Bret Keisling is joined again by Jack Moriarty, co-founder and CEO of Ownership America. In Part 2, Jack discusses the importance of state and community policy initiatives and bipartisan support, how employee ownership organizations can work together to help turn EO into a movement and he shares two EO A-ha Moments.
... or watch the video of Episode 177, below.
Episode 177 Transcript
[00:00:00] Bret Keisling: Welcome to part two of my conversation with Jack Moriarty of Ownership America. This is a continuation of part one, which took place in Episode 176, which we dropped last week. You can find that at www.EsOpPodcast.com or wherever you get your podcasts. It's not necessary to listen to part one before listening to part two, but it might be helpful.
[00:00:22] In part one, Jack gives an overview of Ownership America and talks about the federal initiatives that they hoped to undertake. We then bring the conversation right from the beginning of part two with a state-by-state look. So, you'll definitely follow along, but you might want to circle back beforehand for Episode 176.
[00:00:40] One way or the other, I hope you enjoy this episode.
[00:00:43] Bitsy McCann: Welcome to The EO Podcast with Bret Keisling, part of the EO Podcast Network.
[00:00:56] Bret Keisling: Let's turn to the states a little bit. And I know that a lot of the legislative proposals you would seek transport to the states, and we already work in employee ownership, for example, the tax benefits of being an S-Corp ESOP we'd like states to adopt them. My question is, and I'm thinking about our friends at EOX and Steve Storkan has been on the podcast a number of times, and Steve has talked about how he has built EOX. And it was, first of all, he identified states where he thought there was a need for a state center, but he also said, hey, if you're in a state and you want a state center reach out. So, it is like a hybrid.
[00:01:31] So, my question to you is, how are you identifying which states, how do you prioritize, and how quickly do we hope that your influence is felt in all the states? Is that realistic in three years, five years, ever?
[00:01:46] Jack Moriarty: It's certainly a long-term project and I think what Steve's doing is fabulous because the number one item on any state-level agenda for employee ownership is a state center, right? And so, what Steve's doing of course is setting up brand-new centers. And so, if the Employee Ownership Expansion Network goes into a given state and has that state then, great. Let's try to make that partnership organize and mobilize employee ownership, advocates, so that we can get some state funding for that center. That's one model where we start to grow the technical assistance and the awareness capabilities at the state level. So, I think there's a ton of opportunity for collaboration here.
[00:02:23] I'll also give, I mentioned the Texas ESOP Initiative, that was another, sort of, state-based initiative. And you're seeing, we're seeing out in California, the Worker-Owned Recovery [California (WORC)] Coalition, which is led by Project Equity and Democracy at Work Institute and Certified EO and others.
[00:02:36] We've seen some state-level engagement and what we're trying to do at Ownership America is try to provide a foundation for advocates in other states to not have to reinvent the wheel every time there's a new effort. And, I think, if you look at successful movements, they're networked, they're coordinated. And they're collaborating. They're taking lessons learned from one state, moving them into another and using some of the same systems and tools and processes to move the needle.
[00:03:03] I'll give you an example of work that we're piloting here in Massachusetts in terms of testing out our grassroots mobilization. Massachusetts has a very unique process where we have a statewide ballot initiative process, like about half the states do, but we also have a nonbinding advisory process where you can put a question, an advisory question, on the ballot in a specific state legislative district. And you can do that by capturing, by collecting, a relatively low number of signatures to do that. And once you do that, the question goes on to the ballot in November, in this case in November of 2022, and it is presented to all the voters in that particular legislative district.
[00:03:44] So, we think that's a really exciting opportunity to get employee ownership, for the first time in American history, directly on the ballot. And so, what we've begun to do is target a handful of districts in Massachusetts that either have employee-owned companies already that might have employee owners that would be really interested in this. We had unanimous interest and participation from the ESOP team at Web Industries. So, we're excited to work with other ESOP companies, other co-ops and employee owners, to say, you know what, I know employee ownership has been an important part of my life and what it's meant to me. We need to be telling the message, not only to policy makers, but to the general public.
[00:04:23] We have this question on the ballot that's assessing support for employee ownership and we expect to be very successful as number one, we're going to be recruiting employee owners to really get out in their communities and by virtue of collecting signatures, who better to share the story of employee ownership than an employee owner themselves? And so, that's number one is getting out into the community, having some organizing, some grassroots mobilizing. That's key, right? So, we're building the systems and the materials to sort of be able to equip frontline volunteers to be able to do that.
