Abstract
The aging workforce and population decline give opportunity to increase the share of labor managed firms in the U.S., such as employee stock ownership plans. Yet why are labor managed firms not a natural and organic solution to the above workforce and population challenges, instead becoming a contemporary political talking point for the likes of Senator Bernie Sanders? At a minimum, labor managed firms are economically equal and socially preferable to conventional firms. Yet labor managed firms exist in far fewer numbers than conventional firms. Why is this? Earlier arguments that labor managed firms were less efficient, less productive, and less survivable have been convincingly countered. So, deduction suggests they are simply created far less frequently than conventional firms. This author finds three primary hypotheses for why this imbalance exists. First, that there is broad lack of awareness of labor managed firm options and benefits. Second, that entrepreneur self-interest shows preference for conventional firms over labor managed firms. And third, that co-determination complicates labor managed firm creation, in turn promoting conventional firm creation. This piece follows a logical form to engage a subset of relevant literature in investigation of the dearth of labor managed firms.