What are ESOPs? ESOPs--Employee Stock Ownership Plans--are a form of veiled ownership by management where nominal ownership is by the workers. A study by Business Week2 showed that in early 1985 there were already 7,000 companies which had enrolled nearly 10 million workers into ESOPs. In the 1970s, there were fewer than half a million workers in ESOPs. There is no breakdown available on the percentage of union as against non-union workers. Most are in unorganized plants, but a considerable number are covered by union contracts.
ESOPs pose a problem of considerable importance to the trade union movement. Not only are they one of the crudest forms of class collaboration, but they also have a tendency to eventually swallow up the trade unions and deprive them of their independence.
The idea of employee stock ownership is not a new one. It began to flourish in the late 1920s and was fueled by the wild stock market speculation of that period. The idea at that time was for large corporations to put on promotion schemes for workers to buy company stock. However, what was considered a strong current for workers to become part "owners" of management came to an abrupt end with the great stock market crash of October 1929. The embryo ESOP movement collapsed, as did thousands of corporations, in the wake of the great capitalist crisis. It didn't get revived until the early 1970s.