Both candidates for president — President Obama and Gov. Romney — speak at great length about the immediate need to create more U.S. jobs. In fact, job creation is a central theme for most candidates running for office, whether state, local or Congress.
As an employee-owner at a growing diversified manufacturing firm — Dexter Apache Holdings, Inc. — let me offer a helpful hint about how we can preserve and create those new manufacturing jobs: private employee-ownership.
Throughout the past decade, while many companies were struggling to retain jobs, private companies that were owned by their employees through “ESOPs” helped preserve and in many instances grow jobs. When employees own their businesses, employees have real skin in the game, and this leads to increased company profitability and growth. Recent research shows that employment in ESOP-owned companies rose 20 percent nationally over the past decade, while the U.S. labor market remained generally flat. Employment among a surveyed group of ESOP companies, including manufacturers and other types of businesses, grew an astonishing 60 percent from 2001-11. While employment in the manufacturing industry was trending downward, the ESOP structure buffered manufacturing firms and helped boost growth in many of them.
Dexter Apache, with operations in Wisconsin and Iowa, is one of those employee-owned ESOP corporation businesses where manufacturing employment rose while others fell in the past decade. Despite a tough economy, our business has not only grown by more than 30 percent over the past three years, we have also hired more than 40 new employees. Leer, Inc., a Dexter Apache subsidiary located in New Lisbon, Wis., has been able to provide employees a retirement savings account through their ownership in the business, which is 10 times the benefit they were receiving prior to adopting the ESOP.
A culture of ownership leads to accountability, performance, growth and jobs. Dexter’s employee-owners know theirs isn’t just a job — it’s our present and our future. Operating as a private corporation with an ESOP, we can provide every employee-owner with retirement savings through company contributions of employer stock, at no cost to the worker.
In this new American economic reality, there is a scarcity of good ideas about how to create more manufacturing jobs without taking away from other interests.
The ESOP model offers an exceptional tool for job preservation and creation in the manufacturing sector.