President-Elect Joe Biden has signaled his intentions to promote employee ownership during his administration through the nominations of two vocal proponents of Employee Stock Ownership Plans to critical positions: Marty Walsh for U.S. Secretary of Labor and Isabel Guzman to head the Small Business Administration.
The Menke Group joins the ESOP Association in expressing our strong support for these nominations. With the economy still reeling from the impact of the COVID-19 pandemic and a massive wave of Baby Boomer retirements coming in the next few years, the federal government must promote policies that boost small business resilience and longevity. Both Walsh and Guzman have demonstrated that they understand ESOPs provide both of these essential qualities.
During his tenure as mayor of Boston, Marty Walsh put in significant time and effort to understand ESOPs and promote employee ownership in the city. “The policy goals central to Mayor Walsh’s time in office—including addressing wealth inequality and expanding the pool of business owners—align closely with the strengths of the employee ownership movement,” said Jim Bonham, President and CEO of The ESOP Association.
Isabel Guzman is the current director of California’s Office of the Small Business Advocate, where she has overseen programs to help small businesses grow, compete in an increasingly digital marketplace, and deal with the challenges of the pandemic. As the ESOP Association noted, she has gone on the record with her belief that ESOPs are a powerful and necessary tool to prevent the closure of thousands of small businesses in the coming Silver Tsunami.
With the recent runoff elections in Georgia handing control of the Senate to the Democrats, there is every reason to expect that both of these nominations will be confirmed quickly.
As we have written about previously, ESOPs are one of the few areas where lawmakers on both sides of the aisle have been able to find common ground in recent years. Both parties introduced legislation to promote ESOPs even before the pandemic struck. And with recent studies conclusively showing that ESOPs did a better job than their traditionally-owned counterparts in terms of protecting jobs during COVID era, it is likely that more pro-ESOP policy initiatives are on the way.
We look forward to seeing the steps that Marty Walsh and Isabel Guzman take to encourage the spread of employee ownership, and we will continue to keep you informed to help you make the best decisions possible for the future of your business, your employees, and your legacy.
Menke & Associates, Inc. has helped over 3,500 companies successfully transition to employee ownership. Our holistic ESOP approach enables a positive outcome for the company, its employees and its shareholders. We believe ownership is powerful.
