[Congressional Record Volume 153, Number 126 (Thursday, August 2, 2007)]
[Senate]
[Pages S10821-S10822]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      BY Mr. SANDERS (for himself and Mr. Leahy):
  S. 1982. A bill to provide for the establishment of the United States 
Employee Ownership Bank, and for other purposes; to the Committee on 
Banking, Housing, and Urban Affairs.
  Mr. SANDERS. Mr. President, I am introducing today with Senator Leahy 
the U.S. Employee Ownership Bank Act.
  At a time when the U.S. has lost over 3 million manufacturing jobs; 
at a time when we are on the cusp of losing millions of high-paying 
information technology jobs, this legislation would begin to reverse 
that trend by providing employees with the resources they need to 
purchase their own businesses through Employee Stock Ownership Plans 
and Eligible Worker Owned Cooperatives.
  Specifically, this legislation would authorize $100 million to create 
a U.S. Employee Ownership Bank within the Department of Treasury to 
provide loans, loan guarantees, technical assistance, and grants to 
expand employee ownership throughout the country.
  Why is it so important for the Senate to provide incentives to expand 
employee ownership in this country? The answer is simple: employee 
ownership is one of the keys to creating a sustainable economy with 
jobs that pay a living wage.
  This legislation has the strong support of the ESOP Association, a 
nonprofit organization representing approximately 2,500 Employee Stock 
Ownership Plans throughout the country. Let me quote from a letter they 
recently sent to my office:

       Your legislation is a modest first step in awakening our 
     Government to the fact that in the 21st Century the inclusion 
     of employees as owners of the companies where they work in a 
     meaningful manner should be a key component of any national 
     competitiveness program. If the Senate adopts your 
     legislation, and it eventually becomes law, we assure you 
     that the ESOP community will work constructively to ensure 
     that the loan and grant program you propose works effectively 
     to benefit the employee owners, the employee owned companies, 
     and our American economy.
  Every day we read in the papers about plants that are being moved to 
China, Mexico, and a number of other low wage countries. Since a number 
of these factories were making profits, shutting them down was 
unnecessary and could have been avoided by selling these factories to 
their employees through ESOPs or worker-owned cooperatives.
  Since 2000, the U.S. manufacturing sector has lost 3.2 million 
decent-paying jobs. Put another way, since George W. Bush has been 
elected President, this country has seen one out of every six factory 
jobs disappear.
  In addition, the Associated Press recently reported about a study by 
Moody's which found that ``16 percent of the nation's 379 metropolitan 
areas are in recession, reflecting primarily the troubles in 
manufacturing.''
  In other words, about 16 percent of the biggest cities in this 
country are experiencing a recession, largely due to the loss of 
decent-paying manufacturing jobs. I suspect that this problem is even 
worse in rural areas. In my small State of Vermont, we have lost about 
20 percent of our manufacturing jobs over the past 6 years representing 
over 10,000 jobs.
  Let me just give you an example of some of the jobs that have been 
lost. From 2001-2006 the United States of America experienced the loss 
of 42 percent of our communication equipment jobs; 37 percent of our 
semiconductor and electronic component manufacturing jobs; 43 percent 
of our textile jobs; and about half of our apparel jobs.
  Not only are we losing decent-paying manufacturing jobs, we are also 
losing high-paying information technology jobs as well.
  While the loss of manufacturing jobs has been well-documented, it may 
come as a surprise to some that from January of 2001 to January of 
2006, the information sector of the U.S. economy lost over 640,000 jobs 
or more than 17 percent of its workforce.
  Unfortunately, the worst may be yet to come. Alan Blinder, an 
economist at Princeton and the former Vice Chairman of the Federal 
Reserve has recently concluded that between 30 and 40 million jobs in 
the United States are vulnerable to overseas outsourcing over the next 
10 to 20 years.
  Would expanding employee ownership be a cure-all for what ails the 
manufacturing and information technology sectors? Of course it 
wouldn't. But I strongly believe that employee ownership can and should 
be one of the central strategies in combating the outsourcing of 
American jobs. Simply put, workers who are also owners will not move 
their own jobs to China.
  Today, there are some 11,000 Employee Stock Ownership Plans, hundreds 
of worker owned cooperatives, and thousands of other companies with 
some form of employee ownership, and most of them are thriving.
  In fact, employee ownership has been proven to increase employment, 
increase productivity, increase sales, and increase wages in the United 
States. According to a Rutgers University study, broad based employee 
ownership boosts company productivity by 4 percent shareholder return 
by 2 percent and profits by 14 percent. Similar studies have shown that 
ESOP companies paid their hourly workers between 5 to 12 percent better 
than non-ESOP companies.
  Yet, despite the important role that worker ownership can play in 
revitalizing our economy, the Federal Government has failed to commit 
the resources needed to allow employee ownership to realize its true 
potential, and that is why this legislation is so important.
  When I was the Ranking Member of the Financial Institutions and 
Consumer Credit Subcommittee in the House of Representatives, I was 
able to hold a hearing on this issue nearly 4 years ago.
  During the hearing, a number of witnesses told the Subcommittee that 
if Federal loans, loan guarantees, technical assistance and grants were 
made available for the expansion of employee ownership, factories that 
are now closed and abandoned would be open for business today.
  For example, the Subcommittee heard from Larry Owenby who worked at 
the RFS Ecusta mill in North Carolina for 30 years until one day, the 
company decided to shut down.
  Other witnesses talked about factories that were closed in 
Mississippi, Alabama and Ohio. All of the witnesses testified in 
support of Federal loans, loan guarantees and technical assistance for 
the expansion of employee ownership. In fact, if this assistance had 
been around before the plants had closed, many of them would still be 
employed today as employee owners.
  The final point that I want to make is that the Federal Government, 
through the U.S. Export-Import Bank, is already providing billions of 
dollars in loans, loan guarantees and other assistance to large, multi-
national companies, such as Boeing, General Electric, and Halliburton. 
Many of these companies happen to be some of the largest job cutters in 
America, as they have moved hundreds of thousands of jobs to China, 
India, and Mexico.
  In my opinion, instead of providing corporate welfare to large 
corporations that are throwing American workers out on the street as 
they move overseas, we should be providing employees with the tools 
they need to create and retain jobs right here in the United States 
through the expansion of employee ownership.
  I urge my colleagues to support this important piece of legislation.

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