Opinion: Employee stock plans hold the key to financial security for New Yorkers
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Aaron Shapiro is the founder and CEO of New York-based Carver Edison. Photo courtesy of Carver Edison
By Aaron Shapiro
Growing up in Kew Gardens, my mom had to make a lot of hard choices when it came to our family finances — and we weren’t unique.
Riding the subway as a kid, I didn’t know exactly what I’d do, but I knew I wanted to help the people around me--friends and strangers. After several years helping non-profits invest, I realized my mom had missed out on the opportunity to earn over $1 million from a powerful workplace benefit called an Employee Stock Purchase Plan simply because she couldn’t afford to participate.
It’s critical that we finally make inclusive access to this potentially life changing financial tool possible for New York’s workforce.
New York has the highest income gap in the country. Many of our “frontline” workers are lower paid associates who have managed to keep the city running during this global pandemic. In return, they are making an average salary of $32,310 — despite the fact that many work for the country’s largest and most successful publicly traded companies.
Yet, most have no ability to break into the market to benefit from the economic growth most of these companies realize and we hear about in the news.
Specifically in Queens, 45 percent of residents are Black or Hispanic and about half were born outside the country. With Black Americans especially hard hit by COVID-19 and the average rental price for a two bedroom apartment at $31,704 a year, many Queens residents, particularly frontline workers, are struggling to make ends meet. We need to look to other solutions, including employee stock purchase plans (ESPPs) like the one my mom had missed out on.
With tens of thousands of New Yorkers currently working for these publicly traded companies, and more than 35 million Americans combined who have access to ESPPs, we could help boost the net worth of everyday workers by at least 5 percent a year by simply getting them enrolled. Standard plans usually include a 15 percent discount and six-month look back period for participants, and our technology would help reduce payroll deductions and investment risk even further.
Because ESPPs can be easily tapped without penalty when unexpected or necessary expenses arise, New Yorkers have the ideal mix of liquidity if needed with meaningful growth potential from long term ownership.
These plans are a financial solution available today to New Yorkers that don't require action from a gridlocked Congress.
New Yorkers are some of the toughest, most resilient people anywhere. And for those of us from Queens, that’s especially true.
I don’t want other New York families to miss out on the opportunity to save for a future. It’s about ensuring more people can live with financial security as they go about their lives. If you work for a publicly traded company, please consider responsibly participating in your company’s stock plan. It could be the opportunity of a lifetime.
Aaron Shapiro is the founder and CEO of New York-based Carver Edison.
