Employee ownership in America: the equity solution.

• Author: Krause, Kitry

Employee Ownership in America: The Equity Solution.

Employee Ownership in America: The Equity Solution. Corey Rosen, Katherine J. Klein, Karen M. Young. Lexington, $19.95. "The problem with capitalism is that there aren't enough capitalists,' Senator Russell Long once said. The shortage, say the authors of Employee Ownership in America, reflects only a lack of opportunity. Given the chance to own at least part of the company for which they work, most employees say the best part of helping to run the show is the chance to make more money.

This finding contradicts the prevailing theory that participation in decision-making and improving the quality of work life are the keys to employee satisfaction and commitment. But let's face it, a boring job, no matter how decorated with "input,' is still a boring job, and workers understandably want a little more tangible compensation for the tedium. Nonetheless, the authors are quick to add that without worker participation in management, businesses will not achieve the gains in productivity, growth, and profitability that distinguish the most successful employee-owned companies.

Those companies' stories are often remarkable. For example, employees own one-third of Lowe's Companies, which has grown in only two decades to become the country's largest retail and wholesale hardware chain. Sales per employee are two to three times those of its competitors. A number of workers have retired with stock valued in six figures. W. L. Gore and Associates, maker of the fabric "Gore-Tex,' has no management hierarchy but is growing at 25 percent per year. The lure of that kind of success has not, however, been enough to overcome the reluctance of many companies to share power with their workers. Only when Congress (and some states) made employee-ownership plans more attractive by offering tax advantages in exchange did the idea make boardroom agendas across the country. Those tax breaks are no pittance: the loss to the federal government in 1986 alone will be $2.5 billion. And, indeed, only 7 percent of the companies surveyed for Employee Ownership said they would have set up their employee-ownership plans without the tax breaks. Endorsed by "everyone from Paul Volcker to Tom Hayden, from the New York Stock Exchange to the Teamsters, from Ted Kennedy to Ronald Reagan, and from the Pope to the Chamber of Commerce,' employee-ownership plans, which...