There is plenty of data about wealth inequality, focusing on data alone misses a key point: Wealth inequality is about people. It is about people who go to work, pay their bills, meet their responsibilities, contribute to their communities, and pay their taxes—and who, in spite of their best efforts, are prevented from sharing in the wealth they help create.
To understand wealth inequality and the role ESOP companies can play in addressing it, a Kellogg Foundation study sought out ESOP companies and employee owners to interview. The results show that ESOPs can positively address income inequality in two particularly important ways:
- ESOPs that require no income-based contributions protect family budgets and resources—especially since “ESOP accounts are not taxed, and do not count against any asset limits for social services for low income employees who may be eligible.”
- Employee owners at ESOP companies develop financial skills as they work to understand the ESOP structure and participate in companies that help with financial literacy by making corporate financial information transparent. “This can improve opportunities for informed family financial planning and investments,” the report finds.
The findings are important; equally important is the fact that the project provides of how real people benefit from working at ESOP companies.
Read the rest of routine at The ESOP Association Blog.