Impact
EO Buyout – Emerging Impact Theme Addressing U.S. Wealth Inequality
America’s Challenge: Income and Wealth Inequality
- 2020 Financial Markets Top 20 Risks (Deutsche Bank’s Chief Economist Nov 2019) #1 Risk – “Continued increase in wealth and income inequality”
- Wealth inequality continues to grow as gains in the economy accrue to the holders of capital rather than providers of labor
- National focus on wages addresses income inequality but does not address the “Wealth Gap” (69% Americans have less than $1,000 in savings)
- 70% of U.S. workers believe they cannot save enough on their own to secure retirement (NIRS)
Momentum in Employee Ownership as a Solution for Wealth Inequality
- Employee Ownership is a way for workers to participate in the value they create at $0 cost to the employee
- Employee Owners have higher levels of income, wealth and benefits than non-employee owners. Relative to non-employee owners, employee owners:
- Have 92% higher median household net wealth;
- Receive 33% higher median income from wages
- Have 2.5x greater retirement accounts
- Have access to a greater array of benefits including flexible work schedules, retirement plans, parental leave, tuition reimbursement and childcare
- Research shows EO companies outperform competition – Productivity improves 4-5% after ESOP is adopted
- Mosaic’s inaugural fund has created 3,000+ employee owners
- Target ESOP account balances of 2-4x annual income in a five-year period
- 90% of Mosaic’s portfolio had not considered an ESOP before meeting Mosaic