[00:04:54] Really, really good movements, they're not top-down, they don't do everything with paid staff, right? What they do is they take all of the ingenuity and the talents and the creativity and the personal experiences of advocates and they equip them to go lead in their own communities. And that's what our model is based on. So, we're going to collect signatures. We're going to get on the ballot in a handful of districts in Massachusetts and we expect to do well.
[00:05:20] And once that happens, we can say, hey policymakers, guess what? Look what the voters in your district, look at how they feel about employee ownership. And not only that, you can think of the ballot almost as a mass advertisement to the electorate for employee ownership, right? I had been following politics for years, I had worked in the space from time to time and I had never encountered employee ownership before. If I had seen it on the ballot, I know I would have followed up on it.
[00:05:46] And so think of the awareness value and the outreach value of how many business owners that might be getting ready to sell, they go to the polls and they see employee ownership on the ballot. Huh? That's interesting.
[00:05:58] That's the kind of curiosity we want to inspire. So, we need to get the concept of employee ownership in front of people. We think the ballot is a really great opportunity to do that and it's an exciting opportunity to mobilize employee owners at scale. And the best part about this, Bret, is there's no question that we're in a polarized moment in American politics, right? We know that. But what the evidence suggests is that we are much less polarized on policy than we are on political identities and parties and so forth. If you look at ballot questions in other states, they actually scramble the typical partisan coalition. So, if you look at Florida in 2020, they passed minimum wage by almost two thirds, right? So, clearly a very robust cross-partisan coalition. You look at Missouri and Oklahoma, they passed Medicaid expansion, right? By slim margins, but these are states that are R +25, +30, right?
[00:06:51] And just anecdotally, working on these kinds of question campaigns, it really lowers the temperature, and it really can bring people together that might not agree on anything else. But you say, you know what, this is about the policy and about the question and the content, not about the D or the R next to the name. And so, that I think is an enormously advantageous position for employee ownership to be, and we're excited to start piloting that work in the spring.
[00:07:18] Bret Keisling: I love that, but we also, we have been in that position. What I'm optimistic with you is the mindfulness and the sole purposefulness is of focusing and benefiting from that. I've spoken, I've probably shared this two or three times. I would love to see town hall meetings with politicians from opposite parties, and the example that I gave and it's my own geography, I'm based in central Pennsylvania. I would love a town hall in Baltimore with Republican Senator Pat Toomey, who is conservative for growth guy, and Democrat Ben Cardin of Maryland. And they have this town hall in Baltimore and they can only discuss employee ownership, no other issue! And then they drive an hour and 15 minutes to Harrisburg and they have the same conversation only about employee ownership.
[00:08:05] And then, Jack I'll say, because hope springs eternal in my heart, we put them in the car from Baltimore to Harrisburg for an hour and a half where they can talk about anything else and maybe they'd find one or two other things to get along on. Everybody loves employee ownership once we get past all of the other noise going on. So, you're very much on the right track. Any other state policies or state initiatives you want to chat about?
[00:08:25] Jack Moriarty: Sure. So, we mentioned a state center for employee ownership that's table stakes, but there are a number of other opportunities to move the needle on policy at the state level. And so, other components of the state policy agenda could be allowing professional corporations to be owned by ESOPs and creating tax credits for feasibility assessments for employee ownership, conversions. We've seen that in Iowa. And, of course, we've seen all the great work in Colorado, right? Setting up a commission, putting together some funding and some feasibility assistance. Those are the kinds of things that we want to see states adopt. So, Colorado quickly becomes a template that can be exported elsewhere. I know Jennifer Briggs was recently on the podcast and she mentioned we haven't had as much deal supply as we'd like. And so, I think those are lessons learned that we can think about as an advocacy space and, all right, how can we rev up that pipeline? And so, as we get winds at the state level and we have lessons learned and tweaks, and every state is going to be a little bit different, probably should be a little bit different, right? The laboratory of democracy model is really important. But those are a few examples where we can, and I would add a state-level credit enhancements as well. We can't do as much as you can and at the federal level. But there are real opportunities and we're eagerly awaiting what the State Small Business Credit Initiative [SSBCI] will bring by way of state-level employee ownership opportunities
[00:09:46] Bret Keisling: I know that your approach is bipartisan in nature, and you understand that employee ownership has friends all across the board. How do we avoid - one of the things they were mindful about in Colorado is avoiding employee ownership in a particular state or jurisdiction seeming to be a Democrat or a Republican issue. And there are certain, I understand, in Colorado we had a guest Abraham French on from the co-op space some time ago and he was explaining that even the language of describing it was altered as they went to different bands of legislators. And it was, we're all talking about employee ownership, but how can it be phrased appealingly.
