{"id":6643,"date":"2026-08-12T11:08:24","date_gmt":"2026-08-12T11:08:24","guid":{"rendered":"https:\/\/nextcitydigest.com\/?p=6643"},"modified":"2026-08-12T11:08:24","modified_gmt":"2026-08-12T11:08:24","slug":"opinion-california-studied-employee-ownership-sb-1174-would-put-the-evidence-to-work","status":"publish","type":"post","link":"https:\/\/nextcitydigest.com\/?p=6643","title":{"rendered":"Opinion: California studied employee ownership. SB 1174 would put the evidence to work."},"content":{"rendered":"
\n
\n

Two years ago, California commissioned a major study of worker ownership under the POWER Act. I led the research team, in partnership with the Rutgers Institute for the Study of Employee Ownership and Profit Sharing. We reviewed decades of research, conducted original statistical analyses, and examined employee-owned companies across several industries, including California road construction.<\/p>\n

Read more Opinion: No one who works full time should be on Medicaid<\/a><\/p>\n

The evidence was strong, though not uniform. Employee ownership is associated with greater job stability and, in many studies, higher productivity. One study tracking privately held ESOP companies found that they were only about half as likely as non-ESOP firms to go bankrupt or close. A large meta-analysis also found a modest but statistically significant positive relationship between employee ownership and firm performance.<\/p>\n

The gains for workers can be substantial. Employee stock ownership plans, or ESOPs \u2013 the most common form of broad-based employee ownership in the United States \u2013 build company-funded retirement wealth in addition to wages. Our California study concluded that ESOPs substantially increase employees\u2019 retirement wealth. In the California road-construction company we studied, which is 100% employee-owned, longtime employee-owners, including equipment operators and other field employees, have retired with company-funded ownership accounts worth more than a million dollars.<\/p>\n

But decades of research point to an important qualification:\u00a0ownership works best as part of a system.\u00a0The strongest gains tend to appear when a financial stake is paired with information sharing, training, and meaningful participation in workplace decisions. For example, in the road construction case study, equipment operators and other field employees also described considerable autonomy over how they did their jobs.<\/p>\n

Ownership without voice can still build wealth. Ownership combined with skills, information, and authority to improve the work can also change how a company performs.<\/p>\n

SB 1174 \u2014\u00a0authored by Republican state Sen. Suzette Valladares of Santa Clarita \u2014would give qualifying ESOP contractors a modest preference when bidding on state-funded Caltrans construction work: 2% for firms that are 30% to 49% ESOP-owned, 3% for 50% to 99% ownership, and 4% for 100% ownership. Contractors that are signatories to a qualifying collective bargaining or master labor agreement would receive an additional percentage point.<\/p>\n

My support is not a claim that employee-owned firms are always better, nor should California treat ownership structure as a substitute for price, quality, safety, or performance. The case for SB 1174 is narrower: California has credible evidence that broad-based employee ownership can improve job stability and worker wealth, along with evidence of better firm performance. A modest procurement preference is a reasonable way to encourage more of it.<\/p>\n

Read more Horoscopes August 12, 2026: Cara Delevingne, make your mission clear<\/a><\/p>\n

Critics may reasonably ask whether a procurement preference could increase the state\u2019s contracting costs. California has long accepted that modest bid preferences can advance broader public purposes, whether supporting small businesses, disabled veteran-owned businesses or disadvantaged business enterprises. SB 1174 fits within that same framework. More importantly, the relevant question is not simply bid price, but value. If employee-owned firms deliver stronger worker retention, lower business failure rates and higher productivity \u2013 as much of the research suggests \u2013 the state may realize benefits that are not captured in the initial contract price alone.<\/p>\n

\n<\/div>\n

A recent study of Sacramento County public works projects found that union contractors completed projects with lower cost overruns and faster delivery than comparable non-union firms. Whether employee ownership produces similar results is ultimately an empirical question, not an ideological one. SB 1174 creates an opportunity for California to find out.<\/p>\n

