Senator Kirsten Gillibrand and Congresswoman Nydia Velazquez visited the tile-and-stone fabrication company IceStone on Monday at the Brooklyn Navy Yard. The legislators announced that their bill, the Main Street Employee Ownership Act, has passed the House of Representatives.
They urged the Senate to pass the legislation by the end of the year.
The bill supports small businesses seeking to convert into cooperatives or Employee Stock Ownership Plans (ESOPs), in which employees own part of the company where they work.
According to the elected officials, ESOPs and co-ops not only see a 5 percent increase in productivity, buy workers are paid 5 to 12 percent more and have more than twice as much in retirement savings. Working for an employee-owned business also ensures greater job stability, they said.
“At its core, this bill is about empowering workers, giving them a greater stake in the workplace and helping them succeed,” Velazquez said. “In many ways, this legislation is about leveling the playing field.”
The congresswoman said in the United States roughly 10 percent of American families control nearly 80 percent of the country’s jobs. ESOPs and co-ops change that by letting more employees own their companies.
Velazquez also argued that roughly half of the country’s privately held companies are owned and operated by baby boomers. As that generation retires, many business owners are expected to either sell their companies to a larger business or shut down altogether.
More than 2.3 million companies nationwide are owned by people who are at or near retirement, Velazquez said., including 181,370 businesses in New York. Those companies alone employ 1.6 million workers.
When businesses shut down or sell to a larger company, it could result in job losses in local communities.
“This problem could be resolved if employees could purchase the company,” she said. “That takes financing and assistance, which is what our bills will provide.”
Gillibrand said the Main Street Employee Ownership Act would improve access to Small Business Association (SBA) loans for ESOPs and co-ops. The transition into an employee-owned entity is often expensive.
The legislation would also increase SBA’s outreach to the business community, so baby boomer owners know about the option of selling the company to their workers.
Gillibrand said the legislation would make a difference for companies looking to make the leap.
“How do we make sure when people go to work, they feel pride in what they do, are properly rewarded for their time and labor and are actually treated with dignity?” she said. “It’s exactly the kind of thing that employee-ownership can accomplish.”
For Marisol Linda Diaz, president of Brooklyn Stone & Tile, becoming a cooperative changed the company and its employees for the better.
The previous owner, a baby boomer, wanted to retire and close up shop after 30 years in business. The workers got the notice in January.
But Diaz, working with organizations that support the transition into cooperatives, said their company is now in the process of becoming a worker-owned business.
“We put our sweat equity in, came up with a business model,” she said. “We weren’t going to be stopped, we had a vision of what we could become.”
She said she has a strong bond with her team members, who have become like a “second family” for her. They all have the same goal: to become a premiere stone and tile manufacturer.
Brooklyn Stone & Tile has a partnership with IceStone, which operates within the Brooklyn Navy Yard. Diaz said she feels the joy of coming to work and the environment that “feels like home.”
“I have faith we will grow and succeed,” she said. “That wouldn’t have happened without the co-op.”