What If Amazon Shared Ownership the Way Sears Did?

For those of a certain age (like me), Sears was the Amazon of its day. You could get almost anything but food in a Sears catalogue, and its stores were ubiquitous. My first house in the San Francisco Bay area was built in 1906 with plans from Sears. Early in his life my dad sold shoes for Sears. Back then, Sears put in 10% of pay into a profit-sharing plan that owned Sears stock. Contributions were based on years of service. If a salesman worked for Sears for decades, they could walk away with what would be worth over $1 million today. My dad didn’t stay long, but he sometimes mused about what might have happened. Sears ended the plan in the 1970’s, although it briefly had an ESOP in the 1980s as it was trying to find its way back in a changing retail landscape.

In his new book, The Alternative: How to Build a Just Economy, New Yorker writer Nick Romeo looks at practical ideas for creating a more socially equitable economy. Employee ownership is high on his list. He writes that “If Amazon’s employees in 2018 had owned as much of their employer’s stock as Sears department store employees did in the 1950s, each Amazon worker would have owned shares worth $381,000.12. There were over half a million Amazon employees in 2018. By 2022, there were 1.1 million, and the stock price had more than doubled.” Instead, one Amazon employee, Jeff Bezos, has a net worth of $181 billion, mostly from Amazon stock.

Romeo notes the nation's founders worried this kind of inequality of wealth (then mostly land) boded ill for democracy and capitalism. Madison wrote that “The proportion being without property, or the hope of acquiring it, cannot be expected to sympathize sufficiently with its rights to be safe depositories of power over them.” As John Case and I argue in our book Ownership: Reinventing Companies, Capitalism, and Who Owns What, democracy is more under threat then ever, in significant part because wealth insecurity is now so pervasive among most Americans while a tiny fraction have wealth equal to the GNP of many countries. Employee ownership remains one of the few options that is both politically feasible and economically effective in addressing this problem.