The COVID-19 pandemic has brought innumerable challenges and setbacks to California’s small businesses. Even prior, businesses were at risk for closure due to the Silver Tsunami of retiring owners. In California, 359,000 businesses are owned by baby boomers nearing retirement age. A majority of business owners in the United States lack a formal success plan, and those who put their businesses up for sale often cannot find a buyer. Without succession plans, these 359,000 businesses could permanently close or be purchased by out-of-state buyers who are likely to relocate or cut jobs.
California’s small businesses can find qualified, experienced owners in their workers. Transitions to worker-led models can keep businesses open while benefiting California workers. Research shows that worker-owned firms have greater job growth and fewer layoffs than traditional firms. They also equip workers with opportunities for wealth-building and a stronger voice in how their workplaces are run.
Now is the time for California to harness the benefits of worker ownership. By supporting the transition of small businesses to worker ownership, the State of California will preserve jobs and businesses, reduce strain on its social safety net, anchor community access to essential goods and services, and cultivate a new generation of worker-owners who have a say in their workplace and share in the profits of their work.