The National Center for Employee Ownership (NCEO) published the results from the first phase of an ongoing research project that compares the economic well-being of employee-owners early in their careers with that of other young workers.  This survey used the National Longitudinal Survey of Youth (NLSY97) data to compare median wages from income, median years at their job, median household net worth at age 30,  and income to poverty level in both 1997 and 2013.

The results of the NCEO research are available here, and were funded by the W.K. Kellogg foundation.  Dr. Van Doel of INCEO spoke with Dr. Wiefek, the author of the research report to understand how the study results might be related specifically to Indiana.  Dr. Wiefek shared that there is regional data available but the sample size is much smaller than the full study and that Indiana is one of 12 states included in the North Central region.  As part of our discussion Dr. Wiefek provided additional data for both groups based on analysis of the most current data available (2015 data).  Given these two constraints (small sample size and the grouping of Indiana in the North Central respondents) the generalizability North Central data to the full study data as shown in Table 1 may be informative but may not be statistically valid.

Table 1: Comparison of the North Central Region Data Subset to the Full Study Population.

Note: Study data provided by personnel communication by Wiefek, for 2015 data the respondents age are 30-36.  For the full report with the 2013 data see research report.

Table 1 identifies that the categories of interest, when compared between all respondents and North Central respondents, are fairly consistent with the employee owner respondents outperforming the non employee owner respondents.

As described in the research report (p.16):

The Census Bureau expresses depth of poverty in an income-to-poverty ratio, which measures how close a family’s or individual’s income is to their poverty threshold. The ratio compares household income to the federal poverty level, accounting for household size.

What is interesting to note is the changes in the median income to poverty ratio (a larger ratio infers that the population is further from the poverty line). As illustrated in Table 1, the median income to poverty level increased among employee owners in both the full study and the NC Region. As described in the research report (p.4) ” Most of this difference emerged over a period of years—the two groups had nearly the same median income-to-poverty ratios in 1997″. Thus employee ownership makes a noticeable positive difference in both long-term wealth generation through accumulation of retirement benefits, but also improves their quality of life by increasing wage income above the poverty level.

For further information on the impact of employee ownership & economic well-being please contact Dr. Wiefek.