive and resilient: Employee ownership often helps companies become more productive a post stronger growth. Moreover, employee-owned companies often survive economic recessions without resorting to mass layoffs.
- Employee ownership has great return on economic development resources: Helping companies become employee-owned can be much less expensive than attracting new firms, making it a great potential use of both state and local economic development resources
FOR MORE INFORMATION, CONTACT: Patrick McHugh, Patrick.McHugh@ncjustice.org, 919.856.2183; Mel Umbarger, firstname.lastname@example.org, 919.856.2567.