ARPA helps economic resiliency through employee ownership
How local communities are using the American Rescue Plan to invest in economic resiliency through employee ownership
When the COVID-19 pandemic hit California in 2020, a solar design and installation company, Cal Solar, was experiencing unprecedented disruption to their business. Like many across the country, the future of their business and the livelihood of its workers were at a breaking point.
Employee ownership is a proven tool to create resilient and thriving businesses, but how can local governments advance employee ownership in their local economy?
How ARPA helps communities unlock the power of employee ownership
The American Rescue Plan (ARPA) is one funding source that local communities are using to unlock the power of employee ownership to support economic resilience and equitable recovery. The American Rescue Plan was launched to provide relief and recovery to workers, families and the American economy in the wake of the COVID-19 pandemic. Within ARPA, State and Local Fiscal Recovery Funds (SLFRF) specifically are charged with supporting a strong, resilient, and equitable recovery and investments that support long-term growth and opportunity.
The City of Tucson is one municipality that sees employee ownership as a strategy for economic resilience and is using APRA funding to bring employee ownership to businesses in Tucson. The City allocated SLFRF funds to provide relief for families, essential and frontline workers, and small businesses. One of their ARPA-funded grants is to Project Equity to advance three goals:
- Understand the data: How many businesses owned by baby boomers are at risk of closing, or of being sold to outside owners who might dismantle the local business?
- Raise awareness: Reach out to businesses regarding succession planning, including the option of transitioning to employee ownership; and
- Educate & support businesses interested in employee ownership: Provide technical assistance for businesses to assess the feasibility of employee ownership and begin the process of an employee ownership transition.
Other cities across the U.S. are also finding innovative ways to support employee ownership. The City of Berkeley, California received national press for their 2019 investment in employee ownership to maintain and strengthen their beloved, legacy businesses. In addition to ARPA funds, communities have tapped into Community Development Block Grant, Workforce Development, and Small Business Administration funds as well as city general revenue and other sources to support employee ownership.
Cities and states across the nation
How ARPA funds for employee ownership can help frontline workers
ASONY’s story is not unique. A 2020 study by the Employee Ownership Foundation and Rutgers University showed that, during COVID business shutdowns, employee-owned firms were four times more likely to retain employees and six times more likely to say they expected to make a full recovery.
How employee ownership supports economic resiliency and growth
Why is employee ownership such a powerful strategy? In The Case for Employee Ownership, Project Equity summarizes research on how employee ownership is a triple win: it benefits businesses, workers, and the community at large.