Thirteen years ago, I was working as a cashier in a candy store. I wasn’t making enough to pay rent so slept in my car in a Walmart parking lot.
It was really tough, I’m not going to lie. I saw no way out of that parking lot. But then I got thrown a lifeline. I landed a temp job separating aluminum and steel scrap at a local manufacturing plant where my grandfather was a production manager.
From Day 1, I sensed something different about the company, AMBAC International, which makes fuel injection systems for heavy-duty commercial and military use. Folks were way more interested in a 20-year-old kid with no clue and no professional skill set than I ever would have imagined. Even though I was just a temp separating scrap metal, they took time to explain the company to me, to take me on the shop floor and show me the ropes.
Power of ESOPs
I put my head down, worked hard and got hired full time. I quickly realized the reason everyone was so invested in me was because they owned the company. That’s right, AMBAC is partly owned by its employees, through an employee stock ownership plan, or ESOP, which provides tax incentives to companies that share ownership with employees. It’s one of about 6,500 ESOP companies in the country, according to the National Center for Employee Ownership.
At most jobs, I would have been trained for my daily duties and that would have been that. But because of the ESOP, my coworkers invested so much time into me becoming stronger professionally. I’m talking about the workers on the shop floor, not just management. I may not have been eligible for the ESOP as a temp worker, but from the minute I started, they saw the connection between my work and their wallets. Everyone wants the company to do better, because when it does, their ESOP accounts grow in value.
I was trained to have a holistic view of the company and how we operate and learned how all the details of everyone’s jobs intertwined. The mentality that everyone is as strong as everyone else from the shop floor up to leadership was drilled into me. My previous experience handling finances was limited to the candy store cash register, but once I started full time, I got comprehensive financial training, sitting with a more tenured employee to learn what each line of the P&L meant and how the daily duties of each employee affected those numbers.
When COVID hit, our business dried up. Many companies were furloughing employees and making layoffs, but we got together and did everything we could to keep everyone working full time, including dropping our landscaping company and buying a lawnmower. Years before COVID, we decided not to take an annual raise and instead put that money into buying new machinery. It was a decision all 52 employees made together because we were lacking in a certain capacity that was harming our bottom line.
The next year, we asked every employee to submit three ideas on how to cut costs. Whether you were sweeping the floors or were the CEO, you had to submit ideas. Some were big and some were small, like printing on the back of papers and stopping free coffee. We used the savings to give folks raises. We also have a thing called succession planning, where you can’t leave a position until someone is ready to take it over. It incentivizes everyone to understand what’s going on companywide.
In my earlier years at AMBAC, I didn’t truly understand how powerful the ESOP was. But as I grew more financially literate, and the balance in my ESOP account grew, it became more apparent. My vendors came in and I’d do a show and tell on our ownership culture and watch their mouths drop. I have an Italian vendor who could not for the life of him wrap his head around what we do here and how big and wonderful it is.
Wealth gap
I started to become an advocate for employee ownership in my workplace and beyond. The big problem with ESOPs is there just aren’t enough of them. The 6,500 ESOP companies in the U.S. account for just a tiny fraction of our businesses, despite many academic studies that show employee ownership builds stronger companies and worker wealth.
Imagine if that number could grow dramatically. Last year, the top 10% owned more than $46 trillion in equities, while the bottom 50% owned less than $500 billion. That’s a gaping and unsustainable wealth gap. And it’s why I was very excited to hear about a new coalition called Expanding ESOPs, which is campaigning to get every employee a slice of ownership in the companies where they work.
I am proud to lend my voice to that effort. In the meantime, I make sure to explain the value of the ESOP to new hires at AMBAC. It’s sometimes hard to get a 20-year-old excited about a retirement benefit, but I use my story to get them to understand the value. One of my more memorable experiences was recently getting the chance to explain to U.S. Labor Department officials how employee ownership changed my life.
And it really has. Thirteen years ago, I was sleeping in a Walmart parking lot. Today, I manage the entire supply chain for AMBAC. I look to the future and know I’m building wealth and will have a secure retirement. I wish that peace of mind for every worker in the country.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Read more:
- Shared company ownership may be the missing path to the American dream
- Why I sold my family’s century-plus-old company to my employees
- America’s working class barely scrapes by. An outdated image of them doesn’t help
- Most American workers want a union—and it may be the only way to save the middle class
