New Research Details Effects Of Silver Tsunami On Local Washington Economies And What To Do About It
More than half a million jobs and $112 billion in revenue in Washington State at risk over the next 15 years
You can’t have a healthy community without a diverse and resilient local economy, said Mauri Ingram, Whatcom Community Foundation President and CEO.
Project Equity, a nationwide nonprofit dedicated to advancing community economic resiliency, released a report today examining the small business landscape in Washington, and the potential transfer or closure of many of these businesses as baby boomer owners retire over the next 15 years. This data, gathered in partnership with and commissioned by the Whatcom Community Foundation, shows the vulnerability of Washington communities in terms of job and revenue loss as aging business owners, many of whom do not have a succession plan, sell or close their businesses.
The report also highlights the potential for communities to retain business, jobs and the associated revenue by encouraging and facilitating transitions to an employee ownership model. Owners retire well while preserving the legacy of their years of hard work. Employees and communities enjoy the many benefits that come with employee-owned enterprises.
Six of 10 will sell in next decade
This data is part of Project Equity’s national response to the upcoming “Silver Tsunami,” a phrase used to describe the aging of this iconic generation. Report data reveals that baby boomers own almost half of privately-held businesses in Washington State, and 6 out of 10 business owners plan to sell their business in the next decade.
“While some of these businesses — around 15 percent — get passed on to family, and others may sell to a local buyer, many are bought by larger or out-of-state buyers, or shutter their operations entirely,” explains Project Equity co-founder Alison Lingane.
Nationwide, one-third of business owners over 50 say they have had trouble finding a buyer for their business, and only 20 percent of companies listed by a leading business broker sell. In Washington State, more than 570,000 employees work for baby boomer-owned companies that are generating $112.56 billion in sales and more than $20 billion in payroll, showing the profound impact on the state economy should even a fraction close.
Employee ownership model offers several benefits. The data reveal not only the impact that the upcoming ownership transition could have but also the potential to retain businesses in the community through employee ownership strategies.
“Employee-owned companies increase job quality and have a demonstrable positive impact on job creation, and on business retention, says Lingane. “With lower employee turnover, job stability is also dramatically higher.” Research also shows that workers in employee-owned businesses have better pay and benefits, and have higher retirements savings.
Small businesses make up more than 99 percent of the firms in Washington State, and those that are locally-owned circulate three times more money back into the local economy than large national chains. Providing local business owners with strategies and support to convert to employee ownership is one strategy to keep these local businesses thriving and remaining in the community into the future.
“You can’t have a healthy community without a diverse and resilient local economy,” said Mauri Ingram, Whatcom Community Foundation President and CEO. “It’s easier to retain businesses than to start or attract new ones. The Community Foundation is working to ensure that owners and employees who are interested in employee ownership have easy access to the resources they need all along the way.”
In addition to the Whatcom Community Foundation, the Community Foundation of Southwest Washington, Yakima Valley Community Foundation and the Community Foundation of South Puget Sound contributed funding to the Project Equity research. Research results are available at https://www.project-equity.org/impact/regional-initiatives/washington/bellingham/
About Whatcom Community Foundation
Whatcom Community Foundation is focused on amplifying the force of philanthropy by connecting people, ideas and resources so that communities across Whatcom County, Washington flourish. To accomplish their mission, they foster partnerships, put dollars to work through grant-making and impact investing, strengthen nonprofits, help donors make a difference and advocate for equity. Visit http://www.whatcomcf.org.
About Project Equity
Project Equity is an Oakland-based nonprofit that is a national leader in supporting businesses to transition to employee ownership and have partnered with communities as diverse as Lancaster, Pennsylvania, Detroit, Michigan, rural Western North Carolina and the Twin Cities in Minnesota. Visit https://www.project-equity.org.