[00:10:25] Is that a real concern? Do we want to be careful that we're not getting one party to identify? Or do we take the support and if you're in a Democrat majority state and you want to pass stuff, that's where it is. If the Republicans in Texas want to do stuff... how do we stay neutral in a hyper charged environment?
[00:10:42] Jack Moriarty: I think there's no question that the political approach has to be tailored to the jurisdiction. And that's going to look a lot different in a place like Texas versus a place like Massachusetts. And I think that's okay. I think we need to be comfortable with some customization. I think the examples that we have of bipartisanship around this issue are so numerous at this point, even if we haven't seen as much movement as we'd like to see in Washington. You've got bills that are co-sponsored by Jerry Moran, Republican out of Kansas, and Bernie Sanders. We've seen state-level bipartisan proposals.
[00:11:16] I think we really need to be attentive to both parties and making the pitch. I think the best-case scenario at either the state or the federal level is to have bipartisan bills that are introduced with co-sponsors from each party that are, you know, have, support from advocates and both sides. I think we want to really be a movement that convenes and that unifies and brings very different groups of people together. They might disagree on everything else, but this is a real bridge.
[00:11:43] That's not to say that if something does lean in sort of one partisan direction or another in a particular state or jurisdiction, I think we should be comfortable with that to an extent because that's political reality in some respects. But at the end of the day, I am less concerned about, one party taking this and running with it. I think we want both parties competing to be the best party on employee ownership. Let's make it a race to the top!
[00:12:06] Bret Keisling: Jack. I appreciate everything that you're doing. I'm very excited to see, I almost said your results, and that's not accurate, and that's not fair because you are playing long ball. And even legislative processes, vary in each state and nationally and there's all kinds of stuff for you to maneuver. So, I'm just so excited that you're in this space.
[00:12:24] If you can tell us, you said that conversations with Mike Quarrey and Corey Rosen and Chris Mackin and a couple of others, at some point you were brought in. So, can you just talk a little bit about the founding, the setup of Ownership America specifically with what's a nice human being like you're doing in a space like this? We're really glad you're here, but you hadn't heard of this until you started hearing about it. So, tell us your story.
[00:12:47] Jack Moriarty: Sure, Bret. I grew up in a political household. I'm the son of two congressional staffers. So, I grew up with an interest in politics and policy and started my career in healthcare and spent the bulk of my early career in the healthcare space through, in part, an interest in health policy.
[00:13:02] And as I was getting ready to go to business school, I knew I was going to focus on economic policy. I wanted to go to business school to better understand how we can build a more equitable economy, a more inclusive economy. And I knew policy was going to be a big part of that. And as I was getting ready to go to business school, I was living in Chicago at the time, and I would go down to the University of Chicago. They have an Institute of Politics and they have all these great speakers. And one day, it'd be the lead negotiator for the Paris Accords and another it'd be Karl Rove.
[00:13:33] And one day it was Senator Kirsten Gillibrand, and she mentioned employee ownership. And this was several months before the Main Street Employee Ownership Act. And she didn't go into too much detail, but I left that conversation with my interest piqued. And that's what sent me down the rabbit hole.
[00:13:48] And what really struck me about the employee ownership community, as I went to places like Rutgers and the NCEO and The ESOP Association, is just the quality of the people and the interest and the excitement around this issue. I think we really do have a collaborative spirit in this community, and I think that's so important to really build a robust movement.
[00:14:07] We're all working towards so many of the same goals. We don't have to agree on everything, right? Whether that's substance or even strategy, but to have a shared objective is really important.
[00:14:17] As I got to know the space, I met Chris Mackin and he brought me into this policy process. And I really felt like we needed a policy agenda that was offensive in nature, that was about growing employee ownership. But in many respects, what we've laid out which is the, our inaugural publication, which is the culmination of that work led by Michael and others, is we're putting out what we hope to be the end state or some, in some cases, some loftier goals. And so, I think some of those policies are closer to political reality than others we have a lot of work to do.