The state should also use SB 1174 as an opportunity to generate better evidence. Caltrans should track whether employee-owned contractors differ in cost overruns, delays, safety, quality, worker retention, and other measures of performance. Over time, California could also test whether firms that combine employee ownership with training, information sharing, and genuine decision-making authority deliver better results.\u00a0Public procurement should reward outcomes, not labels.<\/p>\n

California has already taken a bipartisan step in this direction. In 2022, lawmakers unanimously passed SB 1407, the California Employee Ownership Act, establishing the framework for a state Employee Ownership Hub to increase awareness and reduce barriers to employee ownership. SB 1174 builds upon that foundation by testing whether California\u2019s purchasing power can encourage business models that produce better outcomes for workers, employers and taxpayers alike.<\/p>\n

David I. Levine is the Eugene E. and Catherine M. Trefethen Professor of Business Administration at the Haas School of Business, University of California, Berkeley. He led the state\u2019s POWER Act study of worker ownership, submitted to the California Labor and Workforce Development Agency.<\/em><\/p>\n

Read more Asking Eric: This woman from church accused me of sending her to the ER<\/a><\/p>\n

\n<\/div>\n
\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

‘California has credible evidence that broad-based employee ownership can improve job stability and worker wealth, along with evidence of better firm performance.’<\/p>\n","protected":false},"author":1,"featured_media":6642,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-6643","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion"],"yoast_head":"\nOpinion: California studied employee ownership. SB 1174 would put the evidence to work. - Next City Digest<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nextcitydigest.com\/?p=6643\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Opinion: California studied employee ownership. SB 1174 would put the evidence to work. - Next City Digest\" \/>\n<meta property=\"og:description\" content=\"'California has credible evidence that broad-based employee ownership can improve job stability and worker wealth, along with evidence of better firm performance.'\" \/>\n<meta property=\"og:url\" content=\"https:\/\/nextcitydigest.com\/?p=6643\" \/>\n<meta property=\"og:site_name\" content=\"Next City Digest\" \/>\n<meta property=\"article:published_time\" content=\"2026-08-12T11:08:24+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/#\\\/schema\\\/person\\\/13065d40d633843429ac57d4e5c06f9b\"},\"headline\":\"Opinion: California studied employee ownership. SB 1174 would put the evidence to work.\",\"datePublished\":\"2026-08-12T11:08:24+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643\"},\"wordCount\":771,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/nextcitydigest.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/16539f72abd60738f121a1e088fd4dd0.webp\",\"articleSection\":[\"Opinion\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643\",\"url\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643\",\"name\":\"Opinion: California studied employee ownership. SB 1174 would put the evidence to work. - Next City Digest\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/nextcitydigest.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/16539f72abd60738f121a1e088fd4dd0.webp\",\"datePublished\":\"2026-08-12T11:08:24+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/#\\\/schema\\\/person\\\/13065d40d633843429ac57d4e5c06f9b\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#primaryimage\",\"url\":\"https:\\\/\\\/nextcitydigest.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/16539f72abd60738f121a1e088fd4dd0.webp\",\"contentUrl\":\"https:\\\/\\\/nextcitydigest.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/16539f72abd60738f121a1e088fd4dd0.webp\",\"width\":1024,\"height\":683},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/?p=6643#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/nextcitydigest.com\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Opinion: California studied employee ownership. SB 1174 would put the evidence to work.