Sen. Bernie Sanders chaired a Senate committee hearing Thursday at the Vermont Statehouse on ways employee-owned businesses could help pull the country out of the recession. Vermont is a leader in this area,” Sanders told reporters afterward. “Especially in the midst of a recession when unemployment is so high and people are really worried about outsourcing, employee ownership means that those companies are not going to be running to China.” During the 90-minute hearing of the Senate Health, Education, Labor and Pensions Committee, representatives of Vermont worker-owned businesses explained that the economic benefits include greater productivity and higher morale.

“Employee-owned companies tend to perform better, pay higher wages, and provide better retirement and other benefits than non-employee-owned firms,” said John Crystal, executive director of the Vermont Employee Ownership Center.

Steven Voigt, the CEO of Norwich-based King Arthur Flour Company, said his company stresses consistent quality, “so building better quality management systems, not just ‘taking costs out,’ fits our definition of productivity.  When this is working we have near zero turnover.”

Jeff Clark, director of operations for Chroma Technology, worked for big corporations before coming to the worker-owned maker of precision optical filters in Rockingham. “They were very efficient at manufacturing products, cutting costs and keeping an eye on the bottom line which was good for their stockholders,” Clark said. “Chroma has these same concerns, but we also consider the impact of our decisions on our employee owners and local communities.”

Bruce Seifer, Burlington’s assistant director for economic development, told the committee that the city’s long-term economic development framework focuses on local ownership and prefers employee ownership. “The focus is on fusing local business opportunity with employee development. It is a smart approach to root businesses and their workforce in your community and have them become part of your economy for generations to come.”

Sanders has introduced legislation to an Office of Employee Ownership and Participation within the U.S. Department of Labor. It would provide training, grants, and technical support for programs promoting employee ownership and participation. Another Sanders’ bill would provide loans and loan guarantees to employees to purchase a business through an employee stock ownership plan or a worker-owned cooperative. Sen. Patrick Leahy (D-Vt.) is a co-sponsor on both bills.