The solution to automation fears: Employee ownership

In a world increasingly captivated by the promise (or threat) of automation via artificial intelligence, it’s easy to see why the striking longshoremen were demanding more than just a wage increase. Like all workers, they want job security, a voice in their workplace and assurance that the future won't pass them by.

It is simple but foolhardy to require explicitly that employers eschew automation. It is doubtful that any industrial sector will be completely untouched by the advancement of automation and AI, and organizations that think they are the special exception will find themselves on the wrong end of the “creative destruction” process once described by Austrian economist Joseph Schumpeter.

Luckily, there is a simple, effective way of embracing automation while promoting the interests and dignity of labor. Offering employees ownership in the organizations they work for could be the key to addressing workers’ concerns, particularly when the specter of automation looms large.

Automation tends to spark fear because it threatens livelihoods. It’s a faceless process that makes workers feel disposable, as if they are no more valuable than the machines poised to replace them. Offering striking workers an ownership stake changes the equation entirely. Equity transforms the perception of automation from a force to be resisted into a tool that can benefit everyone. Workers become partners, not mere employees. When technology improves productivity, they stand to gain from the success, rather than worry about obsolescence.

Employee ownership brings significant benefits. When workers hold equity in the company, they are directly invested in its success. This ownership aligns their interests with those of the company, fostering a sense of purpose and shared mission. Workers who are also owners are more likely to be engaged, motivated and committed to the company’s long-term success. They have a real voice in shaping the future, and their contributions are valued beyond just their labor — they are seen as integral to the company’s growth.

Strikes like those we’ve seen recently often reflect a deep disconnect between labor and management. By offering equity, companies invite workers to be part of the growth story, to share the rewards of increased efficiency and productivity. Instead of automation being synonymous with layoffs, it becomes a pathway to shared prosperity. When workers are owners, they have a direct incentive to innovate and ensure the company thrives, embracing change rather than fearing it.

The idea isn’t new — some of the most successful companies already offer employees stock options, and employee-owned firms consistently show high levels of worker satisfaction. Employee ownership creates a culture of collaboration, where everyone has a stake in the outcome. Extending this model to unionized workers, especially in industries at risk of being upended by automation, could build a more resilient workforce. It gives workers the peace of mind that, while jobs may change, their stake in the company’s success will not. Equity can turn the narrative from one of confrontation to one of collaboration.

Union leaders might be skeptical of this approach, as it could undermine their power over workers and organizations. Employee ownership blurs the line between labor and management, potentially weakening the influence of unions by reducing the need for collective bargaining. If workers become part-owners, they may be less inclined to support union actions that could negatively impact the company’s bottom line, thereby eroding the solidarity that unions rely on.

These sound like significant problems until you realize the mission of unions, ostensibly, is to re-distribute power from organizations to workers. The latent mission of unions, or what actually motivates union leadership, is far less rosy, as union leaders strive to remain relevant, powerful actors.

But if the mission of unions is to empower workers, turning employees into employee-owners accomplishes that task while allowing organizations to embrace technological advancements. Workers don’t inherently fear automation — workers fear being cut out entirely. Giving equity to employees ensures that they are always involved in production, regardless of how the nature of work changes.

The future of work doesn’t have to be a zero-sum game. Automation and workers can coexist — and even thrive together — if companies are willing to rethink how they value labor. Offering equity to striking workers isn’t just about resolving disputes; it’s about reimagining the relationship between labor, technology and capital for a fairer and more inclusive economy.

Colin Birkhead is an Assistant Professor of Management at the Atkinson Graduate School of Management at Willamette University. He received his Ph.D. in Sociology from Duke University and researches employee-owned companies.