Employee Ownership: The Antidote To Corporate Greed, Union Busting, Outsourcing
(MintPress) – Four hundred employees of Leuken’s grocery, a small family-run grocery chain in Minnesota, are poised to become the new collective owners of the successful grocery chain. Rather than accepting offers of $30 million from private supermarket chains, longtime owner Joe Leuken has decided to retire and sell his grocery stores to his employees in a move that will keep jobs and store profits in the local community.
There are already 11,000 stores owned by employees through stock ownership programs, demonstrating that workers can run profitable businesses through democratic, collective ownership of resources. With union membership on a steady decline across the U.S., collective employee ownership may offer a new vision for the future of American businesses run by workers for the benefits of families and communities.
Leuken’s a model for other companies
“I’m glad he chose this, compared to what he could have done, and its definitely protecting all of us. All of his employees are well protected. It’s a great future to look forward to,” said Maria Savre, one of the 400 new owners of Leuken’s grocery store.
If the 70-year-old former owner had sold his business to a private buyer, the likely string of layoffs and cutbacks would have had a palpable effect on the small city of 13,000. Keeping the stores locally owned, instead of chain owned, will not only guarantee jobs, it will ensure that profits stay in the community.
Leuken, a well respected man in the community, has a history of giving to area charities and supporting local organizations. Although the final sum has not been made public, Leuken and his wife are expected to be paid for their stores over the next five to seven years, as the full transfer of ownership and responsibilities are put into place.
Shares in the company will be given to employees who are over the age of 21 and have worked at one of the three Leuken’s locations for at least one year. Seniority will also dictate the distribution of shares.
“It feels good,” said Leuken. “When you can have employees come up to you with tears in their eyes. I’ll tell you there is no feeling like it in the world.”
While Leuken’s decision may be a first in the small Minnesota town, cooperatives and employee ownership of industry is on the rise across the U.S. According to a 2009 study published by the National Cooperative Business Association, cooperatives in the U.S. account for 2 million jobs, $75 billion in wages and benefits paid and $654 billion in annual revenue.
Employees expect that operations will continue to run smoothly based upon the ethical business ethic Leuken instilled in his workers and the community.
“If you’re an owner of any company, there’s a risk involved,” said Matthew Sconce, director of the south end store. “It’s very difficult to compete with big box stores. What we look at doing is to provide incredible customer service.”
Collectively owned employee businesses remain a relatively small percentage of the overall U.S. economy. However the precipitous decline in union membership across the public and private sectors means that collective ownership may be on the rise as the best way to prevent outsourcing and corporate greed.
Even before the most recent “right-to-work legislation” passed in Michigan earlier this month, union membership stood at just 11 percent in the U.S., compared to the thriving post-war era economy in which more than 30 percent of U.S. labor was unionized.
The problem is compounded by free trade pacts that result in a net loss of jobs to overseas producers using low wage employees or slaves to produce goods for Western markets. The North American Free Trade Agreement (NAFTA), heralded as an opportunity for opening markets and collective economic success, ultimately resulted in a net loss of nearly 700,000 jobs, according to a study by the Economic Policy Institute.
Employee ownership: overcoming corporate greed
Collectivization often conjures up hysterical visions of dystopic Maoist farming collectives. In reality, the cooperative model remains a viable way for a company to remain profitable and accountable to both employees and customers. The unregulated, non-unionized private sector offers a grim vision of the rampant greed across the top corporations in the U.S. today.
According to an AFL-CIO corporate paywatch report published in April, the average CEO of a fortune 500 company now earns 380 times an average employee’s salary, a figure that shows the growing gap between workers — the true producers of corporate profits — and CEOs — the parasitic group of managers plundering the profits at the expense of workers’ wages and benefits.
For example, Michael T. Duke, the CEO of Wal-Mart, earned more than $18 million in 2012 while 80 percent Wal-Mart employees are forced to use food stamps to feed their families. With no bargaining power, the upper echelon of management will continue to extract the vast majority of profits to the detriment of millions of workers.
Even during the recovery following the 2008 financial crisis, when many corporations laid off workers and cut benefits, CEO salaries of fortune 500 companies rose 13.9 percent in 2011 and 22.8 percent in 2010.
Although there are benevolent CEOs and management like Joe Leuken, the prevailing modus operandi of business is one of runaway greed. Employee ownership and collective management are the few ways to create a horizontal leadership structure and a more equitable pay scale.
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