[00:14:49] The task of Ownership America and our partners is to build the kind of movement that will make significant policy possible. And that is a key ingredient. And we've been very fortunate to bring on a number of additional advisors to really broaden the conversation. Janet Boguslaw out of Brandeis, Lenore Palladino out of UMass, and Amanda DeVito who is at Butler/Till, a great ESOP up in Rochester. And it's just struck me how many evangelists we have in this space that have either studied it, or they've invested in it, or they've been part of an employee-owned company. They know that this, if we are going to have a more equitable economy it's just going to feature more employee ownership.
[00:15:31] And our hope is that our policies are able to get us there and our movement is able to put us in the driver's seat on getting those policies done.
[00:15:39] Bret Keisling: There are millions of employee owners in the country, Jack, and we've talked about not mobilizing them, but how do we start in the context of Ownership America? How could an employee owner or a professional advisor support what you're doing?
[00:15:54] Jack Moriarty: Thanks for the question, Bret. It's so important. I'd say number one, if you're an advocate for employee ownership, reach out to us. You can contact me at firstname.lastname@example.org. And we want to hear from you because really successful movements, they aren't done by me sitting here in Massachusetts and saying what's ideal for Kansas or Illinois or wherever. It's by leaning on the people that are closest, that are part of the community already, that understand the political environment, that understand the business environment and have relationships in the community.
[00:16:24] If you want to move the needle on employee ownership and be part of the movement reach out. And what we'll do is we'll talk about what are the steps that we might be able to take at that state, right, maybe in some cases in your municipality to move the needle. We've been through some of the examples, right?
[00:16:40] One opportunity is let's get, ideally, both state parties, right, to endorse employee ownership in their platform. That's a relatively low lift opportunity to at least start to get the people that are most engaged, right? The people that are involved in writing platforms at the state level. I mean, these are hyper, hyper engaged members of the community.
[00:16:57] So, that's number one. Others is, can we hold a community event? Colorado put out this great documentary on employee ownership. There is no reason that can't be the basis to screen the 25-minute documentary, have a conversation about it, invite people, invite, press, and do some community education. That's another low lift opportunity.
[00:17:17] And then eventually, right, thinking about, okay, what are the policy opportunities that might be available in my state? Maybe that's at the county level, maybe that's at the state level. And what we want in Ownership America is to be a thought partner and be an enabler and a facilitator to support advocates on the ground that know their communities, that want to see more employee ownership, to give them the tools and the resources to be able to be successful.
[00:17:40] Bret Keisling: I love that, Jack. And as is our habit, our listeners are going to be able to find all kinds of things on our show notes on the website for this episode. We're going to include links to your website. We'll have your email there as well. We are going to include a link to the white paper et cetera. And we want to support everybody to get involved and it's even the professional advisors.
[00:18:02] Let me give you one other example, Jack, when perhaps people might reach out to you instead of me. During the last presidential election, one of the caucus states, there was a caucus member who had reached out to me and turns out that in that state, you can get questions put before the caucus. And he said, hey, if we were going to do an employee ownership question, what would it be? And it was literally like 90 minutes before the caucus began and I wrote three sentences. It was just down and dirty, but hey, if you want to do this.
[00:18:30] If you have an idea for employee ownership and I just want to highlight it, you did say this, but in your community, reach out to Ownership America. If there's a policy something that you want to see happen that fits you have the resources. That what you're really ultimately doing, Jack, and these are my words, but it seems to me is building a national network where everybody is going to have a connectivity. Where we'll see you guys doing your stuff in DC at the federal level, but meanwhile, state after state. So, if anybody at any level, I'll be honest with you and you haven't said this, if you want to run for local office and you want an issue, regardless of where you come from, reach out to Ownership America and say, hey, I'm an aspiring town council person, Republican or Democrat. Is employee ownership good? And I suspect you can educate them.
[00:19:21] So, there's all kinds of stuff. I'm just saying, if it's connected to public policy, my suggestion is reach out to Ownership America.
[00:19:27] Jack Moriarty: Absolutely. We'd love to hear from you. Thank you, Bret.
