***Watch the press conference beginning at 10 AM HERE***
WASHINGTON, DC — U.S. Senator Sherrod Brown (D-OH) will unveil new legislation to curb stock buybacks and create a ‘worker dividend’ to ensure workers get their fair share of the profits they help create. Brown will unveil his bill, the Stock Buyback Reform and Worker Dividend Act, at 10 AM today at the National Press Club. (Watch HERE; Download Brown’s remarks HERE)
“Wall Street is obsessed with shareholder equity, but workers have equity in a company, too – it’s called sweat equity, and it’s time workers are rewarded for it,” said Brown. “Corporate greed is fundamental to the Wall Street business model – we know that. Workers aren’t going to get their fair share until we change it – we know that too. My proposal is simple: if corporations want to transfer wealth to Wall Street, workers have to get a proportionate share of the pie.”
Brown’s Stock Buyback Reform and Worker Dividend Act would do two things:
Brown unveiled a calculator on his website HERE, where workers can type in the dollar figure for their employers’ stock buybacks and dividends and find out what their worker dividend would be under Brown’s bill.
Large corporations buy back stock using capital they should be investing in their workers in order to keep more and more of their profits for their CEOs and Wall Street investors. This practice has further exploded under President Trump’s tax law that overwhelmingly benefited major corporations and the top 1 percent. In 2018, the largest U.S. companies spent a record $806 billion on stock buybacks.
After the 2017 Republican tax bill that went overwhelmingly to corporations and the top 1 percent, stock buyback activity among companies in the U.S. increased significantly. In 2018, the largest U.S. companies spent a record $806 billion on stock buybacks, which was 55 percent more than they spent in 2017 and 36 percent more than they spent in 2007, which was the previous record year. To put that in perspective, the median household in the U.S. has a net worth of $97,300.
Stock buybacks benefit large shareholders and corporate executives, whose pay packages include significant stock compensation. Compared to the typical worker, CEO compensation has increased significantly. In 1989, the ratio of CEO-to-worker compensation was 58 to 1, but, in 2017, that ratio was 312 to 1. Over roughly the same period of time, the wealth gap in the U.S. has widened considerably. Between 1989 and 2016, the share of wealth held by the top 1 percent increased from just below 30 percent to nearly 39 percent. At the same time, the share of wealth held by the bottom 90 percent dropped from slightly more than 33 percent to less than 23 percent.
Brown’s Stock Buyback Reform and Worker Dividend Act would:
How is this proposal different from other stock buyback proposals?
While other proposals focus solely on preventing stock buybacks, Brown’s proposal is unique in its focus on workers. It is the only proposal that puts workers on equal footing with shareholders and actually puts money in workers’ pockets.
Wall Street vs Workers:
Brown has long fought to ensure workers are brought back into the equation. Last month, Brown took to the Senate floor to unveil the newest essay in his online series titled, “Wall Street’s War on Workers”. The third essay in this series focused on stock buybacks and the ways in which large corporations use this tactic to withhold profits from workers and, instead, keep more and more of those profits for their CEOs and Wall Street investors.
Brown has released several essays on Medium to explore how Wall Street undermines U.S. workers as he offers solutions to grow the middle class and restore the value of work.