To answer your original query, we can add other incentives to the system if larger firm size (by employee number) is beneficial in certain industries. Perhaps, the most straightforward way would be to not have a cliff for the minimum size where the 50% bound kicks in, but some linear function of number of workers. Since, larger firms often have a competitive advantage, this would increase the equilibrium size.

> Why does worker ownership not matter in small companies?

1. Small business owners also exploit their workers but this is partially solved by (a) competition between small firms, and (b) labor laws.

2. The reason labor laws are often ineffective is that the capitalist class, who owns large businesses, pays off federal/provincial politicians to change laws so their exploitation is legal, or to weaken enforcing agencies. Fixing the ownership of large firms will reduce worker exploitation in both small and large firms.

3. Stock-market listed companies are especially bad at worker (and customer) rights because they have to continuously grow. By ensuring that such companies are majority-owned by workers, the bad effects of the stock-market will be reduced (though not eliminated). Small companies are rarely listed.

4. Companies usually start small. Always starting as a co-op would make many businesses non-viable. And I don't see how society will be improved by family-owned restaurants or mom-and-pop shops operated as co-ops. So let the small companies continue to be owned by their founders.

Moreover, the capitalist class also lobbies for other legal/executive changes that transfer wealth from the worker class to the the capitalist class. That is a larger political problem that is solved by reducing the power of the capitalist class with these worker-ownership measures.