[00:19:30] Bret Keisling: Jack, let me ask this and it's not to put you on the spot, a lot of our listeners have had an A-ha Moment. You did share being at a speech and hearing employee ownership mentioned, but you're also relatively new to the space. So, I'm not trying to put you on the spot, but have you had a moment yet that we have our guest share about, of what I characterize as the EO A-ha Moment
[00:19:50] Jack Moriarty: Sure. I'll give you two A-ha Moments of mine. One is a bit wonkier and the other is I think a bit more human moment. But shortly after I heard that speech, one of the early books in the field that I picked up was a compilation of research by Joseph Blasi and Doug Kruse and Richard Freeman, and this was their Shared Capitalism at Work compilation for the National Bureau of Economic Research. And I'm sitting there typing my business school applications, reading. It was just all this rich data and how it's participatory and how it generates performance advantages. That just struck me as, wow, there's really something here. I really need to dig into this.
[00:20:28] And the second is fast forwarding my, one of my first employee ownership events was the NCEO Fall Forum in the fall of 2018. And this was out in Albuquerque and it's there where I first sat at a table and met some employee owners and just having those conversations and going from the research to the human level. And just hearing from them, their experiences and what employee ownership meant to them, that's when I knew that we have a movement here. And it's not been deployed yet, but it's waiting. It's ready to go. And we have so many stories and experiences to share, with policymakers, with the press, with each other.
[00:21:07] And there's just something so rich about the impact that employee ownership has had on human beings. And that's why we're advocates for employee ownership.
[00:21:16] Bret Keisling: You summed that up beautifully, Jack. And you fit into the category of so many people who've been kind enough to come on the podcast of doing good things for good reasons. And you do us all credit when you talk about the benefits of employee ownership, there is just so much good that is going on.
[00:21:35] My friend, I am so grateful for all of your time on this episode. Is there anything that you would have liked to have covered that I did not give you an opportunity to cover?
[00:21:44] Jack Moriarty: I think we covered it, Bret.
[00:21:46] Bret Keisling: Jack, let me say this. And I got a little microphone and everybody says, you said it at the very start, we need more people talking about employee ownership. And that is literally what I and my team do with the EO Podcast Network. I'm going to sing your praises and it's not just what you're doing, it is very important. I want to also stress, Employee Ownership Month to me, on the podcast and outside of it, collaboration has been the buzz word. And I want everybody, I just really hope everybody, looks at you as an enhancement to the community. And even if others are in the policy space, we all benefit from the policies and it's not like the Ownership America policy is going to be worse for someone else. So, if you're doing something Jack, my microphone is going to be, first of all, I will celebrate your successes and talk about them. I will encourage you as I do with others of just everything that you're doing, but also encouraging everybody just to get on board with what you're doing. Because I think it's a very important missing piece and it is how we get to be a movement.
[00:22:49] So, I thank you so much.
[00:22:50] Jack Moriarty: That's very kind, Bret. I can't thank you enough for the platform that you've created and that's, what a movement asset. I mean, as you mentioned, I've only been around employee ownership for a few years now and I can't tell you how instrumental The EsOp Podcast has been in my own development as an employee ownership advocate.
[00:23:07] Your support and your encouragement, it means a lot. And thanks for all the great work that you do.
[00:23:11] Bret Keisling: I appreciate it. That's very kind and I just pinch myself because what I have done is carved out a niche talking to some really cool people. Thank you for that.
[00:23:20] Jack, we will have you on again. Much success. Congratulations and thank you for your time today.
[00:23:25] Jack Moriarty: Thank you, Bret.
[00:23:26] Bret Keisling: With that, we're going to wrap up this episode of The EsOp Podcast. As I said, you'll find lots of information on Jack, on Ownership America, contact information, their website, their white paper, et cetera on our show notes that go along with this episode. You can find this episode at www.EsOpPodcast.com and all of our titles at www.EOPodcastNetwork.com.
[00:23:49] Thank you so much for listening. This is Bret Keisling. Be well.
[00:23:53] Bitsy McCann: We'd love to hear from you. You can find us on Facebook at EO Podcast Network and on Twitter @ESOPPodcast. This podcast has been produced by Bret Keisling for the EO Podcast Network, production assistance by Victoria Huerta, original music composed by Max Keisling, branding and marketing by BitsyPlus Design, and I'm Bitsy McCann.
Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.
A note on the transcript: This transcript was produced by Descript, an automated transcription service. While it has been reviewed by The EsOp Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.