\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/#website\",\"url\":\"https:\\\/\\\/nextcitydigest.com\\\/\",\"name\":\"Next City Digest\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/nextcitydigest.com\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/nextcitydigest.com\\\/#\\\/schema\\\/person\\\/13065d40d633843429ac57d4e5c06f9b\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"http:\\\/\\\/nextcitydigest.com\"],\"url\":\"https:\\\/\\\/nextcitydigest.com\\\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Opinion: California studied employee ownership. SB 1174 would put the evidence to work. - Next City Digest","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/nextcitydigest.com\/?p=6643","og_locale":"en_US","og_type":"article","og_title":"Opinion: California studied employee ownership. SB 1174 would put the evidence to work. - Next City Digest","og_description":"'California has credible evidence that broad-based employee ownership can improve job stability and worker wealth, along with evidence of better firm performance.'","og_url":"https:\/\/nextcitydigest.com\/?p=6643","og_site_name":"Next City Digest","article_published_time":"2026-08-12T11:08:24+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/nextcitydigest.com\/?p=6643#article","isPartOf":{"@id":"https:\/\/nextcitydigest.com\/?p=6643"},"author":{"name":"admin","@id":"https:\/\/nextcitydigest.com\/#\/schema\/person\/13065d40d633843429ac57d4e5c06f9b"},"headline":"Opinion: California studied employee ownership. SB 1174 would put the evidence to work.","datePublished":"2026-08-12T11:08:24+00:00","mainEntityOfPage":{"@id":"https:\/\/nextcitydigest.com\/?p=6643"},"wordCount":771,"commentCount":0,"image":{"@id":"https:\/\/nextcitydigest.com\/?p=6643#primaryimage"},"thumbnailUrl":"https:\/\/nextcitydigest.com\/wp-content\/uploads\/2026\/08\/16539f72abd60738f121a1e088fd4dd0.webp","articleSection":["Opinion"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/nextcitydigest.com\/?p=6643#respond"]}]},{"@type":"WebPage","@id":"https:\/\/nextcitydigest.com\/?p=6643","url":"https:\/\/nextcitydigest.com\/?p=6643","name":"Opinion: California studied employee ownership. SB 1174 would put the evidence to work. - Next City Digest","isPartOf":{"@id":"https:\/\/nextcitydigest.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/nextcitydigest.com\/?p=6643#primaryimage"},"image":{"@id":"https:\/\/nextcitydigest.com\/?p=6643#primaryimage"},"thumbnailUrl":"https:\/\/nextcitydigest.com\/wp-content\/uploads\/2026\/08\/16539f72abd60738f121a1e088fd4dd0.webp","datePublished":"2026-08-12T11:08:24+00:00","author":{"@id":"https:\/\/nextcitydigest.com\/#\/schema\/person\/13065d40d633843429ac57d4e5c06f9b"},"breadcrumb":{"@id":"https:\/\/nextcitydigest.com\/?p=6643#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/nextcitydigest.com\/?p=6643"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/nextcitydigest.com\/?p=6643#primaryimage","url":"https:\/\/nextcitydigest.com\/wp-content\/uploads\/2026\/08\/16539f72abd60738f121a1e088fd4dd0.webp","contentUrl":"https:\/\/nextcitydigest.com\/wp-content\/uploads\/2026\/08\/16539f72abd60738f121a1e088fd4dd0.webp","width":1024,"height":683},{"@type":"BreadcrumbList","@id":"https:\/\/nextcitydigest.com\/?p=6643#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/nextcitydigest.com\/"},{"@type":"ListItem","position":2,"name":"Opinion: California studied employee ownership. SB 1174 would put the evidence to work."}]},{"@type":"WebSite","@id":"https:\/\/nextcitydigest.com\/#website","url":"https:\/\/nextcitydigest.com\/","name":"Next City Digest","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/nextcitydigest.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/nextcitydigest.com\/#\/schema\/person\/13065d40d633843429ac57d4e5c06f9b","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","caption":"admin"},"sameAs":["http:\/\/nextcitydigest.com"],"url":"https:\/\/nextcitydigest.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=\/wp\/v2\/posts\/6643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6643"}],"version-history":[{"count":0,"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=\/wp\/v2\/posts\/6643\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=\/wp\/v2\/media\/6642"}],"wp:attachment":[{"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nextcitydigest.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}