By All Means, Give Employees the Owner’s Perspective


One subject that seems to intrigue progressives is that of employee-owned business.  Paul Edward Parker recently reported on a panel discussion of the topic in Newport that presents them as almost a no-brainer:

Five panelists at a breakfast gathering organized by Leadership Rhode Island made that argument Friday morning.

The leading arguments:

Employee-owned companies are fairer to workers.

They are more successful.

They are more productive.

In part because employees have a personal stake in the success of the company, employee ownership gives companies an “incredible competitive advantage,” said Paul O’Reilly, president and chief executive of Newport Harbor Group. “The company doesn’t have to be philosophically driven to the redistribution of wealth.”

That all strikes harmonious chords, from my perspective, but it does make me wonder why legislators occasionally submit legislation that would favor this particular arrangement.  If they’re so  superior to more traditional business models, they’ll come to dominate the marketplace.

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The best thing that government can do is get out of the way.  As I frequently argue, barriers to business creation hurt workers.  If a group of employees want to break off and compete with a boss who isn’t running things the way they’d like, let them do so.  And if low-end workers think it’d be a good investment to work for a company that pays below some arbitrary minimum wage, let them do so.  Contrary to the belief of people who manage to get a few thousand people to put a mark next to their names on a piece of paper every couple years, adults can make their own decisions about these things.

If employees are part owners of their workplaces, perhaps they won’t tolerate as much government interference as they do when demagogues are able to stoke us-versus-them flames in the workplace.  Workers with a more-substantial investment in their workplaces will also be less able to up and move, so they’ll have to buckle down and fix Rhode Island’s problems, rather than skip to a more-friendly state… unless they just bring the whole company with them.